Virgin Media and O2 customers are facing a ‘lose-lose choice’ between high mid-contract price rises or crippling exit fees that could run into hundreds of pounds warns consumer group Which?

The firms, which merged in 2021, are set to introduce price rises of 8.8% in April and come just 12 months after O2 imposed 17% price increases on customers while those with Virgin Media saw 13.8% average hikes.

The price rises, says consumer group Which?, are the highest in percentage terms out of any of the major broadband and mobile phone companies.

But for those customers who cannot afford - or don't wish to pay - their new fees come April the cost to leave their contract could be ‘exorbitant’ calculates Which?

Many broadband suppliers including BT, EE, Vodafone and Sky have all confirmed plans to increase prices in the spring with changes of between 6.7% and 7.9%.

But it is Virgin Media customers that face the largest hike – both as a percentage and in money terms.

Virgin Media O2 has defended the increases saying the firm is ‘investing heavily’ to provide fast and reliable connections for customers.

Charges after April?

Analysis by Which? has found the changes may mean an increase of just over £39 for the average annual broadband bill of the average Virgin Media customer, which currently stands at around £37.06 a month.

And if that customer wanted to avoid the increase, adds the research, they could face an exit fee of £403.91 if they were to leave their contract 12 months early.

Meanwhile the average O2 Sim-only mobile customer faces a £26.44 price increase a year – higher in pence and pounds than proposed increases by both EE and Three but slightly less than Vodafone which has higher prices overall on average.

Which? calculates that average Sim-only O2 customer now pays around £25.04 a month but if they didn’t want to pay the April increase and wanted to switch providers they may be asked for a £288.46 exit fee if leaving their contract 12 months early.

Amid the ongoing cost of living crisis Which? wants all providers, including Virgin Media and O2, to scrap this year's hikes and is calling on Ofcom to quickly press ahead with a move to ban inflation-linked price rises.

Rocio Concha, Which? Director of Policy and Advocacy, said: “Virgin Media and O2 customers face a lose-lose choice between huge price hikes and crippling exit fees. This comes on top of up to 17 per cent increases faced by some O2 customers last year - few would have anticipated such steep price rises when they signed up.

“Ofcom has clearly stated that the practice of inflation-linked mid contract price rise terms can cause substantial consumer harm. Telecoms firms must do the right thing and immediately scrap these rises, rather than cynically taking the opportunity to cash in one last time at the expense of their customers before new rules take effect.”

A spokesman for Virgin Media O2 said the money from price increases is ‘outweighed’ by company investment.

In a statement it said: “2023 was a record year for traffic on our networks as customers used our mobile and broadband services more than ever. We are investing heavily to ensure we continue to provide the fast and reliable connectivity our customers rely on, and the amount we receive from price increases is greatly outweighed by the £5m we invest every single day to upgrade our networks and services to give customers a better overall experience.

“Which?’s own analysis shows that we continue to offer excellent value, with cable customers paying an average of just 10p more per day, and mobile customers facing an effective average increase of just 5p a day, for services they’re using almost constantly. This is further backed up by recent independent analysis which found that the cost of telecoms services has fallen by a fifth since 2017, while at the same time speeds and usage have increased significantly.”