Costs for cell phone tariffs explode

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The Vienna Chamber of Labour is now warning of a price hammer, especially for basic cell phone charges and service fees next year.

An analysis by the Chamber of Labor shows: The major providers – A1, Drei, and Magenta – have value protection or index adjustment clauses in their cell phone contracts. When inflation reaches a certain threshold, they can raise prices – they will go full through the roof next year due to high inflation.

The Chamber of Labor has calculated: An average contract tariff with an introductory fee of 40 euros means additional costs of around 41 euros in the next year. Consumers have no special termination right if the contract’s clauses are fixed.

The price increases are going through the roof and making life increasingly difficult to afford. The AK has closely examined cell phone contracts with providers A1, Drei, and Magenta: It is still relatively quiet on the mobile phone market. But in the next year, the inflation hammer will strike firmly with many Handynutzern due to the high inflation.

Many cell phone contracts have value protection or index adjustment clauses in the general terms and conditions. These clauses regulate which prices providers can adjust, when they can adapt, and from which inflation threshold value.

In other words, mobile communications companies can raise prices (basic charges, service flat rates/fees, and sometimes individual services) during the term of the contract in line with the consumer price index. And the price increase will be substantial in 2023 due to high inflation. According to the Supreme Court ruling, consumers do not have a special right of termination if such a value adjustment or indexation clause is included in the contract.

Specifically, it has been common practice for the three large providers, A1, Magenta, and Drei, to include price indexing clauses for basic charges, and sometimes service charges and other price services, in the contractual terms and conditions of new rates. Due to years of low inflation figures of no more than two percent annually, the increases have received little attention. Now, however, Statistics Austria estimates the price surge in June alone (compared to the same month last year) at 8.7 percent.

In 2023, the three “big players” will therefore be able to increase their basic charges by a hefty amount, and sometimes other prices as well:

At A1 (and Bob), service charges are also index-linked. There is also an index adjustment for specific A1 rate options, for example, cell phone guarantee, cell phone protection, or online protection.
Magenta writes in its General Terms and Conditions: “The billing applies exclusively to the monthly regular base fee of the tariff and not to the costs for additional packages and other services.”
Three restricts inflation adjustments to “fixed monthly charges in the form of the basic fee and minimum turnover.”

On the positive side, at least the three providers have not increased occasion-related ancillary charges, such as reminder or blocking fees, compared to the last Chamber of Labor survey in 2019.