Thousands of customers are to be affected by a price hike from mobile phone operator Three.
The company has revealed plans to charge an extra €5 a month on their Classic Flex Max SIM-only plan, starting from June.
The move, which will net Three an extra €1.2m a year, will affect around 20,000 people — 1% of Three’s 2m customer base.
While a spokesperson for the company said the price plan in question “will remain one of the best value mobile packages available”, a leading consumer expert has expressed concern about the move.
Dermott Jewel, policy and council advisor at the Consumers’ Association of Ireland (CAI), said Three’s recent takeover of O2 could result in higher mobile phone bills in Ireland, a fear echoed by Ireland’s communications regulator and by some in the European Commission.
“I think this increase proves a certain degree of competition has indeed been sucked out of the market,” he said.
Last year, Three completed their deal to purchase O2 Ireland, reportedly paying around €850m for the acquisition. They are now the second-largest mobile operator in Ireland, second to Vodafone, having absorbed 1.5m O2 customers.
“With the takeover of O2 by Three, was there a competitive edge held? No, there wasn’t. It has taken a deeper cut of the market and I think, to a large extent, this is going under the radar,” said Mr Jewell.
“Here you have a company that has 37% of the market share and they’re increasing their prices. That’s not competitive, it’s just looking for more money. Something really needs to give in this market.”
Previous pre-pay O2 customers may also see increased charges – voice calls will go up by 3c per minute, and text messages will go up by a further 2c.
These charges will apply to customers who have not purchased a bundle, or who exceed their bundle’s allocation of texts and/or minutes.“If customers remain within their bundle allocation there will be no change,” a Three spokesperson said.
Up until recently, O2 Ireland bill-pay tariffs were the most expensive in Ireland, while Three would have been seen as one of the cheapest.
The hikes could be seen as an effort by the operator to generate greater profitability from its operations in Ireland, especially after losing €1bn in Ireland since establishing here a decade ago.
However, the CAI is concerned Ireland is becoming less competitive, especially when compared to the UK.
“We are still so much more expensive than our nearest neighbour,” said Mr Jewell. “Granted, there are more people in the UK, but there are also more players meaning better competition and better deals.
“Having said that, the move to increase prices, that in itself could spark some competition in the market. It could be an opportunity for Vodafone or for anyone else to come along and say ‘Well here’s a different offer, a better one’ or something like that.”
In a statement, Three said the price hikes are necessary for “continued investment” in their network.
“It’s essential that we continue to invest to create a state-of-the-art 4G network, with enhanced data and network quality for our customers to enjoy,” it said.
“We are constantly reviewing our price plans to ensure that they are competitive and offer value to our customers.”
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