Oh no it's only a £1... doesn't really sit well with me. If it is really only a £1, why does a multi national company with year on year profit increases need to charge an extra £1 mid term?
T-Mobile / Orange Contract Price Increases
- Thread starter TheLegendOfMart
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Oh no it's only a £1... doesn't really sit well with me. If it is really only a £1, why does a multi national company with year on year profit increases need to charge an extra £1 mid term?
Because it may "only be £1" to you and me but it results in nearly £52 Million to them...
http://www.guardian.co.uk/money/2013/mar/01/orange-t-mobile-price-increase
http://www.guardian.co.uk/money/2013/mar/01/orange-t-mobile-price-increase
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Sorry but this is rubbish. Move with the times? And who moved us from 12 month contracts to 18 and 24 month contracts? Oh yes - the networks themselves. Consumers don't *want* 24 month contracts, they now face little choice unless they want to pay a fortune for a 12 month contract. The fact that most contract minimum terms are now twice what they used to be is entirely the networks making - they want that because they want you locked in to an airtime contract for 2 years.
High end handsets are no more expensive than they ever were. My first high end handset, a Nokia 7110, was circa £450 SIM free when I purchased it in 2000. About the same price as a Galaxy S III today. In real terms, it's cheaper! 24 month contracts were not 'necessary' they were 'desired' and once they had the consumer hooked on them by offering tasty deals it was simplicity itself to more or less kill off the 12 month contract.
That's what happens when you sign a contract - you've agreed to be locked in to that contract and pay the agreed monthly rate for a minimum of 24 months. You can't decide to pay a bit less when your household bills rise. You can't pay a bit less if you are skint one month. You've signed a 24 month contract - only it's a 24 month contract which allows the other party benefits is does not afford you.
They don't 'lose money' if they don't increase line rental in-line with inflation. This is a fairly recent thing, its true the contracts have always contained this clause but it was invoked reasonably rarely until recent years. For a start inflation is actually measured by the CPI and not the RPI, yet it is the RPI the contracts allow the networks to increase price by (Because, obviously, the RPI is usually higher). RPI is RETAIL price index. It is not a measure of the increased costs a mobile phone network faces in providing a service. Infact its arguable that the level of inflation they've 'suffered' has been far lower -the typical costs a mobile operator will face have potentially not seen significant increases at all. Wages will be a huge cost to the organisation -have employees at T-Mobile for example been receiving regular inflationary pay increases? I bet not! Infact like most people I bet they've seen almost no wage increase at all.
The most ironic thing here is that communication bills are included in the RPI calculation therefore by increasing prices inline with RPI they are contributing to ensuring that the RPI figure remains high, meaning it can then be increased again. In a way, your mobile phone bill increases because the cost of mobile phone bills has increased. How good does THAT sound?
The reason why contracts are now increasing by RPI as often as possible is simple - it's not 'unavoidable' due to 'rising costs', it's simply because they can. The floodgates are open, every year now despite what you've signed you will now see a price increase of RPI. The fact they've even managed to find a way of charging EXTRA to 'fix the price' when that's exactly what the point in signing a contract was in the first place is even more beautiful on the part of the operators. Pure genius.
You are correct in that it's the 'capitalist way', but only partly. The 'capitalist way' would have course be to increase it even more - its only the fact that legislation prevents this happening that they don't.
It's therefore about time legislation made sure that the figure you sign for is the figure you are charged. No buts. Don't like that? Don't offer consumers contracts that give them no choice about how much they pay but you loads of choice about how much you charge them.
[TW]Fox;23870921 said:
What, like fixed mortgages and energy costs? Those have been around for ages and shown to work, why should we not expect other industries to follow suit?
Yes it sucks for us consumers, but given my mobile is the smallest of all my outgoings (and certainly not as needed as food/energy/etc), I can learn to live with it. I'm just thankful that we don't follow the god-awful model they use in the USA.
[TW]Fox;23870921 said:
I totally agree that is how it should be, unfortunately it is not problem is non of this is actually explained when you sign the contract. The easy answer is to vote with your feet, im walking asap going over to giff gaff one fee per month no contract or messing about, with the price of the current and possible nexus phones to be in a contract is for mugs anyway
No, because you can cancel your energy supplier and move to somebody else if you are unhappy with the price rises. Thats the difference. You and the mobile network have a contract with a minimum term. You agree, up front, what the cost is. They offer you X price, you offer them Y months of commitment in return. You've ALREADY committed to the fixed price!
If you want to run a model of variable pricing you can increase whenever, then dump the minimum term. Otherwise its technically anti competitive isnt it? Tempt consumer in with X price, lock them in, then change it to Y price knowing they cannot cancel and move elsewhere.
Highly depends - if you can afford to buy a high end phone solo then great but otherwise simO sells poorly for this reason (the other being for the majority of contracts it's cheaper to get a subsidised handset).
