Vodafone hits back at Ofcom’s price control proposal

UK operator Vodafone has hit back at regulator Ofcom’s suggestion that UK telecoms operators should not be allowed to raise consumer tariffs mid-way through fixed term contracts. Vodafone said that mobile operators are sometimes forced to adjust their prices to reflect changes in charges set by other operators for services such as premium rate or directory enquiries.

Earlier in the week Ofcom announced a consultation into mid-contract price hikes after investigating more than 1,600 consumer complaints about changes in tariffs for what consumers believed were fixed price contracts. The regulator proposed that customers should be entitled to abandon their service contracts without penalty if their fixed, broadband or mobile operator decides to raise tariffs during the contract period.

But Vodafone said Ofcom’s proposal risked “generating significant confusion and potentially increasing the cost of getting a mobile phone contract for millions of people.”

In a statement released in the wake of Ofcom’s announcement, the UK’s third-placed operator, which had 17.38 million subscribers at the end of 3Q12 according to Informa’s World Cellular Information Service, suggested Ofcom didn’t understand the difference between prices set by mobile operators and those set by other players.

“We simply do not control many of the charges faced by consumers. They are set by third parties and mobile phone companies have to pass those costs on or they will be subsidising other companies,” the operator said. “Ofcom appears resolved to introduce measures that would effectively prevent any rises in these prices being recouped while customers are still in contract.

“We cannot be held accountable should BT, for example, put up the price of calls to premium rate, 08 or its 118500 numbers. Nor can we be expected to swallow that sort of price rise ourselves.”

The firm went on to suggest that, if Ofcom’s proposals were put into action, UK mobile operators would build headroom into their tariffs to accommodate any changes in third party pricing that might occur during the length of a contract, increasing the cost of service to the consumer.

“As this is the start of a consultation on the issue we will of course be engaging with Ofcom to see how they intend to prevent price gouging by third parties, widespread consumer confusion about prices and increases in the up-front cost of getting a phone,” Vodafone said.

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