Archive for the ‘price hikes’ tag
Vodafone follows Three UK in their commitment to not impose price hikes during the contract, which is in line with the ruling announced by Ofcom.
Initially the response to Ofcom decision to condemn mid-term price hikes wasn’t the most positive among operators. Some of them opposed it or tried to look for some loopholes to go around it and retain the ability to increase contract tariff costs in the middle of the contract. One of the operators, however, promised to keep a fixed price during the duration of the contract and it was Three UK. Now another operator, Vodafone, decides not to impose any price hikes mid-contract.
The Red mobile provider guaranteed all their customers (not only those that joined after January 23) that the price for monthly allowance won’t be changed, so you know that you will pay the same amount of money throughout the whole length of contract. While this is great news for Vodafone’s users they should remember that the operator highlighted that it may tweak with premium, non-geographical rates as well as cost of data/texts outside the allowance. This means that as a contract customer you should be wary of any changes to rates as long as call non-standard lines or often exceed the allowance, even though Vodafone promised to inform everyone about such changes beforehand.
Vodafone UK officials explained why they made such a promise firstly by revealing that they have asked their customers how they feel about mid-contract price hikes and secondly because they want to show their transparency and fairness. In reality the reasons behind it are not as important as the result of it.
We hope that other operators will take the example of Three UK and Vodafone UK and stop increasing prices of contracts in the middle of it. Obviously such price changes may discourage people from signing a contract and drive people towards simple PAYG SIM card solutions.
The telecommunications watchdog has proposed a significant increase of license fees paid by main operators for using 900 MHz and 1800 Mhz spectrum.
was directed by the Government to revise the licence fees for some spectrum back in December 2010. Now, it is finally trying to fulfil the task and came out with a proposal to quadruple some fees. The figures they prepared were based on calculation which compared foreign markets and 4G auction in the UK. According to them, the total annual licence fees for 900 MHz and 1800 MHz would increase from £15.6m to £83.1m for O2 and Vodafone. EE would be hit the worst as they would pay £107.1m instead of £24.9m now. Hutchinson 3G would be the last operator affected and in their case the hike would be from £8.3m to £35.7m per year.
All of the affected operators expressed their deepest concerns about such a tremendous increase especially now when all of them invest heavily into extending and upgrading the national network and providing 4G mobile coverage.
Unfortunately, such an increase in license fees will more than likely affect the customers too. As it is usual in such cases all the extra expenses are passed down and will be reflected in price changes. If this proposal becomes reality, we will expect the operators to try to squeeze that money from customers. In the best case scenario, the providers will not introduce some price hikes but instead they will limit investment in 4G roll-out and thus the time for everyone to have 4G mobile coverage will be longer.
Ofcom announced that right now they are in consultation mode which will close on December 19, 2013 after which they will make a decision as the plan is to enforce new fees from 2014.
Vodafone UK has informed its customers that the PAYG SIM card pricing by the second will be changed from August 2013.
Changes to Vodafone. The mobile operator claimed that charging its customers by the second only created confusion. In order to fix this complicated system Vodafone announced that PAYG SIM card users will be charged per minute from August 1, 2013. While some other operators also charge per minute (for example, Orange will always charge you at least for one minute no matter how long you talk and afterwards per second), the most controversial change is no rounding down of minutes. It means that it doesn’t matter if you called somebody for 62 seconds or 118 seconds, as in both cases you will pay for 2 minutes. Some angry customers calculated that in reality this change means that rates are going up by even 92% in cases like mentioned above .
This amendment only pertains calls to UK landlines and mobile (incl. Channel Islands and Isle of Man), international calls and voicemail made by Vodafone PAYG SIM card customers.
Officially the company says that this action will simplify the life of their customers. However, many customers are disillusioned as they see this move as a hidden price hike. If the outrage continues, the operator might alter the new rules and at least start rounding down the calls. Do you think that Vodafone’s move will lead to losing some customers and drop in revenues? Write what you think in the comment section.
As of today T-Mobile has introduced new rates for their pay as you go SIM cards in across its most popular PAYG plans.
T-Mobile has been informing about the scheduled price hike for some time now and from today, that is the 17th of June, new prices become effective. The mobile operator increased the rates of Everyday, Text and Talk plans. In Everyday plan, T-Mobile has decided to increase call and voicemail rates from 30p per minute to 35p, while sending text messages rose from 12p to 14p. The only change in the Text plan is a higher rate for texts. PAYG SIM card customers on Text plan from now on will pay 12p per text message not 10p. The last change pertains to the Talk plan in which customers will have to pay 30p per minute not 25p.
The price changes are in most cases around 16%. This looks really worrying especially that people are used to seeing PAYG rates dropping not going up. Thankfully, both Blackberry and International plans have not been affected by the price hike.
Interestingly, T-Mobile PAYG SIM card users experienced the same change a year ago. T-Mobile increased most of its pay as you go call rates by 5p in July 2012 too.
