Early Christmas present for Orange users - A price increase

UK Mobile phone operator Orange today announced a hike in prices for both new customers and current contract holders who signed up to the network before mid-September this year. The increase will take place from 8 January 2012.

Orange Pay Monthly customers who signed onto a monthly price plan available before mid-September will see their monthly service charge increase by 4.34%, the increase will affect home users on all contracts and business users who have the personal animal talk plans. The company blames a 20-year high inflation rate as the reason behind the changes, though this is something they have known for sometime.

Luckily, those who have recently taken advantage of Nokia Lumia 800 devices on the network won’t be affected thanks to the Windows Phone device only being released in the past month.

It is very rare for a company to increase prices early/mid-contract although Vodafone in the UK did increase prices by less than 1% last month. Despite this, many Orange customers are unhappy, though Orange themselves have stated that:

“Our Pay Monthly terms and conditions allow us to increase charges by up to the RPI figure in any 12 month period. The increase in the price plan charges is less than the 5.4% rate of inflation as measured by the Retail Price Index (RPI) in October 2011.

We can increase prices at any time on giving proper notice. In this case, the increase is less than the current rate of inflation and our terms and conditions state that we can do this without giving you the right to cancel your contract without paying the disconnection fee.”

The wording of their FAQ has been seen as pretty harshly written by their contract customers, with very little apology and more of the companies PR banters that they are “always offering customers great value”

It remains to be seen if any other mobile operators will follow suite, but hopefully they will see the light and only increase prices for new/upgrade contracts rather than current ones.

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Not happy about this - The most annoying thing was that I received the news in an SMS message which then directed me to the FAQ - As mentioned in the news above, I thought their answers to potential questions treated the customer as if they should be pleased they were allowed cheap bills for so long. I will not be staying with Orange - I have one contract ending in 4 months and another ending in 9.

Even if it did happen to me, I wouldn't really care. 4.34% of £26 is something like £1.12. Even those paying £70 will only have to pay £3 extra - chances are if you can afford to have £70 contract, an extra £3 isn't really going to matter.

If it was something like an extra £10 onto my contract I'd be massively screwing, however, £1? I pay more for that on fizzy drinks or a pint down the pub.

The Teej said,
Even if it did happen to me, I wouldn't really care. 4.34% of £26 is something like £1.12. Even those paying £70 will only have to pay £3 extra - chances are if you can afford to have £70 contract, an extra £3 isn't really going to matter.

If it was something like an extra £10 onto my contract I'd be massively screwing, however, £1? I pay more for that on fizzy drinks or a pint down the pub.

Think your missing the point

That's not the point. They are increasing prices with the threat of termination fees (meaning they get the money anyway) should the customer not agree. This is unfair.

There's a couple of threads over on moneysavingexpert about this, one of which quotes the Telecommunications Act 2003 General Section 9 in that the supplier must a) give a minimum of one month's notice of a change in charges (done), b) give option to cancel without charge (not done) and that option be given when informing of change (not done).

They've gone further than not informing of the option to cancel without penalty, they're stating exactly the opposite. So that's one breach of contract law and two breaches of the Telecommunications Act. Three strikes and out anyone?

As already said, I am pretty sure they legally have to allow people to cancel if they want to, and this right has to be specifically mentioned to the customers when they are told of the price change.

From the contract standpoint, I am fairly certain that Orange are well within their rights to increase a price if they feel this is warranted. Terms in conditions state that one can cancel a contract if a price increase is excessive. Now I appreciate that the current economy is tough, but I do not see how 4.34% increase can be deemed excessively detrimental. On the cheapest plan, the increase will be less than 50p. On the most expensive one, it will go up by less than £3. How is that excessive? If they were to double the prices, then sure. OFCOM -- UK's telco watchdog -- are advising that people complain to Orange and, if they are still unhappy, to take it up through Alternative Dispute Resolution.

Sorry, law trumps terms and conditions. The law doesn't say anything about "excessive" as that is subjective. People called the 2.5% increase in VAT excessive, but 4% isn't?

Ignoring your ridiculous comparison with a VAT increase, from what I have been reading, Ofcom are saying that if a change does not cause 'material detriment' then Orange does not have to allow subscribers to exit contracts without early termination fees. Whether 4% is materially detrimental is between a customer, Orange and whatever dispute resolution path the previous two choose to go down.

mrbester said,
What is ridiculous about an example of consumers considering a percentage increase less than that proposed by Orange excessive?
Consumers threw a fit about a VAT hike because it increased their spending pretty much across the board as most products and services are not exempt from VAT. And it is also proportional to product/service price rather than uniform. That's a whole different kettle of fish to a fixed price monthly spend of a mobile telephone service contract.

