Three axes RPI increases; replaces it with a fixed 4.5% annual increase instead
As of now, the RPI increase on contracts is no more for new contracts and upgrades. Instead, Three has introduced a fixed increase of 4.5% every April.
Three has been making quite a lot of changes lately, and many of these may be as a result of the impact of the pandemic on phone sales in 2020 – a problem I am certain has been affecting every network in the UK and beyond.
Recently the network ditched Go Binge (as I exclusively revealed) and before that, it shuttered its loyalty reward scheme Wuntu (something I honestly don’t think anyone was going to be too bothered about as these schemes are usually pretty limited).
The impact of this change won’t affect existing customers, but as many customers have been discovering (and soon that might include me, again), Three is ‘ending’ contracts for selected customers by post or email, and offering the choice of disconnecting without penalty (thus not incurring the wrath of Ofcom), or moving on to a new 30-day rolling contract, which of course binds users to the new revised terms.
Indeed, on a 30-day contract it makes it even easier for Three to change terms in the future by employing the same trick.
It is possible to agree to a longer term for a better price, but in many cases people are actually giving notice and then bartering with the retentions team to get a better deal than they had before. It is quite ironic that if Three had said nothing, they’d actually get more money per month!
The reason for Three adopting this practice was to avoid being limited by Ofcom rules on annual RPI based increases, with some people told they’ll be paying over £5 more per month if they didn’t respond within 30 days. That’s quite a big price hike and not really in keeping with the spirit of the rules.
Being able to leave without penalty was supposed to deter networks from changing terms in a way that was detrimental to the customer, but instead this has allowed Three to impose harsher conditions on the basis that it feels customers will want to stay and pay, or may even miss the letter and be transferred by default.
More to come?
With many unknowns to come regarding the impact of Brexit in January 2021, it’s quite possible we’ll see a return to limits on data when roaming in the EU, or a return of the famous traffic throttling that still exists when roaming outside of the EU today.
It’s quite possible that Three might also be free to reintroduce a limit on tethering if Ofcom changes its own rules once free of EU regulations.
Now, it isn’t fair to simply single out Three on this because every network is likely to start making the same changes if they can.
EE has already switched from RPI increases to CPI plus a fixed amount, and there are rumours EE is also toying with the idea of ending contracts – in much the same way as consumers have to shop around each year for insurance (or accept new terms and pricing to automatically ‘renew’ when the term is up).
This actually means that if you can get a good deal, you may indeed what to try and sign up for the longest term possible – a move that the networks will clearly love as it ties you in for longer and helps reduce churn.
If you’re old enough to remember back to when Orange and T-Mobile allowed users to continue on legacy plans for decades after signing up, it seems those days are well and truly numbered. Simply continuing to pay your bill every month forever more simply isn’t going to happen if you were on a good deal.
Alarmist doom-mongering?
Is this scaremongering you naturally ask (of course you should be suspicious of anything you read on the Internet)? Well, I strongly believe it isn’t but as ever, time will tell. I was eventually vindicated when it came to the whole Feel at Home debacle and the problem thankfully went away once the EU introduced net neutrality laws that stopped the practice, literally, in June 2017.
The mobile industry obviously needs to make money if it is going to be able to invest in next-generation phone technology and continue to improve land-mass coverage, and if people are no longer upgrading and choosing to keep their existing phone for longer, or are seeking more affordable phones, then they have to make up the shortfall somehow.
The forced decision to strip out Huawei infrastructure also won’t happen for free.
Suffice to say, it’s you and me that will have to pay. I just wish our networks could find better ways to do it than being rather sneaky and underhanded.