O2’s decision to hike prices for millions of customers by more than promised has sparked national outrage, and a government-requested review of the UK’s telecoms rules.
The mobile giant confirmed that, from April 2026, customers’ monthly bills will rise by £2.50, not the £1.80 it originally set out. That’s 40% higher than many people were led to expect when they signed their contracts.
Consumer champion Martin Lewis branded the move a “mockery” of Ofcom’s rules. And now, after his public campaign and a letter to the Chancellor, the Government has written to Ofcom demanding urgent action.
How the backlash began
When O2 first announced the increase, Ofcom said it was “disappointed”, adding the rise went against “the spirit of our rules” on transparency.
Those rules, introduced in January 2025, were designed to protect consumers from surprise mid-contract increases. They require providers to spell out any future rises in pounds and pence, before customers sign up — a change that was supposed to end inflation-linked ambiguity for good.
But O2’s rise doesn’t link to inflation at all. It’s a flat fee, which means it may technically stay within the letter of the law, even if some feel that it bends its intent.
Martin Lewis takes it to Westminster
In his open letter, Martin Lewis said the move could add hundreds of pounds to household bills and even fuel inflation if copied across broadband and pay-TV contracts.
He urged the Government to ban above-inflation mid-contract rises entirely and proposed three quick fixes:
- Scrap the current model and outlaw any mid-contract hikes above inflation.
- Give customers two penalty-free exit windows — one after notification and another after the rise takes effect.
- Force providers to apply to Ofcom for permission before raising prices beyond agreed terms, except in genuine emergencies.
The story quickly escalated. And now, the technology secretary, Liz Kendall has written to Ofcom asking for a “rapid review”.
Government steps in
The Technology Secretary has demanded a full regulatory rethink. Liz Kendall said O2’s move was “disappointing given the current pressures on consumers” and confirmed she had instructed Ofcom to “go further, faster”.
She has asked the regulator — which has until later this week to respond — to:
- Conduct a rapid review of how easy it really is for customers to switch penalty-free when prices go up.
- Require clear pounds-and-pence notifications even for older contracts signed before January 2025.
- Re-evaluate whether the new transparency rules are working.
- Consider whether customers should get the same renewal deals as new joiners.
- Explore clearer billing standards, similar to those recently adopted in the energy sector.
What O2 says
O2 maintains that it has been transparent. In a statement, it said the price increase — which adds around 8p per day — is outweighed by its £700 million annual investment in the network.
It insists customers can leave within 30 days of being notified without penalty, though those on handset plans must continue repaying the device cost in full.
Not everyone agrees. Citizens Advice said Ofcom’s current rules “haven’t gone far enough”, while Broadband Genie called the situation “a direct result of crude regulation” and urged an outright ban on all mid-contract hikes.
What to do if you’re affected
- Check your email or text. Your 30-day window to cancel penalty-free starts from the day you’re notified.
- Compare and switch. Many providers now offer fixed-price deals — and switching is easier than ever through Ofcom’s new One Touch Switch system.
- Don’t ignore handset repayments. Leaving your airtime plan doesn’t cancel the device loan.
- Complain if unclear. Ofcom has reminded providers they must treat customers fairly. You can raise a complaint directly through its website.
O2’s move may have exposed a serious flaw in Ofcom’s new system. While customers technically have the right to walk away, few will, and the price of inaction could be paid by millions.
With ministers now stepping in, the regulator has days to decide whether to toughen the rules or risk losing public trust altogether.
