RPI and CPI Plus 3.9% on Business Mobile Contracts: How the Annual Price Rise Actually Works

Quick answer

RPI (Retail Prices Index) and CPI (Consumer Prices Index) are the two official UK measures of inflation, published monthly by the Office for National Statistics. For roughly a decade UK mobile networks wrote a clause into business contracts allowing the monthly price to rise every spring by one of these indices plus 3.9%. In April 2026 that meant 7.3% on CPI-linked contracts (3.4% plus 3.9%) and 7.7% on O2's RPI-linked ones (3.8% plus 3.9%). Ofcom banned inflation-linked and percentage rises in new contracts for consumers, small businesses of ten employees or fewer, and charities from 17 January 2025, so newer contracts state a fixed pounds-and-pence rise instead. But every contract signed before your network switched still carries the old clause until it is re-signed, and it is the single most expensive line of small print on most business mobile bills.

What RPI and CPI actually are

Both indices track the price of a representative basket of goods and services over time and express the change as an annual percentage.

CPI (Consumer Prices Index) is the UK's official inflation measure and the one the Bank of England targets at 2%. It uses a geometric mean to combine prices, which slightly dampens the result, and excludes owner-occupier housing costs such as mortgage interest.

RPI (Retail Prices Index) is the older measure. It includes mortgage interest and council tax and uses an arithmetic mean, which tends to produce a higher figure. The ONS stopped classifying RPI as a national statistic in 2013 because of these methodological problems, but it continues to publish it because so many contracts, including telecoms contracts, still reference it. A reform aligning RPI with CPIH is not due until 2030 at the earliest.

The gap between the two is not trivial. In the twelve months to December 2025 CPI was 3.4% and RPI was 4.2%. Over the high-inflation year to December 2022, CPI peaked at 10.5% while RPI hit 13.4%. A contract linked to RPI will, in almost every year, rise by more than an otherwise identical CPI-linked one.

Why the networks added 3.9%

The "plus 3.9%" is not an inflation adjustment; it is a fixed annual increase dressed as one. It arrived across the industry between 2020 and 2021 as networks moved away from plain RPI clauses, and the justification offered was investment in 5G and network capacity. In practice it guaranteed a real-terms price increase every year of the contract, whatever inflation did.

Most legacy clauses also contain a floor: if the index is zero or negative, the 3.9% still applies. O2's terms, for example, state that if RPI is equal to or less than zero, the rental charge rises by 3.9% only. Deflation would never have reduced your bill.

Which figure, and when

The detail that catches businesses out is that the rise is not based on inflation at the moment it is applied. Each network fixes it months earlier:

So the 7.3% applied by EE and Vodafone in spring 2026 was set by December 2025 CPI (3.4%), published on 21 January 2026, and the April 2027 rise will be set by December 2026 CPI, published in mid-January 2027. If you are budgeting for next year, the ONS release calendar is the date to watch, not April.

How to calculate your own increase

For a legacy clause, the arithmetic is straightforward:

1. Take the relevant index figure (December CPI or January RPI) as a percentage.
2. Add 3.9.
3. Multiply your current monthly plan price (before VAT) by that percentage.

A £35 line on CPI plus 3.9% in April 2026: 3.4 + 3.9 = 7.3%; £35 × 0.073 = £2.56 extra per month, so £37.56. Networks round to the nearest penny, and some round up.

For a fixed pounds-and-pence contract there is nothing to calculate: the amount in your pre-contract information is added on the stated date. The catch is that fixed amounts vary hugely by network and plan type, from 50p on the cheapest Three plans to £3.00 on EE handset plans and Vodafone limited-company plans. We list every network's current figure in our business mobile price rises 2026 guide.

The compounding effect over a contract

Because each year's rise is applied to the already-increased price, a percentage clause compounds. Here is a £30 line over the last three spring rises:

Three rises, 23.2% in total, on a contract the business believed was fixed at £30. Go back one more year and the picture is worse: the April 2023 rise, based on December 2022 CPI of 10.5%, was 14.4%, and a £30 line from early 2023 is now above £42.

Fixed-amount clauses add the same cash figure each year, so they do not compound, but they can still add up to a larger percentage on a cheap plan. £3.00 a year on a £15 SIM-only plan is 20%, then a further 16.7%, then 14.3%: £24 by year four.

Why Ofcom banned it for new contracts

In its 2024 review Ofcom found that inflation-linked terms made it impossible for customers to know what they would pay over a contract, shifted all of the inflation risk from the provider to the customer, and made comparing offers "complex and laborious". From 17 January 2025, any in-contract rise to the core subscription price in a new contract with a consumer, a business of ten employees or fewer, or a not-for-profit must be stated in pounds and pence, with the date it takes effect, prominently, before the customer signs. Inflation-linked and percentage-based terms are prohibited in those contracts.

The rule does not:

• change any contract signed or upgraded before your network moved to the new model. Legacy clauses run until you re-sign;
• apply to businesses with more than ten employees, or to bespoke negotiated agreements. O2's larger-account Business tariffs still rise by RPI; Three's Adapt and Dynamic plans still rise by 4.5%;
• prevent price rises altogether. It only requires that they be specified. A network can still increase prices that are not written in, but then it must give 30 days' notice and a penalty-free exit. Our guide to whether you can cancel after a price rise covers that.
• necessarily cover out-of-bundle charges, add-ons or roaming, which several networks still increase by CPI plus 3.9% or a fixed 5%.

The transition dates matter. EE moved small-business plans to fixed rises from 2 September 2024, Vodafone from 2 July 2024, Three from 8 September 2024 and O2 from 9 January 2025. If your last contract or upgrade predates those, you are still on the old model.

Is a fixed rise better than an inflation-linked one?

Usually, but not automatically. Fixed rises give certainty and stop the networks profiting from inflation spikes. But the networks have set the fixed amounts at a level that assumes fairly high inflation: £3.00 on a £30 plan is 10%, more than the 7.3% legacy customers paid this year. The break-even is roughly where the fixed amount equals the index plus 3.9% of your plan price. On a £20 plan, £1.50 beats CPI plus 3.9% whenever CPI is above about 3.6%; £3.00 only beats it once CPI passes 11%.

The practical answer is not to choose between the two, but to negotiate the fixed amount down or out entirely. Some business tariffs sold through resellers carry no in-contract increase at all. See how to avoid business mobile price rises, and for the wider picture on term lengths and exit fees, our business mobile contracts guide.

If you would like us to check which clause each of your lines is on, send us a recent bill. Request a business mobile quote or arrange a callback and we will do the arithmetic for you.

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