The UK's media regulator has criticized O2 for raising prices more than it promised to customers on phone contracts.
Ofcom said it was “disappointed” with the firm and said it went against “the spirit of our rules” regarding transparency with customers about price increases.
In January new rules were introduced Ban phone and broadband companies from raising prices mid-contract without warning.
O2 said it had not gone against the regulation and that Ofcom's rules “do not prevent companies from increasing annual price changes – for example, investing in network improvements.”
The company said it was spending £700m a year on infrastructure improvements and customers could end their contracts without penalty.
But consumer expert Martin Lewis said he was “outraged” by the move, which “makes a mockery of Ofcom”.
He said on Martin Lewis' podcast that he believes this will lead to other companies following suit.
“Prices are rising for O2 customers, but this likely means the door has been opened for all of us and we may now see prices higher than we were told when we signed up,” he said.
O2 told its customers they had 30 days to cancel their contracts without any termination fees, although if their plan included a handset they would still have to repay that amount in full.
But Mr Lewis said older and vulnerable customers tended not to switch and could miss out on the 30-day window as price increases would not occur until April 2026.
O2 emailed its customers on Wednesday saying it would increase the prices of their contracts by £2.50 a month from April.
The company previously announced that monthly prices would rise by just £1.80.
“We have today written to major mobile companies reminding them of their obligations to treat customers fairly,” Ofcom said.
“We encourage any customer who wants to avoid price increases to exercise their right to withdraw without penalty and sign a new deal.”
Ofcom's rules were introduced to protect consumers and prevent unexpected price increases occurring mid-contract.
They said companies should have told customers how much their bill would rise “in pounds and pence” before they signed up.
At the time, Ofcom's director of networks and communications Natalie Black CBE said: “Our new rules mean there will be no nasty surprises and customers will know how much they will pay and when, thanks to clear markings.”
But the rules prohibited only inflation-related price increases.
The O2 price increase is a flat fee and not a percentage of your monthly bill.
Telecoms analyst Paolo Pescatore of PP Foresight said “O2 is pushing the boundaries” of regulation.
“This is extremely unfortunate given that the mobile operator should be focusing on retaining customers in a cut-throat market,” he told BBC News.
Meanwhile Tom McInnes, director of policy at Citizens Advice, said it showed Ofcom's action “did not go far enough”.
“The regulator needs to wake up and make these important markets work for the benefit of everyone,” he said.
“Ofcom needs to go back to the drawing board and put forward plans to stamp out mid-contract price rises once and for all.”
Mr Lewis also said he had written a letter to the Chancellor, the Technology Secretary and the head of Ofcom on the matter.
BBC News has contacted them for comment.
Ofcom did not comment on Mr Lewis' letter.
Ernest Doku, telecommunications expert at Uswitch, said that latest telecoms regulator complaint figures were “at one of their lowest levels ever”, service problems continued to be the leading cause of complaints against mobile and broadband providers.
“Against a backdrop of rising annual price increases, service providers must recognize their responsibility to improve service quality and cost accordingly,” he said.
“For consumers, this data is a timely reminder to regularly compare offers and switch if their supplier is not adequately meeting their needs.”
