Little surprise to hear that Vodafone UK will shortly follow EE in moving away from an inflation-linked mechanism for annual price rises to a “pounds and pence” approach. This intercepts the expected ban on the controversial practice after Ofcom opened a consultation on it in late 2023 in a bid for greater transparency for customers. Like EE, Vodafone's broadband plans will increase by £3 per month. Vodafone's mobile plans will increase by £1 per month on its Basics tariffs and £1.80 on other tariffs. This compares to a flat £1.50 across all tariffs for EE. There will be no increase for the financially vulnerable or those on social tariffs. For Vodafone, of course, there’s added sensitivity around the CMA’s investigation into its planned merger with Three. Pricing is one of the main areas of the watchdog’s investigation. All eyes will now be on Virgin Media O2 and Three, which will surely follow suit very soon.
Tom Byrd
3w
Inflation plus worked well when it was 2% or lower. It's good to see a more common sense approach.
Banks do not alter the interest rates on fixed mortgages or 5-year bonds once they are issued, so telcos should adopt a similar practice. This would prevent unnecessary complications and frustrations for consumers. Their current approach reflects a lack of innovation and adaptability!
Tech industry analyst, CCS Insight
3wThere's also an impact of lower inflation here now compared with the massive inflation spike during 2021-2023. With low inflation a % rise could work out cheaper for users on lower price plans than a %-based adjustment.