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Vodafone On Ofcom's Plans to Stop Mid-contract Price Hikes

By - Source: via TechCrunch | B 4 comments

Vodafone says proposal could hurt the consumer.

Vodafone has responded to UK telecoms watchdog Ofcom's plans to stop mid-contract price hikes. The carrier said Ofcom's proposal actually risks increasing the cost of getting a mobile phone contract for millions. Vodafone said that Ofcom needs to understand the difference between the prices set by mobile companies and the prices the phone companies have no control over.

"We simply do not control many of the charges faced by consumers," Vodafone said in a statement. "They are set by third parties and mobile phone companies have to pass those costs on or they will be subsidising other companies. Prices set by third parties such as BT, include those for directory enquiry services, premium rate and 08 numbers," the carrier continued.

Vodafone goes on to say that it cannot be held accountable should one of its suppliers raise their prices and argues that it should not have to swallow the price increase. The network says customers could end up paying different prices for different services depending on which third party has recently increased its prices. Additionally, Vodafone claims the up-front cost of using a mobile phone may actually increase as operators try to guess upcoming price increases.

As it stands, customers wishing to break free from their contract are subject to hefty cancellation fees if they're cancelling their agreement before it expires. Ofcom is hoping to protect consumers from price rises that occur during fixed contracts for landline, broadband and mobile services by allowing consumers to leave their contract with no penalty if their provider introduces any price increase during their contract. In addition, Ofcom would require providers to be clear about potential price increases and the consumer's right to cancel should a price increase be introduced during their contract.

Consultation on the proposal will run through until March, and Ofcom will announce a decision on the issue in June.

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  • 1 Hide
    Anonymous , January 7, 2013 6:58 AM
    Sim only contracts run monthly here in UK, so no big deal, but Pay Monthly plans generally taken out with subsidised handset. How will they deal with that, you cant expect the carrier to take a hit on a phone that has not been paid off yet.

    I just do not see a scenario this will work for both sides, or if there is really a need, In all my 13 years of mobile contracts, I have had 1 price rise mid-contract, for Pennies!

  • 0 Hide
    thecolorblue , January 7, 2013 9:06 AM
    Vodafone is full of Sh!t

    business is cutthroat... let this be a lesson to Vodafone to negotiate better contracts with their suppliers.
  • 0 Hide
    thecolorblue , January 7, 2013 9:09 AM
    also, if vodafone is allowed to screwcustomers like this then the prescedent would be set and CONTRACTS WOULD THEREAFTER EXIST ONLY FOR THE BENEFIT OF COMPANIES

  • Display all 4 comments.
  • 2 Hide
    ddpruitt , January 7, 2013 4:38 PM
    Quote:
    "We simply do not control many of the charges faced by consumers," Vodafone said in a statement. "They are set by third parties and mobile phone companies have to pass those costs on or they will be subsidising other companies. Prices set by third parties such as BT, include those for directory enquiry services, premium rate and 08 numbers," the carrier continued.


    As the Brits would say, Bullocks! They're complaining about third party services that are under contract themselves and usually set for years, and any changes are discussed a year or two in advance. These things are essentially flat rate. The only thing they'll have to "swallow" is a slight decrease in profits from customers they're no longer able to screw over.