Uswitch responds to Tesco Mobile's change to a 'pounds and pence' model for future mid-contract price rises

Ernest Doku, Uswitch mobiles expert, responds to Tesco Mobile’s change to a ‘pounds and pence’ model for mid-contract price rises which will be applied to new contracts from 17 December:

“Tesco Mobile’s new ‘proportional’ model announced in response to Ofcom’s ban on inflation-linked price rises comes in contrast to the flat-rate increases that many providers have implemented.

“In practice, this means customers on lower priced mobile tariffs will see the lowest increases, while those who pay for a more expensive mobile deal will naturally pay proportionately more. Tesco Mobile’s price rises will only apply to customers not on a ‘Clubcard Price’ deal.  

“Tesco Mobile has advised that customers on a cheaper £14.99 a month plan will see an annual increase of 90p per month, whilst someone on a £30 a month deal would see their monthly price increase by £1.80. This works out to a 6% annual increase for every plan, which will be communicated to customers in pounds and pence.

“This new approach means that those on the lowest tariffs won’t be subject to disproportionately higher price rises, which could be a better option for customers choosing cheaper plans. However, 6% is still a material increase for consumers. 

“The percentage increase could also change every year once you’re out of contract, so Tesco Mobile customers should remain vigilant and shop around when they reach the end of their contract to ensure they get the best deal. 

“We’ve seen mobile providers take a selection of approaches when it comes to adopting a ‘pounds and pence’ model to mid-contract price rises, making it more important than ever for customers to compare options to find what’s right for them.

“Some mobile providers, such as Lebara and SMARTY, don’t raise their prices mid-contract, so it’s worth checking if you’re out of contract and eligible to change providers by texting ‘INFO’ to 65075.”