Did you hear about Orange's 4.34% price hike to contract phones? The increase will be applied in January to all pay-monthly customers who got their contract before mid-September. My parents are each on a £10 a month contract with them, so this amounts to them paying another 43p a month, or £5.20 a year, each. A small increase, but an unexpected one. This is a legal move; in the small print it says that they can increase their prices by the rate of inflation each year (currently 5.4%). But is it really worth their while?
There has been uproar. Over the course of a 24 month contract (which many contracts are these days), customers will be paying almost enough for another month's usage at the price they signed up for. Many people did not realise that there was even the potential that the price would change. I feel that Orange will lose far more than they gain – brand loyalty in a market as competitive as mobile phone tariffs is very hard to build up, so an unexpected and somewhat unfair (although legal) price increase would probably lose them more money in customers leaving than the increased revenues they bring in now.
Are you on Orange? Would you care if this small increase happened to you? I would be annoyed if O2 did this to me, but would probably remain loyal to them unless another company provided as good network coverage in Cornwall!!