Mid-contract price hikes have cost UK customers nearly £1 billion since 2013

The figure is expected to exceed £1.1bn by the end of 2019

UK monthly contract and mobile broadband subscribers have paid mobile networks nearly £1 billion due to mid-contract price hikes since 2013, according to new research.

The study by mobile analyst firm Tarifica, commissioned by Tesco Mobile, comes in light of the announcements that the four major operators are introducing price hikes of 2.5 per cent and upwards from next month.

The price increases for 2019 are estimated to cost mobile customers almost £173 million. The analysts researched the scale of RPI increases for each network, the average monthly cost for monthly contract customers, the average length of time between contracts, and the number of contracts per mobile operator to arrive at their estimate.

The network with the highest amount of cost to consumers since 2013 is EE with £440.791 million. The network with the lowest amount was Three with £83.249 million. O2 and Vodafone accounted for £306 million and £124.5 million respectively.

Tarifica director William Watts said: “We estimate that since 2013 once the latest set of price increases have been taken into account, these inflation-based price increases will cost the UK’s mobile consumers in excess of £1.1 billion.

“When calculating the cost to consumers, the most important factor to consider is that price escalations are applied every month until the contract has run its course. So, while many operators advertise the fact that these changes are only costing customers ‘between £1 and £2 per month,’ the cost over the life of a contract can approach £50 or more in some cases.

“Further, these escalations are stacked on top of each other year on year, meaning that the following year’s price increase is built off the one from the previous year, similar to compounding interest in a savings account.”