Question

RPI Increase by 7.8%

  • 3 March 2022
  • 8 replies
  • 1690 views
C
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Userlevel 1

Until recently my monthly bill was £26.99, part of which (the majority of which, probably) is to pay for the handset, and part of which is to pay for the service.

 

The annual RPI price increase, it seems to me, only makes sense to apply to the part of the monthly charge that relates to the ongoing service.

 

The handset had a particular value at the time my contract started, and that doesn’t change with inflation. It decreases over time if anything.

 

What is the rationale behind applying the 7.8% increase to the entire £26.99 fee?

 

Thanks

8 replies

andewhite
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Hello @customer12345,

The following page may help (a little):

https://www.idmobile.co.uk/help-and-advice/retail-price-index

It begins by stating the RPI increase only applies to the monthly line rental cost - and not the cost of the handset. However, the online calculator doesn’t make clear you should enter just the monthly line rental cost of your plan.

Anyway, good luck. 

C
Rank
Userlevel 1

Thanks for the response, I had read that page, but it doesn’t answer my question.

It begins by stating the RPI increase only applies to the monthly line rental cost - and not the cost of the handset.

 

That’s not my interpretation of the wording. it says:

Your monthly line rental cost will be adjusted each April by the RPI rate published in February.

 

There is no explicit mention of the fact that the cost of the handset is not part of the calculation.

Moreover, further down, there is an ambiguously worded sentence which could be interpreted to mean that ONLY handset contracts are affected:

The RPI increase will apply if you've upgraded or purchased a new iD Mobile 24-month handset plan between the 1st of March 2020 and 1st of February 2022.

 

This is supported by some comments made it other iD Mobile Community threads:

@Mohammed (i D Mobile Employee) commented that:

RPI increases are not currently applied to SIM only plans.

So a 30-day, 12-month or 24-month SIM only deal is excluded from an RPI increase so we don’t currently apply this to such plans.

 

I can’t find any explanation from iD Mobile about why things are arranged this way.

It seems counterintuitive to me, but I’m no economist.

Can we get an official explanation from iD Mobile why only handset plans are included?

Further to this, if one considers the monthly cost of the handset plan to be divided into the service provision part and the handset payment part (it would be misleading to ignore the obvious fact that there are two things being purchased), why is the RPI increase applied to the entire rental?

andewhite
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Userlevel 8
Badge +9

Thanks for the response, I had read that page, but it doesn’t answer my question.

 

Further to this, if one considers the monthly cost of the handset plan to be divided into the service provision part and the handset payment part (it would be misleading to ignore the obvious fact that there are two things being purchased), why is the RPI increase applied to the entire rental?

 

 

My reading of the article is that this RPI increase only applies to the line rental component, of new contracts started between 1st March 2020 and 1st February 2022.

I’m guessing you’ve got a 24-month plan for handset with line rental, which started between 1st March 2020 and 1st February 2022 - does your monthly bill from iD breakdown the monthly line rental and the monthly handset costs?

Anyway, no doubt someone from iD Mobile will respond to your post here due course, but an answer might come sooner if you PM iD on facebook or twitter - good luck.

Waywitch
Rank
Userlevel 1

RPI is not a Valid Legal Statistic the valid price increase outside of contract is CPI.

Don’t roll over and except the RPI, as if increase is above the CPI level you have option to terminate early without penalty. 

KieranC
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Userlevel 4
Badge +3

Hi everyone,

The monthly line rental charge is your monthly cost. From your post and explanation, I can understand why this might cause some confusion, so we'll get that line updated. 

Every year, the majority of mobile phone networks increase their prices for customers. Some do so at a standard rate, others a standard rate plus inflation. At iD Mobile we increase prices yearly in line with inflation only. We use the Retail Price Index for this measure, and are increasing prices for Pay Monthly handset customers by 7.8% from April 2022.

For the last two years iD Mobile have implemented the lowest price increase when compared to major networks (EE, Three, O2 and Vodafone) and this year only one network is raising their prices by a lower amount.

Despite this increase in monthly cost, iD Mobile customers will still benefit from fantastic value, with our handsets on average £12 a month cheaper vs major networks. They will also continue to receive Data Rollover, Roaming and 5G at no extra cost. The price increases also allows us to continue investing in our service, ensuring that we are constantly improving for over 1.1m iD Mobile customers.

Thanks,

Kieran

iD Mobile Experience Team
andewhite
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Userlevel 8
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Okay @Kieran C, if you’re on an iD contract including a monthly iD handset loan repayment (over 12 or 24 month period), along with a line rental payment, in order to use the handset on iD’s network, whereabouts in your bill do you find the breakdown for these two items?

TIA.

KieranC
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Userlevel 4
Badge +3

Hi @andewhite,

There is no break down of costs in a 24-month handset plan; there is only the full amount. 

The only time some form of breakdown is available is when a plan is purchased on a credit agreement through Currys. This is because the iD plan purchased during that process is SIM only and the handset is bought on credit (so seperate items/bills etc.). For more info on Currys mobile plans, you can check out https://www.currys.co.uk/mobile/

Hope this helps,

Kieran

iD Mobile Experience Team
andewhite
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Userlevel 8
Badge +9

Okay thanks @Kieran C, when a device is purchased through the iD Mobile online shop, how is the handset purchase funded?

Surely, a customer is getting credit or a loan, from iD, in to fund the handset purchase, in addition to paying in advance for a monthly line rental.

TIA.

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