Our chief executive Peter Vicary-Smith says it’s time for a heads-up on hidden mobile phone handset costs. Wouldn’t it be easier if the cost of your handset was separate from charges for calls, data and texts?
The mobile phone industry recently reached an agreement with the Government to increase signal coverage across the UK. The industry now has a three-year deadline for tackling ‘partial not-spots’ in the countryside where, if you happened to be with the wrong network, you’d be utterly stuck if your car broke down, or you had an accident.
This is welcome news, but there are other gaping holes that this industry needs to address urgently, too. One of them is right in the middle of my mobile phone bill in the place where it should tell me where my money is going.
Any mobile phone company – and there are several – which fails to split out what you’re paying each month towards your handset from the amount you pay for your service is not being fair. It means that customers who have completed the contract period, thereby paying for the handset, then get the pleasure of paying for the handset all over again if they carry on, as many do.
Overpaying for your mobile phone
Here’s an example, based on an iPhone 6. On O2 Refresh you’d pay £48 a month for 5GB of data and unlimited minutes and texts. Of this, O2 is clear that the handset portion of the bill is £25 – so after the contract is up you pay £23 per month.
On a similar plan with Vodafone (4GB of data and unlimited minutes and texts) it costs £48.50 a month – but that price doesn’t change once you come to the end of your contract. So if a customer does nothing, they are overpaying by not moving to a Sim-only deal. If they decide to upgrade their phone, they sign up to a new contract so any ‘overpaid’ months don’t count towards the new handset.
There is good news in that four of the seven biggest mobile operators have started separating out handset costs: O2, Giffgaff, Tesco and Virgin.
Billions wasted on the wrong contract
Mobile customers are already overpaying to the tune of £5.4bn a year, because 72% of those on a contract are on the wrong tariff, wasting an average of £159 each a year. It can’t be beyond companies’ wits to help their customers find the right one. It’s time this industry filled in the information holes that are costing its customers dear. You can help by joining our campaign calling on all mobile providers to unlock better deals for customers.
Do you agree that the cost of your mobile phone handset should be split from all service charges?