Tesco Mobile, a major UK mobile network serving over five million customers, is revolutionizing its pricing structure by eliminating confusing mid-contract price rises linked to inflation. Starting December 17, 2024, new Tesco Mobile customers will see their monthly bills increase by a fixed amount in pounds and pence, rather than a percentage tied to the Consumer Price Index (CPI). This shift towards transparent, predictable pricing comes in response to an Ofcom consultation advocating for greater clarity in mid-contract price adjustments. The move aligns with forthcoming regulations that will prohibit inflation-linked price rises for phone, broadband, and pay-TV providers from January 17, 2025. Tesco Mobile is proactively embracing this change, positioning itself as a customer-centric provider committed to fairness and predictability.
Under the new pricing model, a customer with a £14.99 monthly contract will see a 90p increase in April 2025, while a customer paying £30 a month will experience a £1.80 increase. These increases represent an approximate 6% rise, a figure that provides a clear and understandable benchmark for customers. Tesco Mobile emphasizes that this “proportional” approach ensures fairness, as price increases are directly related to the customer’s base tariff. The company is committed to full transparency, clearly outlining all price increases in pounds and pence to customers signing new contracts. This proactive communication aims to empower customers with the information they need to make informed decisions about their mobile service.
Existing customers who signed up before December 17, 2024, will continue to see their prices rise in line with inflation until their contracts are renewed. However, they will have the opportunity to switch to the new pricing structure upon contract renewal. Pay-as-you-go customers remain unaffected by this change as their service is not bound by fixed contracts. Furthermore, customers subscribed to Tesco Mobile’s Clubcard Price plans will also avoid mid-contract price rises. These special plans offer exclusive discounts and benefits to Tesco Clubcard members, including frozen monthly prices for the duration of their minimum contract period and free roaming in 48 EU and beyond destinations.
The move by Tesco Mobile reflects a broader industry trend toward greater transparency in pricing. Several other major telecom providers, including Vodafone, BT, EE, and Plusnet, have similarly announced plans to move away from inflation-linked mid-contract price rises. This industry-wide shift has been spurred by increasing consumer pressure and regulatory scrutiny over the practice, particularly in the context of the ongoing cost-of-living crisis. Many consumers have felt unfairly burdened by significant price hikes tied to inflation, which have added substantial costs to their monthly bills.
Over the past four years, telecom companies have faced criticism for imposing above-inflation mid-contract price increases. These increases, often implemented in April, have been justified by providers as necessary to offset rising costs. However, consumer advocates have argued that fixed contracts should remain true to their name and maintain a consistent price throughout the contract term. The escalating inflation rates during the cost-of-living crisis have exacerbated this issue, leading to substantial price hikes of up to 8.8% for some customers, adding as much as £50 to their bills. The shift towards fixed price increases comes as a welcome change for consumers seeking greater predictability and control over their telecom expenses.
Tesco Mobile’s Clubcard Prices offer a unique value proposition for Clubcard members. These plans provide exclusive discounts on mobile phones, contracts, SIM-only deals, and accessories. Beyond the price benefits, Clubcard Price customers also enjoy free roaming within the EU, allowing them to use their UK allowances without incurring extra charges. The Clubcard loyalty program itself allows members to earn points for every pound spent at Tesco, which can then be redeemed for vouchers or discounts with various Tesco partners. This integrated loyalty program offers additional value and savings opportunities for Tesco Mobile customers who are also Clubcard members. Furthermore, customers are encouraged to explore strategies to reduce their telecom costs, such as switching providers, haggling for better deals, or investigating social tariffs designed for low-income individuals. By being proactive and informed, customers can navigate the telecom market effectively and secure the best possible value for their money.
