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Mobile regulator Ofcom is looking into the difficult issue of mid-contract mobile price rises, putting forward the idea that customers might soon be able to walk away from a long term deal if the price goes up.
Currently, mobile phone contract small print lets networks increase prices by a level matching inflation — and there’s nothing customers can do about it. This new move would adjust the standard terms, allowing users to “withdraw from a contract without penalty” should the monthly price change in any way.
It wouldn’t stop networks from lifting their charges in line with inflation if they decide to do so, but it would let customers quit their contracts in a sulky rage when it happens. Which might also be a useful way of getting out of a crappy deal. [Ofcom]
Lets hope common sense prevails!
I’m guessing that there is a clause where you need to send the phone back if your not at least half way into your contract or else people will get high contracts on amazing phones just before the rise and then quit when it comes into effect.
If common sense prevailed people wouldn’t be getting their knickers in a twist about paying £10 more each year (assuming a £30/month contract).
The point people are making is that they signed up for a set price of so much a month for so many month, a feel cheated when that price goes up. It’s a faire assumption to make that if you sign in to a £30/month crontract for 24 months, that is what you will pay for those 24 months.
Yes, anyone signing any sort of contract should read it first, and yes it’s the person’s fault for not doing so, but sometimes the users need protecting from themselves, and that is what OFCOM is for.
But to be honest, any sort of long term rolling contract is stupid. Get a giff gaff sim or any other monthly rolling contract. And if you desperatly need a shiny new phone, buy it outright or get yourself a nice little interest free credit card and repay it over a year.
(ps: “you” not as in “you” but as in “anyone”, wanted to clear that up before anyone thinks i’m aiming this at them personally).
Just took out a contract on O2 to be told days later that the price is going up. Its going up by very little and i have no problem paying it, but i do agree that if you sign a contract for say £35 a month for 24 months, that is all you should pay.
Doesn’t this just incentivise phone companies to increase the upfront costs of their contracts to take into account any potential rise in inflation?
Nice work Ofcom.
Then go to a different network who arent charging as much. At that point you arent tied in.
You misunderstand the economics of it. If Ofcom’s proposals come into effect all contracts will go up in price since no company will want in increase prices mid-contract for fear of increasing churn.
About time.
Gawd awful 24 month contracts when a phones life is less than 3 weeks.
Saying that, these toothless Governmental departments were also going to look into the pub cartels, the Premiership con, energy prices, petrol prices etc… So I wouldn’t hold your breath in anything happening before the next mayan apocalypse to be honest.
If you think a 24 month contract is too long don’t enter into one! All networks have 12 month contracts for your consideration.
most of them don’t unless you actually ring and ask for it, and for the 12 month option, it’s usually a hell of a lot more expensive!
Then phone up and ask for it! It may be more expensive but what did you expect when you’re asking your network to subside a new phone every 12 months?
My contract is up, and I want a 4g phone.
Shall I ring up EE and ask them to reduce their prices? Do you reckon they will? Do you reckon my loyalty mean anything?
Or shall I ring up a competitor for a 4g phone… Backthefunbusupaminute!!! THERE AREN’T ANY!!! And not likely to be for another 6 months.
Where are Ofcom protecting the consuming here from the EE monopoly?
As for subsidies – I don’t get a new phone every 12 months. Never have done. But I STILL end up paying towards something half decent. Like most companies their more interested in NEW customers not RETAINING customers.
This word “monopoly” – I do not think it means what you think it means.
Ofcom’s mandate is to preserve competition in the market and EE has done nothing to prevent competition to entering the 4G market, it’s just started offering it first through clever use of its existing spectrum.
Racal offered the first cellular telephone service in the UK. Are you suggesting that Oftel should have prevented them from operating as there was no immediate competition?
As for new/existing customers, churn is one of the biggest problems operators have and is the reason that they want to tie people into longer contracts. If you want to get a better deal when your contract comes up for renewal just ask for your PAC and see how their offer magically improves…
My experience with mobile phone company?
“Hi! My contract is up and has been for 6 or so months! On your web site you’ve got the Xperian X10 for £99. What can you offer me?”
“Sure Sir! We can offer you that phone for £150!”
“Wait a minute? But I’m a customer and have been for over 10 years!!!”
“Sorry Sir… New customers only!”
“OK, cancel my contract!”
“Fine Sir!”
And so I left…
As for ‘monopoly’ – Per Google definition: The exclusive possession or control of the supply or trade in a commodity or service.
EE have sole rights (as I type) of the 4g network (service) hence a ‘monopoly’. So I stand by comment.
As for Oftel/Ofcom – I’m not saying anything. But I believe Vodafone attacked their decision to allow it.
http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/9489528/Vodafone-attacks-Ofcom-decision-to-give-Everything-Everywhere-head-start-on-4G.html
As for churn – totally agreed with you. I’m well aware of new/existing deals and the way people get better deals by threatening to leave – To be honest, it’s done to the representative you speak to.
EE have a short-term monopoly but that exists for every new product and service. Your argument is that Ofcom should have done something to prevent it but what, exactly? Forced them to price contracts at a level that meets with your satisfaction? Prevented them from offering their services until rival operators were ready to do so?
As for Vodafone, of course they had a whine at the regulators. EE had stolen a march on them and there was (virtually) zero cost to getting the regulator involved and the potential upside that they’d torpoedo EE’s plans.
No, my OP was an ironical remark about Ofcom (et al) being toothless and not doing anything. As they haven’t before. And not likely to either now. (Here’s hoping I’m wrong!!)
They are there to protect the consumer and (you obviously do not agree with me) a monopoly of a service, which EE have at this moment, is not (imho) in the customers best interests.
This is the crux of the matter, for me at least.
As to the what should have happened to prevent it? I’m not in a position to say.
And my satisfaction? – To be brutally honest I’d be happy to get 3g signal nevermind 4g!
“I’m not in a position to say”? You’re the fucking consumer! If you can’t articulate how you expect your “champion” (in the form of Ofcom) to behave then you might as well just shut your gob.
The entire premise of your argument is “EE is charging more for 4G than I’m prepared to pay”. Well boo-fucking-hoo. You have no more right to 4G than you do to gigabit broadband or a chauffeur-driven limo to work each morning. If you want it, you’ve got to pay for it.
I’ve tried to be polite thus far but you’re the sort of idiot that has me wishing for a pandemic.
I was being being polite as well and tone down my answers to your questions.
If you spent less time in asking these questions and reading said responses you might glean the necessary information to make the apporpriate comments.
And fuck you for refering to me as an idiot.
But wouldn’t the customer have to pay the remainder of the contract?
In a lump sum when they decide to leave?
The idea here is that the clause allowing a mid term price rise is unfair on the consumer and that the consumer should not lose out.
This would offer an exit to the consumer without a termination fee, however I would expect any equipment to have to be returned or charged for. so for example on a standard 24 month contract at £30 a month with a handset value originally at £450, if the operator put the price up after 12 months and you wanted to leave you would not be liable for the remaining 12 months rental, but would have to return the handset, half of which you had paid for, or buy the other half.
what I meant to go on to say was that instead of a termination fee of approx £360 you could walk away paying about £225 for the handset…hence the otherwise pointless example figures
Makes sense, ta.
I’m 7 months into my contract and am already regretting it. This get out clause can’t come quick enough.
I think they should have a rule suggesting that if the phone company increase their prices by more than 30p of the agreed price when bought, the person should be able to cancel in such case.