Mobile charges on the up

Published:
21 August 2008
Topic:
News,Mobile Phones

There are few reprieves for the financially hard-pressed at the moment as they are hit by price increases from almost every angle. Even with mortgage rates and petrol prices falling slightly from their peak, consumers are still bearing the brunt of rising energy prices and loan rates - and now, even the mobile phone providers are getting in on the act.

Vodafone will be increasing its minimum call charges by 25% for contract customers beginning on September 1. The minimum price of calls not covered by a monthly contract will leap from 12p to 15p and covers calls to landlines, mobiles, international numbers and national call rates. In addition, Vodafone is also increasing the cost of calling some premium numbers by 25% - with the price of calling a 0871 number leaping by 40% to 35p a minute. Calls to all 08 numbers will leap by at least 30%.

The company has come in for criticism from the National Consumer Council for failing to explicitly alert customers of the price increases when it provided a new price list in July's bills. However, the firm, which has 18.4million customers, is not alone in implementing price increases.

O2, T-Mobile and Vodafone pay-as-you-go (PAYG) customers are all facing increases in connection charges - with some fees doubling from 10p to 20p. T-Mobile, for example, has replaced the 10p charge on three of its PAYG deals with a one-minute minimum call charge. Only ASDA has bucked the trend by reducing PAYG call costs.

Why are prices going up?

While increasing the minimum connection charge on some of its tariffs O2 also reduced the cost of sending data while abroad and made it cheaper to send text messages back to the UK. This has led some industry analysts to suggest the moves from T-Mobile, O2 and Vodafone are retaliation to European Union (EU) telecoms commissioner Viviane Reding's ruling that mobile operators must reduce their mobile termination rates.

Termination rates are the charges mobile phone operators make for connecting calls to each other's networks. These have been capped until 2010. Earlier this year, the European Competitive Telecommunications Association (Ecta) described the rates as excessive and discriminatory claiming they had wasted around £79bn of consumers' cash over the last decade.

The EU then demanded that roaming rates be cut by as much as 70%. By the end of this month, Eurotariffs must be introduced with which mobile phone networks must charge no more than 46 cents to make a call and 24 cents to receive one. There have also been calls for more transparency over roaming charges with customers now receiving a text message as soon as they cross borders to inform them of the price they will pay for making and receiving calls.

Roaming rates had previously been used to subsidise domestic calls, but providers having been forced to slash these costs, appear to be looking elsewhere to recoup the lost revenue. A rise in the cost of connecting to non-geographic numbers such as 0800 and 0845 has also been blamed for the increases.

What can consumers do?

Ironically, in its letter to customers outlining price changes, Vodafone plays down their significance and states: "These small changes shouldn't affect you much, so there's nothing for you to do."

Of course there is plenty that consumers can do - and the key is to make sure you're on the right tariff.

The minimum call charges only affect customers who don't have sufficient minutes to cover their calls each month. Consequently, this news should be the spur customers need to become proactive and check their monthly usage to ensure they are on the correct tariff for their needs.

There's no point in signing up for a tariff with hundreds of call minutes and texts that you simply won't use - after all, the more minutes and texts are included in your package, the more you will pay. So take a close look at how many minutes and texts you're using and find a tariff with our mobile phone comparison tool that closely resembles your needs.

When shopping around don't just think about which deal looks the best - think about which deal is most suitable for you, based on your phone habits. For example, are you a 'talker' (someone who uses a large number of voice minutes each month) or a 'texter' (someone who uses a large number of text messages each month)? Here are some examples of the deals you may wish to consider:

·         Best for talkers: With the 3-Mobile mix and match 900 tariff, which allows you to pick either 900 anytime minutes or texts, you can pick up a free Nokia N95 8Gigabyte (GB) on an 18month contract for just £33 a month. The N95 8GB is described as 'what computers have become' with built-in GPS, a large screen, a five-megapixel camera and a stereo FM radio.

·         Best for texters: The LG KF700 features touch-screen technology, a sleek slim shape, an array of menu items accessible with just a spin of the dial, a real music player and a three-megapixel camera. It can be yours as part of the O2 Online 35 package with 1,000 texts and 600 minutes for just £35 a month on an 18month contract. 

·         For talkers and texters: The Samsung Soul (U900) comes as part of the T-Mobile Combi 30 package with 700 minutes and unlimited texts for just £30 a month on an 18month contract. The handset features a five-megapixel camera and the ability to support download speeds up to 7.2 megabits per second.

Remember to think about all the possible charges when using your phone. For example, if you like to send data or make downloads on your phone look into each network's rates. Also consider roaming charges if you regularly travel abroad - Orange has recently changed its travel plans with a 25p roaming rate now available to some of its users. Our international roaming guide will point you in the right

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