Mobile telco One2One is planning a fivefold price hike for its existing pay-as-you-go handsets, bringing the prices from £10 to around £60.
One2One'sd justification is that it aims to encourage people away from prepay options towards yearly contracts, which make billing easier.
But it also means One2One will be able to guarantee future income, something the telco cannot do with pay-as-you-go services. This would, among other things, give One2One more leeway in paying its debts.
The move comes shortly after One2One and Vodafone admitted they need more time to pay off to tackle the crippling cost of 3G (third generation) licenses and future investments. They've been talking to Oftel and the Treasury, among others, and have asked for extensions on repayments.
One2One's managing director Harris Jones said, in a press statement last week, that costs such as the telco's recent £5.96bn licence fee purchase would not be recovered for at least 10 years.