You will find the full price plan that is effective as of 17 June 2013 at the official T-Mobile website: http://bit.ly/13UXyuO
In its recent statement Three claimed that mid-contract price rises are a “threat to transparency” and deprive customers of making an informed choice so something needs to be done to end this. Mid-contract price rises pose a threat to the competitiveness of the UK mobile industry thus in Three’s opinion Ofcom should protect customers from them. During eight months Ofcom received 1,644 complaints concerning the issue and therefore, it interviewed UK operators and stakeholders seeking for ideas to heal the situation on British mobile market. Wanting to protect customers against unexpected changes to landline, broadband and mobile prices it suggested that clients should have a right to exit contracts without any penalties. These suggestions triggered mixed reactions, and for example Vodafone said that such a move would result in harassing users with spam texts alerting to all tariff changes.
Three also noticed that “one aspect of Ofcom’s preferred approach puts this goal at risk. Some of the wholesale charges operators must pay, typically for out of bundle services such as premium or directory enquiries, can vary wildly. Having to fix a price for two years for these would result in higher consumer prices all round.” It rises a question whether Ofcom’s approach will change current situation in the UK mobile industry.
Rise contract tariff. Due to rising costs and inflation, as EE explains, Orange and T-Mobile customers should be prepared to 3.3% increase to their contract costs. Thus, the average bill will increase 70p per month. However, the operators have created opportunity – price fixing service – to avoid any future price rise for the duration of the contract by paying additional fees according to customers’ monthly plans. The costs will be:
– 50p for those paying below £14.99 monthly,
– £1 for those paying between £15 and £24.99 monthly,
– £1.50 for those paying between £25 and £34.99 monthly,
– £2 for those paying over £35.
The price rise will only affect those on 3G plans whereas those on 4G plans have nothing to worry about. For Orange customers, changes are said to start on April 10th and for T-Mobile customers on May 9th. New customers who joined Orange after 2 December and T-Mobile after 22 January have six-month grace period.
A spokesperson for EE said: ‘As a result of rising business costs, we are having to increase the price of some Orange and T-Mobile monthly plans. Typically the increase will be 70p a month – about the cost of a can of baked beans. At the same time, we have listened to our customers and understand that some would like the option of fixing the price of their monthly plan. That’s why we are also launching a “Fix Your Monthly Plan” option – the first of its kind in the industry. We know prices rises are never great news, but we always aim to offer great value to our customers as well as the best service on the UK’s biggest network.’
Last year brought about some mid-contract price increases for customers of most main mobile operators in the UK. Angry customers wanted to exit contracts due to such raises, however operators argued that they cannot do it without paying penalties. Mobile operators defend their ruling claiming that according to contracts they are allowed to introduce raises that are in line with inflation. But consumers didn’t stop and instead lodged over 1,500 complaints to Ofcom about the problem of price hikes.
Claudio Pollack, Ofcom’s consumer group director, said: ‘Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts. ‘Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.’ As Mr. Pollack said Ofcom started a consultation with mobile operators about mid-contract price rises. Ofcom’s proposal is to allow customers to cancel contracts if a mid-contract price hike is introduced and to clearly inform them that such price hikes may occur. There are also three other options that are taken into consideration, one of which is to not change anything and leave it as it is.
Currently Ofcom is iniviting other interested parties to share their ideas and express their views on proposed options. The watchdog plans to close consultations on March 14, 2013.
O2 has informed its customers that it will increase their monthly payments by 3.2% starting from Feb 28, 2013 contract customers. Price of calls, texts and data will not be increased, which means that PAYG SIM cards will not be affected. Increase of such value means that a contract customer that now pays £20 will have to pay £20.64. Similarly, £30 contracts will be soon £30.96 ones. The mobile operator argumentation supporting this price hike is that it needs to adjust it prices to the inflation. O2 spokesperson defends this change by underlying how the competition introduced such price hikes before them and how small the increase is by saying ‘At a time when our competitors have been raising the prices of their tariffs, we’ve resisted. But as external costs continue to rise, we can’t keep our pay monthly prices at the current level. For over half of our pay monthly customers this will mean an increase on their bill of up to 58 pence per month.’
Price hikes have angered customers of all mobile operators and they were keen to express their disappointment. Nevertheless, that’s all they can do as most of contracts have a clause in Terms and Conditions that allows providers to adjust their price with the inflation mid-contract. Thus none of the customers can get out of the contract using price increase as a reason.
Ofcom has decided to address price hikes in fixed contracts after receiving a considerable amount of consumer complaints. In the last twelve months consumers have experienced mid-contract changes to mostly resulted in them paying more monthly, although, they have signed a fixed contract. People are frustrated as they thought the contracts they have signed are fixed, same as tariffs and rates they agreed on. If you use PAYG SIM cards, you know that such things may happen(even though they usually don’t), but the solution is to simply move your number to another provider. However, due to terms and conditions of most contracts, pay monthly customers cannot cancel their contracts without paying the penalty if the reason is a price hike.
Between September 2011 and May 2011, Ofcom received 1,644 complaints that pertained mid-contract terms and conditions changes. This led the watchdog to examine the issue and “find out ways to address consumer concerns and ensure they are being treated fairly”. Consumers main problem is that mobile operators are allowed to enforce price increases in the middle of contract and such changes do not allow consumers to leave contracts without penalties. Ofcom wants to investigate whether it is appropriate and check the issue of transparent price variation terms as well as the question whether consumers are properly informed about that at points of sale.
Results of Ofcom’s consultations, which will also include broadband and landline services, should be published by the end of the year. Hopefully, this will lead to some changes that will make such terms more explicit and customers will be fully aware what terms and conditions might be changed in the contracts they sign.