State of UK telecoms market: UK Chancellor urges CEOs to avoid price hikes

The UK government has warned major telecoms companies against slipping in higher mid‑contract price rises. In a joint letter to CEOs and regulator Ofcom, Chancellor Rachel Reeves and the Telecoms Minister highlighted concerns over unannounced increases, such as O2’s recent move to raise some existing customers’ bills by 40% more than originally indicated, despite allowing them to leave contracts penalty‑free.

The government has asked Ofcom to review the current 30‑day cancellation rule and to deliver an interim report by spring 2026 on the impact of January 2025 rules that forced providers to show annual bill rises in pounds and pence upfront. Ministers want providers to promise that in‑contract customers will not face price hikes beyond what they agreed, to shift legacy customers onto clear pounds‑and‑pence pricing, and to be more transparent about service quality. A roundtable with major operators will explore further voluntary measures, set against a market that is consolidating through deals like the Vodafone–Three merger while still facing pressure from altnets and MVNOs. Comparison site Think Broadband argues that competition remains the best check on the sector, even as big players show oligopoly‑like behaviour with similar contract terms and price policies.