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VMO2 gets proactive on social tariffs and calls for tax cut

Virgin Media O2 is reaching out to all of its fixed-line, broadband and TV customers to share information on its social tariffs, while simultaneously calling on the government to reduce taxes on such plans.

Mary Lennighan

December 8, 2023

3 Min Read

'Tis clearly the season of goodwill for the UK's second-largest telecoms operator, which is keen to spread the word on social tariffs designed to help those receiving benefits to keep their bills down.

It is doing this by including information on its Essential Broadband and Essential Broadband Plus tariffs in with the monthly bills of all 5 million of its broadband and TV customers. It already sends information on social tariffs to customers whose contract is ending; now it is going further.

The extent to which this is an altruistic move is debatable; a little heart-warming publicity as the festive season approaches amidst an ongoing cost-of-living crisis is never going to be a bad thing. But the bottom line is that people will benefit from greater knowledge of the types of lower-cost pricing plan they could choose. And it will keep the regulator happy too.

Ofcom has been pushing hard on social tariffs for a couple of years. It has been on the case of UK operators both to launch these types of tariffs and to raise awareness of them. Earlier this year it shared data from Which? that showed just over 5% of those eligible for social tariffs had actually signed up to them, and more than half did not know that these price plans existed. It placed the blame for that squarely at the feet of operators, suggesting that they were not being upfront with customers as to the existence of social tariffs and how to sign up for them.

The regulator's crusade was not about VMO2. Nonetheless, the telco is picking up the baton and running with it.

As well as additional publicity for social tariffs and raising awareness of the available cost-of-living support in general, VMO2 is keen to bring down bills yet further.

It is calling on the government to reduce the VAT on social tariffs to 5% from 20%, with a view to the savings being passed on to consumers. In addition, it has requested that the government update its Digital Inclusion Strategy, which is now almost 10 years old, to meet the needs of today. It wants commitments on improving digital skills, and better support for the second-hand device market to help with affordability and waste reduction, as well as – wait for it – additional support for digital infrastructure rollout in rural areas, including planning reforms and a shared 5G rural network scheme.

Yep, VMO2 sneaked that one in there. Doubtless better rural networks, both fixed and mobile, would be beneficial for the people who live in those areas, and there is often a correlation between rural living and eligibility for social tariffs. But there would also be a huge benefit to telcos too, what with network rollout being pretty pricey and all.

Getting back to the bits that are actually for end-users' benefit, VMO2 also noted that it plans to launch a mobile social tariff next year. In the meantime, it is turning its O2-branded stores in the UK into what it terms National Digital Inclusion Hubs, which will enable those who need it to access 25 GB of free O2 data, text messages and calls per month.

"Having pioneered one of the first broadband social tariffs back in 2020, we know the difference that affordable connectivity can make to people's lives and we've continued to step up to provide support," said Virgin Media O2's Chief Operations Officer Rob Orr.

He's right, of course, about affordable connectivity. And VMO2's various measures are to be applauded. But let's not kid ourselves that this is entirely based on festive spirit.

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About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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