It is writing to affected customers to inform them of the increase this week.

But O2 rise is much lower than their rivals.

Three, EE, BT and Vodafone all have indicated price rises of up to 4.5% either from March 31 or in April bills. The exact increase is based on when you signed up to your current deal.

Ru Bhikha, mobiles expert at price comparison site Uswitch.com, comments: “Customers will see their bills rise by February’s inflation figure of 1.4%, compared to some competitors increasing theirs by three times as much.

“These price changes are written into your contract, so frustratingly you won’t be able to leave your deal early without paying a penalty.

“If you’re not happy with the situation, ride it out and make a note to switch providers when your deal is up."

O2 emphasised that customers who sign up for a Refresh tariff ‒ where your bill is effectively split into two parts, one for your handset and one for your airtime ‒ will only see the price hike affect the airtime portion of the bill.

A spokesperson for O2 said: “Our Refresh tariffs mean that this industry increase is just 36p a month on O2’s most popular plan. Unlike other operators we only apply RPI to the airtime part of our contracts on O2 Refresh, so customers are up to £50 a year better off.”

O2 confirmed it was writing to customers this week to highlight the terms and conditions of their contract, and the fact that such increases are allowed for.

The rise is in line with January's retail prices index (RPI) measure of inflation, as announced earlier this month.

For some customers, for example those with O2's priciest "Unlimited Airtime" tariff at £35 a month, prices will rise by 95p each month, or by £11.34 over the year.

According to O2, the average increase across all of its customers will be 62p a month - or £7.44 a year.

O2 contracts stipulate that the network can raise prices in line with inflation each year which meant it does not entitle you to walk away from your contract without having to pay exit fees. This does not apply, however, to those who are out of contract.

Confirmation of the O2 price rise comes on the heels of O2 being slapped with a £10.5m fine by industry regulator Ofcom.

The fine was imposed on the network following an investigation which revealed that it had overcharged customers who left O2 between 2011 and 2019, with some people hit with their final bill twice.

The O2 increase applies to all pay-monthly tariffs taken out or upgraded since January 23, 2014, including standard, mobile broadband, and Sim-only tariffs, regardless of the contract length.

Three and EE customers will also be hit with a price rise later this year in line with latest inflation figures.

A Three spokesperson said: "This year, our customers will see an increase of 2.7% in line with the January RPI rate of inflation published by the ONS [Office for National Statistics]. This means, for example, that a Three customers paying £20 per month will see an increase of 54p per month. We will be contacting customers from March onwards, and these changes will be introduced during May 2020."

Three said all pay-monthly customers with a contract which was taken out, renewed or upgraded since May 29, 2015 will see a rise of 2.7% from this May.

This includes Sim-only and mobile broadband plans, and applies regardless of the length of your contract.

The new annual BT price rises for broadband, home phone, mobile and TV customers will come into effect on March 31. Set out back in September 2020, BT will increase prices –– alongside its subsidiaries EE and Plusnet – by 4.5%.

The BT price increase will affect the majority of its residential customers as they are now part of the provider's T&Cs.

All new BT customers who have signed up or re-contracted with BT after September 2020 with be subject to an annual price increase in line with inflation plus an additional 3.9%.

Vodafone confirmed last year that it would raise prices from April 2021 using the previous December's Consumer Prices Index (CPI) measure of inflation, as announced in January, + 3.9%. CPI was confirmed as 0.6% last month, giving an overall increase of 4.5%.

The only Vodafone pay-monthly or Sim-only customers who won't see an increase are those on Vodafone's Broadband Extra tariff.

Q and A

I am out of contract, so how do I switch?

You can switch providers hassle-free by using the Text to Switch service.

The telecoms regulator, Ofcom, introduced the system for UK mobile operators like Vodafone, O2, Three UK and EE to make it easier and quicker for consumers to change networks.

Previously if you wanted to switch to a different network then there were two potential methods. This meant you could either cancel the old service and start a new one (Cease and Re-provide) – usually losing your number in the process, or attempt to “port” your existing number by requesting a Porting Authorisation Code (PAC) from your current provider and giving this to the new operator.

The PAC process worked but some people were caught out by delays and additional charges during the notice period - effectively paying for two mobile plans at the same time, even though you could only use one service.

The simplified version allows customers to get their unique switching code, by texting the word “PAC” to the number 65075 (assuming you want to keep your mobile number).

The losing provider would immediately respond by text within a minute with the relevant number transfer code or with a cancellation code for those who aren’t intending to keep the same mobile number. The PAC code is valid for 30 days.

The unique switching code should then be passed on to the new provider at the point you place an order for their service, without the need for a further conversation. Among other things, this helps to avoid double billing during the migration.

You then give the PAC to your new provider and they must arrange for the switch to be completed within one working day.

How do I switch and get a new mobile number?

You should instead text the word “STAC” to 75075 (STAC means “Service Termination Authorisation Code“).

Customers who have more than one number linked to their account – for example those with family mobile packages – will need to request their STAC online or by phone.

Are there any other ways to do this?

You can also request your PAC via your online account on your provider's website. When you do this, your provider must provide your PAC within one minute, just as they would if you requested it by text.

What if you have more than one number linked to my account?

For those with, for example, family mobile packages – the PAC request will need to be done online or by phone.

How do I find out if there are any extra costs?

The text reply includes important information relating to any early termination charges, outstanding handset costs, or pay-as-you-go credit balances. This can be shared by text, online account or phone call.

What if I want to keep my current handset?

You may also need to check whether it is tied (or ‘locked’) to your existing network.

How do I check my contract status?

If you’re still in contract with your provider, you might have to pay charges to end your contract early. If you’re not sure whether that’s the case, text ‘INFO’ to 85075 to find this out without requesting a PAC or STAC switching code.