Mobile monthly cost

[DrJazz]

 Is there someone form Virgin who can answer and justify this for me?

Why do Virgin use RPI inflation as the basis for their annual cost increase?   The industry seemed to have latched on to annual increases of (inflation + 3.9%) (even this seems a bit random) but it appears every other provider except Virgin uses CPI + 3.9.  Virgin charge RPI + 3.9%.     It's bad enough that CPI is running at 9%, but RPI is currently running at 13.7% and this is not likely to decrease by much (if at all) in the foreseeable future.

RPI is outdated anyway, and CPI is supposed to reflect commodity and services prices.   Who's looking forward to an increase of  17.6% on their mobile contact next time round?  Compound your bill at that rate for a few years and bills are going to be huge !!    I think this is close to rip off territory.

[enlli · Accepted solution]

O2 use RPI

I get a 12 month SIM only contract the day after the rise and leave at the end. I then hunt through available deals.

Presently, I'm paying around £5 less than 4 years ago for a similar deal then.

[Paulina_Z]

Hi @DrJazz,

Welcome back to our Community Forums! Thank you for your post and I'm very sorry to hear that you're a little unsure about the Mobile RPI increases. 

You can read all about this year's RPI increase on our website where further details have been included to help explain the situation. 

If there's anything else we can do to help, please let us know. We're here to assist.

Thank you.

[DrJazz]

Yes maybe that's what I need to do. O2 and Virgin have merged so that's why they both charge that rate I suppose, but I should shop around more regularly to look at the rates on offer. I've never changed provider but I'm guessing it's pretty easy to do. I have 5 mobile contracts with Virgin for me and the family so it's gonna start hurting soon...

[enlli]

Interesting that all the major players have a + 3.9% figure but deny being a cartel.

[DrJazz]

Yes very interesting!   I guess they use the excuse of network improvements etc.. but it's a bit suspect.

[enlli]

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@DrJazz wrote:
Yes maybe that's what I need to do. O2 and Virgin have merged so that's why they both charge that rate I suppose, but I should shop around more regularly to look at the rates on offer. I've never changed provider but I'm guessing it's pretty easy to do. I have 5 mobile contracts with Virgin for me and the family so it's gonna start hurting soon...

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The networks rely on you thinking it is difficult to change but it's not. My change in April took just 2 text messages to transfer my number. Been doing it for years.

The other way is to get 30 day rolling contracts, bit more expensive but nowhere near the price rise and you can leave at the drop of a hat.

[DrJazz]

@ Paulina-Z      Thanks for responding, but I already know how Virgin calculate the rise but am querying why RPI inflation is used for the calculation. This makes rises very expensive, and significantly more than competitors.

Interestingly the first line in the link you provided states '  Every year, our prices go up a small amount in line with the retail price index (RPI) rate of inflation, plus an added 3.9%.  Hmmm the rise was 11.7% in April.  At that rate it would only take just over 6 years to double the price !!