While I am not happy with these rises, there are a few things missing in the picture presented. These are not a defence and I do not put them up as such, it's just for a more complete picture.
Handsets actually did go up in cost, it's more complicated than retail pricing. The problem with handsets was buying them in part, the networks had to start paying more for them from the manus as they were not willing to give the huge big bulk discounts that Nokia did for years on mass volume. Apple made life difficult in this respect especially. The other issue was fixing them, average cost of repair is up now as the biggest fix is the screen which raised the average. While you may suggest that this is a manu problem, the cost of fixing isn't done through a standard model here, the network takes some of the problem. Repairs were actually cheap compared to do today, a lot more cost has been put into this area.
The rise of network version increment. Back in the ol' days progress was a lot slower. Rollout for 3G took years and while a fairly big change, sorted life for a long time (comparatively). HSDPA then came along, then HSPA+, then 4G etc.. it's been a fairly busy set of years for networks and at each stage came a new cost. Without getting into incremental costs, HSPA+ requires a really decent network link only a few years after it was upgraded to HSDPA. The cost of the links was an issue (which is now why Voda bought C&W, O2 has Be Backhaul/Sky backhaul, EE/3 have MBNL and the BT backhaul contract) as was buying equipment from NSN/Ericsson every 2 years. Anyway - they knew it was coming
SAC costs also went up but nothing outside of inflation. Networks just got more competitive for the high ground where the profit was better.
24 Month contracts were born out of the increasing costs (mostly handsets - people started to renew their deals a LOT more often as tech improved instead of holding onto old faithfuls past contract expiry) and coming close to break even on 12M deals. There was also some pretty amusing deals back in the old day that they needed to sink - Orange everyday 60 was crippling to Orange for years for example.
That said - a lot of things became cheaper to balance this out like site sharing, cost of bw drops over time, less calls into call centres as people use the internet to view bills etc...
Soldato
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Yes, I was on the £6 plan, didn't know there were others. Anyway, thought I'd give you a follow up Myshra: dialled 150 today, opt 1, opt 1 (I think), spoke to an Indian guy. Very helpful and easy to understand and he cancelled it there and then, no questions at all
I got the letter about Orange Care going up in price the other day, same day I phone up and cancelled it. Today I get another letter saying my contract will be going up by £0.86, pretty frustrating. Not so much the price but it's the second increase during my contract.
I'll certainly be leaving Orange as soon as I can.
I'll certainly be leaving Orange as soon as I can.
For those considering it, home insurance will usually do personal contents cover for a really small premium (obvious varies if you have watches or other personal affects but it's a lot cheaper than handset cover).
It's a bit of a shame they went for twice in 2 years, the backlash has been pretty big this time around (made internal news at my hq at least) so I'm no sure the other networks will follow with this.
It's a bit of a shame they went for twice in 2 years, the backlash has been pretty big this time around (made internal news at my hq at least) so I'm no sure the other networks will follow with this.
Soldato
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o2 have a date already saw the comms last week, voda not due for a while i belive. How goes things on the dark side myshra?
Working on next gen unified comms products to sell to businesses (http://en.wikipedia.org/wiki/Unified_communications) with a worrying about verizon buying us out / us selling our stake . On the plus side I get to try some really cutting edge stuff but it isn't really consumer friendly currently. My answer phone woke me at 2am last night.
Am genuinely surprised o2 would do this but I think we all know how badly telefonica are doing :/
. On the plus side I get to try some really cutting edge stuff but it isn't really consumer friendly currently. My answer phone woke me at 2am last night. Am genuinely surprised o2 would do this but I think we all know how badly telefonica are doing :/
If their costs really have gone up noticeably then you would think they would have budgeted for that in the first place. Example, you're selling a 24 month contract at £20 per month but you estimate that your running costs are going to be higher in the future therefore you decide to price it at £22 per month instead. Or you could even factor it into the upfront handset cost.
Another thing I don't understand is; why don't they just put the price up on new contracts and hit existing customers when they come to upgrade?
Perhaps I'm looking at it too simplistically.
Another thing I don't understand is; why don't they just put the price up on new contracts and hit existing customers when they come to upgrade?
Perhaps I'm looking at it too simplistically.
In the past the upgrades had a grace period equal to the last progressive increase (so typically the price went up 30p per month in say, Jan and then they revealed "all before Jan are affected") but this time they actually scrapped this and said instead those people have 6 months off only.
I guess EE customers didn't get the rise because they get less for more anyway
Disgusting. Second price rise in my 24 month contract!
i will not be having another Orange contract.
As Fox says, this used to be un-heard of (when I worked at CPW several years ago).
Then to add insult to injury they say "oh pay us more and we'll fix your tariff!" WTF?
i will not be having another Orange contract.
As Fox says, this used to be un-heard of (when I worked at CPW several years ago).
Then to add insult to injury they say "oh pay us more and we'll fix your tariff!" WTF?