Pay more As You Go
Both Orange and Vodafone will be updating their Pay As You Go tariffs in the coming weeks, increasing the price of calls and text messages. Orange will be increasing its calls from 20p per minute to 25p per minute, and text from 10p to 12p each. Vodafone's rates will jump to the same 25p per minute and 12p per text as Orange - an interesting coincidence.
The raises come into effect as Ofcom's regulations limiting mobile termination rates - the cost operators charge each other for connecting calls not originating from their network - come into effect. While Orange hasn't stated the reason for its increases, Vodafone has explicitly named the MTR restrictions as the cause of its price hike - as it had said it would do should Ofcom carry out its plans.
Although Three, T-Mobile and O2 aren't increasing their prices proportional to Orange and Vodafone, those networks aren't any more competitive than they were previously, as their PAYG tariffs are roughly similar to Vodafone and Orange's increased rates.
Despite having cause price increases - at least in Vodafone's case - Ofcom believes that its imposition of MTR limits is the right one, and that the benefits outweigh the negatives. An Ofcom spokesperson said: "There is a lot of competition in the mobile market and we urge consumers to shop around to get the best deal for them."
In the future the MTR limits will ensure that mobile networks aren't able to gouge each other with expensive termination fees, the costs of which are almost always passed onto the consumer. It is, however, of course possible that the operators will find other ways to hike up prices.