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Mobile upgrades

ahnlak posted earlier this evening to describe his experiences at the hands of T-Mobile customer services, specifically their refusal to let him upgrade his current phone to the G-1.

I'm not that surprised by this, sadly.

ias and I moved from Orange contract to T-Mobile PAYG earlier this year, mainly because we weren't using all of our contract allowance, and we wanted something rather cheaper than Talk 50.

A few years ago, we moved from our previous tariffs - the lovely-for-us (but not so great for Orange) Everyday 50 - to Talk 50 in order to upgrade to tri-band handsets. At that time, we were assured that our monthly bills would remain the same, but it was hard to verify this claim, and it proved not to be the case (whether this could be considered a case of mis-selling is another matter entirely). Since then, Orange's tariffs have become progressively more complex and opaque, to the point where it's now quite hard to predict a) how much you're going to be paying each month and b) whether your tariff is the cheapest. I suspect that we would have been offered free upgrades from our current handsets had we asked for them, but only if we'd agreed to move to an even more expensive contract.

As I see it, the mobile phone market has moved a long way since the late 90s. At that time, the market was rapidly expanding and all the mobile operators offered hefty incentives, some explicit (tariffs with plenty of 'free' phone calls), some implicit (such as willingness to offer subsidised upgrades in order to retain customers) in order to persuade potential customers that they needed to get a mobile phone and maintain market share. In 2008, we must be pretty close to market saturation in the UK; nearly everyone who wants a mobile has one, so the only way to get new customers is by poaching them from your competitors (while they're doing the same to you). Offering subsidised upgrades is no longer as cost-effective at increasing market share as it once was.

When you do the maths on handset subsidies for new contracts, the situation is heavily biased in the phone operators' favour: TANSTAAFL, in other words. If you look at the cost of buying a handset outright (particularly a premium handset) versus the amortised costs over the lifetime of the contract, it's almost certainly the case that only a fool would accept a deal for a 'free' handset that costs more than the handset alone would. The rules on upgrades must be similar to those for new contracts; unless you're spending significantly more money each month than is necessary for your level of service (the cynic's definition of a 'good customer'), you're not going to be offered a new handset.

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That's one of the reasons I went to a SIM only tariff. £15 a month instead of £25, and I'm not fussed about upgrades until my current phone dies - and by then I'll have saved enough to pay for the handset anyway.

For the amount I use my phone, SIM only loses to PAYG.

Before we started living together (which was after we got married, but that's another story), ias and I spent 30-45 minutes on the phone each night. Nowadays, we can ignore each other from the comfort of the same sofa ;)

I just bought myself a brand new handset and not from a telco, so it would be unlocked, free of hassle (many payg phones I've unlocked have been ok but one recent bricking-itself experience has left me annoyed), no 3rd party firmware, etc.

Currently on PAYG Orange and have been for a couple of years... the only reason I'm tempted to go (sim only) contract is for data rates that don't ream me. If I could get PAYG voice with the data contract style they do for USB wireless broadband devices I'd be much happier.

after 7 years with o2 and wondering if i could something better, they gave me quite a good deal earlier in the year - they reduced my line rental and made nearly all my texts/calls included in that, as well as offering me a new handset or a 150 rebate. i took the latter.

Your reasoning re current state of market is interesting, esp given my recent laborious eforts to get away from orange which ended upo in my being sucked back by the offer of tice as much free time, and texts, plus unlimited dat - but i SZTILL had to pay £99 for ahandset whoch allegedly cost 3 times that much, i admit. One assumes tat for large mobile operators real cost of offering more free time etc is nil, but handsets cost real money - so that now makes more sense to me.

Also interestingly I am indeed a sadly "good customer" in that I always ended up paying for shedloas of data downloaded overseas - but when i finally got through to retentions, they also emphasised that I paid up regularly, unlike many high (over) spending customers.

Yes, I think that the cost of providing the service is relatively small; the mobile network operators are probably still paying for the kit, but the network infrastructure has now been rolled out everywhere that it's likely to go. Termination rates are an issue, but I suspect that this is either a zero-sum game, or one that's weighted slightly in the favour of the mobile operators.

Also consider the pricing of SMS; there's no reason why sending 140 bytes should commonly cost as much as 10p (other than "that's what the market will bear").

Given that in the UK, the number of text messages sent grows year on year by 40%, (57 billion messages last year - projected to 80 billion this year*), you'd think the price would come down. The market could easily bear dropping the price to 6p a message.

(that's 2.8 MBits/s)

Indeed. I pay about GBP180 pa for my broadband connection, which runs faster than 2Mbit/s. Even at 6p a message, 8E10 messages would cost about GBP5 billion to send.

I was on an Orange business contract, and wanted an iPhone. I bought a PAYG one - £399 outright, but saving me £27 per month in contract charges. I barely use it as a phone .. have got through £3's worth of calls in two months.

But I can see the operator's point of view - I think it would be a much more honest market if phones weren't subsidised.

Hmmm. Where were you able to buy a PAYG iPhone - I thought that they were all on contract with O2?

O2 started doing PAYG iPhones in September. The price includes 1 year's 3G, and thereafter it will be £10 per month.

You can get them from O2 shops or Carphone Warehouses. I ported my number in from Orange with no problem.

The masses are scared off by up-front costs and it slows uptake. It worked for games consoles, it worked for mobile phones and it's currently the biggest woe in printers. It's near impossible to break the market out of that mindset once the masses have adopted it though, especially when you need to wean off enough people to make your own honest pricing scheme benefit from the same economies of scale.

the hatter

It's all about confusion

It's in the operators' best interests to have you confused over the complexity of their tariff. If it was obvious what you were getting, you'd go for the package that suited you best. Make it too complex to follow (let alone to compare in any like-for-like way with the other operators' tariffs), and there's a good chance that you'll buy something that's over-specced for your needs.

I suspect that they also look at what people want in their contract, and deliberately construct the tariffs so that they don't fit those usage patterns. This is exactly the same thing that Sky does: the only thing they could really sell on its own would be a package of the sports channels. They know this, so ensure that to get the sports channels, you have to buy the most expensive package -- thus pushing up the subscriber numbers on the less-watched channels.

If you really want an exercise in opacity, try working out the details for data rates on mobile phones (and what you can do with the resulting IP connection once you're paying for it).


I moved to Voda because they let me construct something that was vaguely similar to one of their deals, and I could keep my old handset, reducing the rate from 20 quid a month with new, not terribly swishy handset to about 7 quid a month with oldphone. I saved about 234 quid that way, which is quite enough to have paid for quite a swishy handset.

Mind you, I make phone salespeople sad by going in and asking which handsets are available on my deal for free, then picking one of those. And I ask them to switch off the data option so they can't accidentally charge me for data I didn't use. Orange did this by having a one-click connection button on the edge of the phone so that if you failed to lock it, you nearly always got charged. They tried to put me off by 'accidentally' switching Alex's data connection off instead (we were on their joint deal at that point), but we persisted.

Orange also stiffed me on the unlocking when I switched (insisted on charging me for unlocking, though I had only asked what they charged, not told them to do it to my phone), and were otherwise obstructive (cut my line some days before they said they would etc). It took the iPhone for Alex to leave them, despite this.


Simpler way to choose a mobile Telco

Here's a startup who do mobile phone contract recommendation based on ACTUAL data.
They can also crawl your online bills to determine what you actually use.
The service is still in alpha, but they're probably still looking for test subjects, and mac is an ECS grad ;)

Re: Simpler way to choose a mobile Telco

Thanks, anonymous commenter. That looks like an interesting service.

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