As a result of a higher retail price index, RPI, Orange has announced plans to increase tariffs by 4.3% in the new year. Anyone who signed an Orange monthly contract prior to September has been notified of the upcoming rate increase and will not be allowed to dispute the price hikes.
According to Orange, this change will affect only affect those on a monthly call plan but not texts, calls and various other charges. This will increase the average tariff by £1.50 monthly in terms of the £35 per month plan. These changes are set to take place on 8 January.
Unfortunately for current customers of Orange, they will not be able to break the contractual agreement and will be required to pay the higher rate simply because those changes are lower than the RPI. It may however affect whether or not new customers are willing to sign contracts at this higher rate.
A spokesperson for Orange blamed the price hikes on a higher than expected rate of inflation and justified the increase by saying it was “written into the contracts.” Other companies have also increased rates such as the 50p increase Vodafone instituted back in September of this year.
Further, Orange states that they have the right to increase rates by an amount under or equal to the RPI within any 12 month timeframe and customers are not given the right to cancel contracts. These are the contractual terms customers agreed to when signing their contracts.
Ofcom, the telecoms regulator, does allow consumers to break contractual agreements under certain situations without accruing a penalty. If the price hike had been higher than the RPI and inordinately large, consumers would have been allowed to break contracts.
Since this isn’t the case as Orange has kept its hike lower than the RPI, consumers are obligated to pay the new rates or face penalties. Many customers have not taken the news well which may not bode well for Orange at contract renewal time.
