Both the Chancellor and Telecoms Minister have written to the CEOs of major telecoms providers in the UK, in addition to regulator Ofcom, about unannounced mid-contract price rises. Chancellor of the Exchequer Rachel Reeves has asked the regulator to review the 30-day telecoms cancellation rule.

The letter has come amid the UK government’s Autumn Budget 2025 announcement, which saw some technology announcements in the realm of AI and SMR growth development.

In the Budget document, the government has said it is “committed to protecting consumers, so they are treated fairly, in the telecoms sector, where the Chancellor and the secretary of state for science, innovation and technology are working alongside Ofcom to ensure customers get a fair deal and are able to switch provider easily”.

Background: The impact of telecoms price rises

In January 2025, Ofcom introduced new rules that required telecoms providers to show yearly bill rises in pounds and pence before customers sign-up – so that they know the full extent of the deal they are getting. However, in October, O2 announced all existing customers would see their bills rise by 40% more than they were originally told, with mid-contract price increases.

The company did enable customers to leave their contract penalty-free.

This has now prompted the letter asking for Ofcom to review the “suitability” of the current 30-day rule, in addition to producing an interim report of the impact of the January 2025 changes by Spring 2026.

Ernest Doku, Uswitch mobiles expert, said at the time of the O2 price hike: “This change adds a huge increase proportionally for customers on cheaper deals. On O2’s £8.50 SIM-only 12-month contract with 50GB data and unlimited calls and texts, this represents a staggering 29% increase annually.

“This move puts O2’s mid contract price rise at the higher end of the scale of mobile providers’ increases to date. With different networks taking changing approaches to price increases, it’s never been more important to compare deals available to you to make sure you’re getting the best deal.”

The government’s letter to telco CEOs

“The commitments that industry has made through the Digital Inclusion Action Plan, and wider efforts, such as the provision of the lower cost social tariffs are vital in supporting vulnerable and digitally excluded consumers. However, it is clear that more needs to be done to protect all consumers. Ordinary people should feel empowered when engaging with the sector and confident they are getting a good deal.

“We are asking you to reinforce your commitment to treating customers fairly, including by confirming customers under contract will not face price rises beyond those that they signed up to. We would also like you to take proactive steps to move legacy customers onto the pounds and pence approach for price communications with no impact on the timing of planned price increases.

“We are also asking that you take further steps to ensure that consumers have a clear and accurate understanding of the quality of service they can expect from their telecoms provider in communications with customers, where appropriate.

“We will be convening a roundtable to discuss further voluntary action to support telecoms customers, as well as areas that government can do more to enable the sector to drive investment in the UK’s digital infrastructure. Our offices will be in touch with further details, and we look forward to working together on these issues.”

Next steps and avoiding an ‘enterprise monopoly’

The roundtable proposed will take place with major telecoms providers to discuss how consumers can be supported further. So far, the consensus is that customers should be treated fairly by their provider, with the government arguing that providers shouldn’t be increasing prices more than specified – even if the user can leave their contract early.

The main points, as set out by the Money Saving Expert website, asks providers to:

• Reinforce commitments to treating customers fairly – including by confirming that customers under contract will not face price rises beyond those that they signed up to.
• Take proactive steps to move legacy customers onto the pounds and pence approach for communicating price changes, with no impact on the timing of planned price increases.
• Ensure consumers have a clear and accurate understanding of the quality of service they should expect from their provider.

Nationwide, the UK telecoms market has faced rising consolidation this year, particularly on account of significant events like the VodafoneThree merger. Additionally, pressure from alternative network providers (altnets) and mobile virtual network operators (MVNOs) is creating a more competitive landscape.

Comparison site Think Broadband surmised: “Our view is that a competitive market is by far the best regulator of the industry as a whole (not just prices but innovation, etc.) and putting consumer interest first, although we do think there’s an element of oligopoly and monopolistic competition traits given how similar many broadband contracts are (term length, price increases, etc.) within the big retail players.”

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Image credit: 11/06/2025. London. The Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street on her way to deliver the Spending Review to parliament Picture by Simon Walker / HM Treasury / CC BY-NC-ND 2.0 / Deed.