Three’s pay-as-you-go prices to rise by up to 250% for thousands of users

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The mobile phone company Three is pushing through another round of big price increases for its pay-as-you-go customers, with the cost of making a call jumping by an inflation-busting 250%.

The higher call, data and text message costs will be a fresh blow to households already struggling with soaring living costs. Pre-paid mobiles are more commonly used by Britons aged over 65 and those in low-income households.

From 12 July the cost of a call will jump from 10p to 35p a minute. The cost of sending a text message will go up by 50% to 15p while data will double to 10p a MB.

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It is the second big increase in under 18 months from Three and taken together they will result in a tenfold increase in call costs. In February 2021 it increased the call rate from 3p to 10p.

In a statement Three said: “Like many mobile providers, we have to review and revise our pricing. Our new rates still remain competitive across the market.”

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The price increases will affect only traditional PAYG customers who “top up” their credit, rather than buying a data pack, so are charged for each minute, text and MB of data as they use it.

Three declined to say how many of its 1.6 million PAYG customers still used their phones in this way. It encourages customers to buy its data bundles, which start at £10 a month. They offer unlimited minutes and texts, as well as cheaper data, but the allowance is valid only for a month so users must top up regularly.

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The company said it was investing more than £2bn to ensure it had a strong 4G and 5G network capable of delivering better connectivity for customers.

“We continue to focus on improving customer experience and deliver better value on our new PAYG services, giving customers access to more competitive deals and 5G at no extra cost,” the company said, adding that it had begun contacting customers before the price rise on 12 July.

The most recent research by Ofcom found that 14% of Britons use a pre-pay mobile, with the lion’s share of users on a contract linked to their handset or a sim-only deal.

The report also showed that while only about one in 10 of those below retirement age use a pre-pay handset, for those aged 65 to 74 that figure increases to 23% and for over-75s it is 34%. Pre-pay phones are also more common in lower-income households; while 8% of those in the AB socioeconomic groups use them, for DEs that figure is 22%.

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