I know it says it somewhere in the small print, but I still think it's dirty. A 2Y contract is meant to be a 2Y contract. Then after that, the terms can change.
What makes it even worse is that a contract price is made up from the handset cost plus cost of airtime. There's no way in hell the phone company should be able to hit their customers with an RPI increase on the handset part of the contract, since the device cost would in no way increase after the point at which the company bought it. Yet somehow the telcos have got away with it.