UK Tells Mobile Operator Price Hikes Are Uncompetitive

UK regulators have been urged to investigate Britain’s phone operators after the largest companies announced similar rises in mobile contracts in the space of several months.

The four network operators that account for 87% of UK mobile customers — Vodafone, BT’s EE, CK Hutchison’s Three UK and Telefonica’s O2 — announced comparable price increases for customers with recent contracts, according to a report by Fideres Partners, a consultancy that investigates corporate wrongdoing. O2’s will go into effect next year while the other three have increased rates since last September.

Fideres, which produces research for law firms, regulators, and campaign groups, said the price hikes will cost consumers an estimated 400 million pounds ($554 million) extra per year, and it will be relatively difficult for U.K. consumers to terminate their contracts compared to other markets. Last month, it sent its findings to UK telecommunications regulator Ofcom and the Competition and Markets Authority asking them to investigate.

The regulators declined to comment on Fideres’ latest report, which contained no evidence that the phone companies colluded on the price increases.

London-based Fideres has previously produced reports highlighting banks’ pricing of corporate bonds, noting “anomalous” drug-price moves and supporting investigations against several financial institutions on collusion to fix benchmarks for interest-rate products.

Representatives for O2 and Three said they couldn’t comment without seeing the report in its entirety. A spokeswoman for BT said the change was “to simplify and consolidate our price-change policies to better reflect the Ofcom Fairness commitments,” referring to voluntary pricing guidelines.

The increase “reflects the level of investment we need to make within our business to continue our major investments in networks and service, while also prioritizing vulnerable customers suffering from financial hardship or digital exclusion.”

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