Once you sign a contract, here in Finland, the price will stay the same until the end of the contract. The price will stay the same even if the value of € goes down (or up).

A few years back when I had a contract with O2, they tried the same thing, which turned out to be a breach of contract and allowed me to end my contract early with no penalty. Might be worth existing customers to check if there is a clause in their contracts that allow them to increase the price, as if there is not, then they could probably invoke the same thing as I did with O2.

The information listed in the main post says it all. There is a cost increase on old plans in january but as it is in relation to the RPI and not the cost of the plan itsself, there are no free terminations allowed. What we are offering is a talkplan change which are not going up price wise in January.

OrangeRep said,
The information listed in the main post says it all. There is a cost increase on old plans in january but as it is in relation to the RPI and not the cost of the plan itsself, there are no free terminations allowed.

Disingenuous. A cost increase on a plan is a cost increase on a plan. RPI is not a measure of a tax level maximum that can be levied at your discretion outside of base cost as the monies still go to you, not a third party. Not only that the title of the page is "An increase to your monthly price plan" which can only be interpreted as a change in the contract payment amounts to you.

Contract law does indeed allow for price increases, an example of which is RPI. However the Telecommunications Act 2003 does not differentiate between a change in price and a change in price "in relation to RPI" (or anything else) simply because there is no difference. As an entity subject to the Act you can't use just contract law and ignore the (overriding) Act no matter what you might want.

OrangeRep said,
What we are offering is a talkplan change which are not going up price wise in January.

Nowhere does it say that on the linked page. It only mentions no changes to out of plan charges:
Orange page
Out of plan charges, such as calls, texts and data will not be changing.

To say that this is due to a recent change in inflation is balls as RPI was 5.1% back in January.

mrbester said,

Disingenuous. A cost increase on a plan is a cost increase on a plan. RPI is not a measure of a tax level maximum that can be levied at your discretion outside of base cost as the monies still go to you, not a third party. Not only that the title of the page is "An increase to your monthly price plan" which can only be interpreted as a change in the contract payment amounts to you.

Contract law does indeed allow for price increases, an example of which is RPI. However the Telecommunications Act 2003 does not differentiate between a change in price and a change in price "in relation to RPI" (or anything else) simply because there is no difference. As an entity subject to the Act you can't use just contract law and ignore the (overriding) Act no matter what you might want.


Nowhere does it say that on the linked page. It only mentions no changes to out of plan charges:


To say that this is due to a recent change in inflation is balls as RPI was 5.1% back in January.


To not put too fine a point on it. If we as a company decided to increase the cost ourselves with no reason and no notification then all customers concerned could disconnect. From the entire customer base approx 5,000,00 people will be effected so it is not something that was decided lightly, In the past inflation has been something that the company has absorbed as it was a low enough figure but with the increase this time, it has gone way over the budgeted limit. If anyone wants to they can move to a new talk plan for the same value, mins, sms, data allowance they are on with no additional charges in Jan or remain on the current plan which will see the increase. It is listed in the T&C for all contracts that increase/decrease in cost that is caused by external sources or governing bodies if it is within a certain limit (this time being RPI at <5%) the terms of the contract havn't been breached. We are also offering over 30 days notice and alternative options to avoid a lot of damage.

OrangeRep said,
If anyone wants to they can move to a new talk plan for the same value, mins, sms, data allowance they are on with no additional charges in Jan or remain on the current plan which will see the increase.

So you are offering two identical products for different prices? If everyone affected by the increase changed to the new plan how would that ameliorate the losses due to inflation?

We are also offering over 30 days notice and alternative options to avoid a lot of damage.

Seeing as you have to offer at least 30 days notice of change by law that point is moot. I wish you luck in your hoping that the inherent resistance to change of customer bases enables you to offset losses by dint of them not bothering to change to an identical plan that doesn't have this increase.

The information listed in the main post says it all. There is a cost increase on old plans in january but as it is in relation to the RPI and not the cost of the plan itsself, there are no free terminations allowed. What we are offering is a talkplan change which are not going up price wise in January.i

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