Price-hiking Big Four mobile providers trailing smaller networks on price, Which? finds 

The Big Four mobile providers are being beaten on value for money by so-called virtual networks, according to Which?’s annual mobile network survey.

O2, EE, Vodafone and Three were outperformed by providers that make use of their network infrastructure – such as Smarty, Giffgaff, Tesco Mobile and iD Mobile –  in Which?’s annual survey.

Earlier this month, the Big Four providers were among those who pushed ahead with shocking mid-contract price hikes of up to 17 per cent – despite calls from Which? to allow all customers to leave without penalty if prices increase mid-contract – leaving millions caught in a Catch-22 where they either have to accept costly fee hikes or pay exorbitant exit fees to leave early.

Which?’s latest survey suggests that, with the cost of living crisis at the forefront of people’s minds, Big Four customers should consider switching to the best-performing virtual networks to cut costs.

Three scored the lowest out of the Big Four – coming in sixteenth place with a customer score of 66 per cent. Three customers were the most likely to experience problems, with nearly half (45%) having an issue in the past 12 months, the most of any provider included in the survey. The most common issues were constantly poor phone signal, network dropouts and problems resolving queries.

Vodafone fared only slightly better than Three – coming in twelfth place with a customer score of 68 per cent. While it received solid ratings for network reliability and download speeds, it was rated poorly for customer service and incentives despite offering a variety of perks – including giveaways, cheap cinema tickets and guaranteed trade in prices.

O2 and EE were the highest scoring of the Big Four, coming in joint tenth place with a customer score of 69 per cent. Both providers received mostly mediocre scores across the board. O2 is the only provider to use the Retail Price Index to calculate contract price increases – resulting in the highest mid-contract price hikes of 17.3 per cent for some customers.

On the other end of the scale, Tesco Mobile came first with a customer score of 80 percent – scoring the highest or equal-highest across all categories.

However, for the first time in 12 years, Tesco Mobile lost its Which? Recommended Provider endorsement. This year, it began baking above-inflation price increases into new customer contracts despite previously championing fixed prices. For most Tesco customers, these price hikes will start from next April and go against Which?’s calls for providers to allow customers to leave a contract penalty-free when faced by mid-contract price rises.

In response to the cost of living crisis, Which? has also introduced a Great Value endorsement to recognise providers who offer outstanding value to anyone looking for a cheap and useful amount of data.

Smarty, Giffgaff and iD Mobile all met the Great Value criteria for offering cheap Sim-only deals. GiffGaff and Smarty came in joint fifth place with a customer score of 75 per cent and iD Mobile came in eighth place with a customer score of 72 per cent. All three providers’ customers rated them highly for value for money.

Not all virtual networks shone brightly in Which?’s survey. Asda Mobile and Lycamobile propped up the table in joint seventeenth place with a paltry customer score of 56 per cent. Both providers performed poorly on customer service, network reliability and download speeds.

With the cost of living continuing to impact household budgets, the flexibility offered by virtual networks is an attractive way to keep mobile costs down. Focusing on rolling monthly Sim-only deals over selling handsets with lengthy contracts gives challenger carriers an edge over their Big Four counterparts as customers have a lot more control over how much they want to spend each month.

Another benefit of rolling contracts is that consumers do not have to worry about the annual price rises which affect fixed term contracts as they are able to switch away without penalty.

Rocio Concha, Which? Director of Policy and Advocacy, said: 

“The vast majority of mobile customers are with one of the Big Four providers, but our research suggests consumers could save money during the cost of living crisis and get better service by switching to a better deal – such as one of those offered by Which? Great Value providers.

“Switching to a flexible one month rolling deal with one of these providers if you’re out of contract also means you’ll be protected against the mid-contract hikes of up to 17 per cent introduced by the Big Four earlier this month.

“Which? believes it’s absolutely critical that Ofcom’s review of inflation linked mid-contract hikes results in changes that ensure customers are never trapped in this situation again.”

ENDS 

Notes to editors 

Link to Ofcom’s review of mid-contract price hikes here.

The ONS states that RPI – used by some mobile firms to calculate mid-contract price hikes – is a poor measure of general inflation and no longer a national statistic (link here).

O2 has previously said that their price increase only applies to the airtime part of a customer’s bill, and not their total monthly bill which also includes a device plan. This means that the effective average price increase for Virgin Mobile and O2 customers across their whole bill is 10%, or less than 10 pence per day.

Which? cost of living campaign

The consumer champion recently launched a campaign calling on businesses in essential sectors – supermarkets, telecoms and energy – to do more to help their customers through the cost of living crisis.

As part of this, Which? called on providers to allow all customers to leave without penalty if they face mid-contract price rises. All of the Big Four mobile brands have ignored these calls and are instead ploughing ahead with price hikes of up to 17 per cent. As Ofcom reviews inflation linked mid-contract increases, Which? will push for pro-consumer changes to regulation that ensure customers are not trapped in this lose-lose situation again.

Read more about the campaign here and more about Which?’s calls on businesses here.

Research

Based on the average amounts paid by customers in a January 2023 survey of 3,400 mobile customers for phone contracts. Data includes a nationally representative sample plus a provider boost approach for brands with low sample sizes.

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at endorsementscheme@which.co.uk.

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