O2 increases prices unusually sharply – experts see trend reversal

cell phone tariffs
The costs have been falling for years – now O2 is increasing the prices for mobile phone tariffs to an unusual extent

Headquarters of the mobile phone provider O2 in Munich


The O2 network has been considered a cheap alternative to Telekom and Vodafone for years – with mostly good performance, especially in cities. The company is now announcing that it will not be able to maintain the prices for new customers.

For a long time, the prices for mobile phone contracts only went in one direction: either it got cheaper, or you got more and more performance for the same money. The O2 network in particular was always considered a safe bet when you were looking for the most lavish service package for the lowest price. This should come to an end for new customers from spring, explained Markus Haas, CEO of Telefónica Deutschland, to the “Handelsblatt“.

Higher costs – but also more performance

Due to increased investments in network expansion, the company is no longer able to offer “more service at the same price”, according to Haas in the business newspaper. Telefónica wants to start with the prepaid offers.

There is talk of price increases of up to ten percent. However, these are not “flat price surcharges”, but go hand in hand with better inclusive services, for example access to all tariffs in the 5G network, explained the company’s board of directors. If existing customers are also affected, they would have a special right of termination in the event of increases.

Christian Just, Head of the Telecommunications & Internet Department at the trade journal “computer picture“, appreciates the announcement in conversation with the star as follows: “There are two trends behind the announced price increase: On the one hand, the costs for energy and wages are also increasing for the network operators – partly also due to the state expansion obligations. On the other hand, it is certainly sometimes a question of making your own tariffs stronger than premium – Differentiate the offer from the discounters, for example by consistently including 5G for prepaid and smaller contract tariffs.”

Just sees this as an approximation of Telekom’s strategy, which raised the prices of prepaid tariffs last year, but at the same time gave them access to the 5G network – which other providers in the Telekom network, such as Congstar, are denied.

The price war turns into a performance war

The “Handelsblatt” also sees this announcement as the beginning of a trend reversal. It is said that the previous development towards more and more performance with simultaneously falling or unchanged prices could soon come to an end in Germany. The magazine expects that Telekom and Vodafone will also announce changes to their current pricing in the near future.

A completely different question arises: “It is unclear whether the trend will also spread to discounters – at Aldi Talk, for example, the prices have remained stable in recent years, while at the same time the performance, for example in terms of data volume or the replacement of inclusive minutes, has improved Allnet flat rates, improved.”

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