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Ofcom’s welcome decision to look at mid-contract mobile cancellations hasn’t gone down very well with Vodafone, which claims “millions of people” might end up paying more for their phones to the detriment of the UK mobile market.
Vodafone seems to be switching the blame for any price rises to its suppliers, claiming that cost increases from the likes of BT would either need to be swallowed by the networks or passed on to consumers in the form of pre-emptive higher contract prices that try to factor in future supplier hikes. Here’s Vodafone’s take on that:
We simply do not control many of the charges faced by consumers. They are set by third parties and mobile phone companies have to pass those costs on or they will be subsidising other companies. Prices set by third parties such as BT, include those for directory enquiry services, premium rate and 08 numbers. Yet Ofcom appears resolved to introduce measures that would effectively prevent any rises in these prices being recouped while customers are still in contract.
However, Vodafone does agree that the rules need to be clearer, saying: “We believe there is work to be done to ensure that customers understand the need for long-term contracts and to ensure they are protected during that time, but Ofcom first needs to understand the difference between the prices that are set by mobile phone companies and those which are not.”
The network also suggests it might end up making calling plans more complex, as users may end up paying different prices for different services, depending on which supplier has jacked up its prices.
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Subsidising your £7.5bn profit you made last year you mean Vodafone!!! People will come and go anyway, I dont think a change in when the come and go will effect your £7.5bn profit that much, unless you start screwing them more than you already do!
Yes, how dare they charge more when they’re making a profit – they should keep cutting the price you pay until they only break even each year.
Reductio ad absurdum.
He isn’t saying that at all, what he’s saying is Vodafone are taking the piss with this statement. They made enough money last year to EASILY survive this kind of change to their contracting, but they don’t want to lose any of the stranglehold they have over their customers.
I would also point out that they really do make so much money that it takes the piss and that they should be cutting the cost of phone contracts. You know it doesn’t actually cost anything to send a text message? As in there is no cost whatsoever.
If customers don’t like the way Vodafone operates they should just go to another operator. The “strangehold” Vodafone have over customers is only for those who wanted them to subsidise a new mobile phone purchase.
Saying that there’s no cost to sending a text message is both true and utterly facile. It’s like saying that there’s no cost to TfL when I take the tube so they should be cutting fares.
I think the fact that these new rules are being considered means that they can’t
There is no cost to sending a text. It’s pure and simple. I recently got my ‘we’re putting up yo tariff, bitch’ email from O2 and they outlined that my line rental, and my tariff were both going up.
If I pay line rental (their perceived cost of my being connected regardless of what tariff I choose) then my phone will naturally be contacting their network to ensure I’m connected, and work out how well. As a text message replaces the information packet that would ordinarily be sent anyway (covered by my line rental) then it shouldn’t be included in my tariff. But it is, and I pay if I go over my allotted number of texts.
I don’t see what’s wrong with the argument?
If I paid TFL a yearly rate to have access to tube stations then had to pay extra to use the train each time, then that would be a better metaphor.
Also just to mention that when I say ‘they’ I mean phone companies in general, not just Vodafone, they’re all as bad as each other and when you say I should just go to another operator, this is exactly what Ofcom are trying to facilitate.
I use a sim only contract from O2 that I can leave at any point. I then did a few deals and swaps with people to get myself the phone I wanted (iPhone 4) for what I wanted to pay (£50), so I don’t have many of the issues most people face in relation to phone companies, but I have in the past. I’ve been screwed over by 3, Orange and O2, I hold all phone companies in the same low regard and I think it’s terrible that they’re allowed to conduct their business in the way they do.
The journey from handset to base station may be “free” from the operators’s point of view, but the handing of the message through the core network has costs associated with it – that’s why it’s ridiculous to say that the entire service has no cost to the network.
I think ridiculous is a little strong, but I see what you’re saying.
Either way I don’t think they really have a leg to stand on when they say this is unfair in any way. If my landlord wants to up my rent I can choose to leave, at no point should a contract made between two people be as one sided as phone contracts are.
In fact, if I had the money I’d probably question them in court under the unfair terms of contract act 1977. Of course they’d throw tons of lawyers at it and my cognitive ability barely extends past feeding myself and remembering to feed my dog, so I’d probably lose…
No Vodafone.. it just means people will finally be able to leave your crappy service and shop about more, i bet them prices fall when everyone is on EE or 3 soon enough o2 and Vodafone can rot for the way they have treated people over the last few years..
totally agree, cannot stand vodafone
Hang on. Things like “directory enquiry services, premium rate and 08 numbers” aren’t included with any minutes/contract and you have to pay (extortionately) extra for anyway? So what does this have to do with “in line with inflation” costs for contracts?
Nice try Vodafone.
Looks like what I said in the original thread was right – if phone companies aren’t allowed to increase prices mid-contract they’ll just do it upfront.
It would be nice if Ofcom could actually employ some people who understand economics.
Looks like you don’t understand economics OR logic. If they do increase prices upfront then it means people get to see the ACTUAL price of the contract when they sign it and can therefore make an informed decision.
If vodafone want to change their pricing on a regular basis then they should only offer short term contracts but obviously they don’t want to do that because they want the best of both worlds.
If Ofcom’s proposal went into effect, operators would increase the price of all contracts (regardless of term) with the justification that it’s to cover potential rises in costs. Since those costs aren’t predictable, the operators will simply charge whatever they think they can get away with.
If Ofcom were being sensible, they should mid-contract price increases to RPI and no more. That way it allows operators to meet increased costs but prevents them from profiteering.
Well, price rises should actually be tied to RPI-X with X reflecting expected efficiency gains achieved by the company/industry over the period. Further efficiency gains are then rewarded in the form of profits and the consumer gets a fair price.
but they wont be able to do it up front as it will price them out the market, they are already the 2nd most expensive and the service is no longer worth the cost.. 02 had the Apple premium over everyone.. Voda have nothing really and now EE have 4G first i can see them becoming the top dog for a while as people flood to be the first hipster on 4G