Mobile phone providers in war of words over handset prices

UK MOBILE networks have been plunged into a row over handset prices as they grapple for customers amid a deepening cost of living crisis.

Virgin Media O2 (VMO2) accused its rivals of “swindling” consumers by continuing to charge them for mobile phones they have already paid off as part of their contract.

The telecoms company said this effectively meant customers were paying for their mobile twice and estimated that the overpayments totalled £530m each year.

VMO2 called on rivals EE, Vodafone and Three to split the cost of contracts between handset and airtime and to automatically roll down customers on to an airtime-only plan at the end of their minimum term.

The company also said customers should be informed when they have paid off the cost of their handsets at the end of the contract. Gareth Turpin, chief commercial officer of VMO2, said the company wanted to improve trust and transparency in the industry, adding that other operators should step up instead of regulator Ofcom getting involved.

But the call to arms sparked fury from rival networks, which branded the claims “confusing” and “misleading”.

EE, Vodafone and Three all said they already offered split contracts and provided customers with clear end-of-contract notifications.

EE also accused VMO2 of “double standards”, saying the company increased broadband prices by as much as 50pc at the end of a contract.

A spokesman for BT, which owns EE, said: “We find these claims from Virgin Media O2 to be misleading and unnecessary – designed to chase headlines, at a time when consumers need confidence that the industry is clear and straightforward.”

A Vodafone spokesman said: “We’re disappointed to see VMO2 confusing consumers with incorrect information and sensationalist headlines at a time when as an industry, we all need to be providing consumers with greater clarity to enable them to make the best choices for their needs.”

The war of words highlights tensions across the telecoms industry as operators grapple with tight margins and a deepening cost-of-living crisis.

The research by VMO2 found more than 90pc of Britons are unaware they could be charged for handsets they have already paid off, with the issue disproportionately affecting older people and those on the lowest incomes.

The row comes amid ongoing talks between Vodafone and Three over a merger that would create the UK’S biggest mobile network with 27m customers.

However, the deal is likely to face scrutiny from competition regulators amid concerns reducing the number of operators from four to three will push up prices.