http://www.dailymail.co.uk/news/article-2008868/Orange-Vodafone-users-hit-mobile-charges-soar-66-cent.html


Orange and Vodafone users hit as mobile call charges soar 66 per cent

By Sean Poulter

Last updated at 11:31 PM on 27th June 2011

   
Soaring bills: Orange customers face an increase in charges by 25 per cent from Friday, while Vodafone is increasing some minimum call tariffs from 15p to 25p

Soaring bills: Orange customers face an increase in charges by 25 per cent from Friday, while Vodafone is increasing some minimum call tariffs from 15p to 25p

Mobile phone charges will rise by up to 66 per cent in a punishing new blow for consumers.

Millions of users signed to Orange and Vodafone will be hit with inflation-busting increases in contract and pay-as-you-go tariffs.

The moves appear to be a direct retaliation against attempts by watchdogs to crack down on rip-off pricing in the industry.

And they come as families are already suffering the biggest squeeze on living costs since the 1870s as price rises have outpaced increases in incomes for four years in a row.

Orange is putting up its minimum call charge for pay-as-you-go customers from 20p to 25p from Friday – a rise of 25 per cent.

Vodafone, meanwhile, is increasing the minimum call charge on some contracts from 15p to 25p – or 66 per cent. These charges apply to calls made outside of those allowed by a customer’s monthly contract.

Its pay-as-you-go users will see the cost of a text rise from 10p to 12p, while calls to mobiles and landlines will go up from 21p a minute to 25p.
The Vodafone increases take effect on July 14.

They are the latest in a series of increases by the major networks, who had vowed to recoup costs elsewhere if watchdogs in Britain and Europe curbed existing pricing structures.


Between them, Vodafone and Orange share just under half the market. Given their clout, the other providers such as O2 are likely to follow suit.

UK telecoms regulator Ofcom is forcing companies to reduce the amount they take from incoming calls to customers. Until earlier this year, the networks received 4.18p a minute from incoming calls through the so-called termination rate. That figure was cut to 2.66p a minute in April and will be further reduced.


Separately, the European Union is forcing down the cost of using mobiles when visiting other member states – so-called roaming rates.

The net effect of the fresh price rises is that, despite the promises of regulators, consumers are no better off.

Ernest Doku, of uSwitch.com, said: 'In the face of other rising living costs these will be a slap in the face to pre-pay consumers who will be counting the cost of every single mobile call.

'With both local calls and text prices increasing, pay-as-you-go users will probably have to do quite a bit more topping up for their credit to go as far.

'These increases beg the question of whether a contract might be better value for money for some pre-pay users.

'If you are spending more than £20 each month topping up your mobile, seriously consider opting for a pay monthly or SIM-only solution.

'With lower call rates, free texts and data, as well as the option to get a free phone in many cases, a pay monthly contract can work  out significantly cheaper in the long run.'

Vodafone blamed the price rise on Ofcom.

It said: 'We believe we continue to offer great value for all pay-as-you-go customers compared with our competitors. This price rise comes after recent regulatory changes.

'During our discussions with Ofcom over mobile termination rates, we stressed that if the rates came down rapidly and dramatically, the cost of pay-as-you-go was likely to rise as a consequence.'

Vodafone said customers who buy regular monthly top-ups of at least £10 ----- Continues............

Continued.......


can earn extra free calls and texts under a system it calls Freebees.

Orange said it remained ‘committed to providing the best value and services possible’.

It added that the price rises were offset by new perks such as an increase in the number of free texts that customers get with a £10 top-up.

Recent research suggested the average household will have to find almost another £900 this year just to stand still.

The price of a basket of food is  rising at the fastest rate for two years, while at the same time car and household insurance bills are also rising.

The reduction in mobile termination charges, brought about by Ofcom, not only means a reduction in the revenue on incoming calls from other (mobile and landline) networks, but a reduction in the cost of passing calls to other mobile networks.

So mobile operators suffer a loss of revenue on incoming calls but benefit through lower payments to connect calls when their customers call those on other mobile networks.

Be interesting to see if Tesco Mobile and Giffgaff increase there 8p a min call and 4p text payg  deals.

Dave wrote on Jun 28^th, 2011 at 8:39am:

The reduction in mobile termination charges, brought about by Ofcom, not only means a reduction in the revenue on incoming calls from other (mobile and landline) networks, but a reduction in the cost of passing calls to other mobile networks. So mobile operators suffer a loss of revenue on incoming calls but benefit through lower payments to connect calls when their customers call those on other mobile networks.

It was probably the reduction of revenue from roaming more so than reduction of termination rate revenue.

Put both together and the networks are getting less profit so they just increase prices in other areas.  This isn't right but it happens all the time and I believe it happened last time the termination rates were reduced.

Other networks prob will follow suit and just use the excuse of 'aligning/simplifying' their costs with those of their competitors.

sherbert wrote on Jun 28^th, 2011 at 6:23am:

http://www.dailymail.co.uk/news/article-2008868/Orange-Vodafone-users-hit-mobile-charges-soar-66-cent.html Orange and Vodafone users hit as mobile call charges soar 66 per cent [...]

While the cost of UK cellular calls is not of great significance to me, it seems that price increases such as these are somewhat regular. Every time I check providers' web sites for tariffs for the pre-pay services I maintain for the purpose of visiting the UK, the cost of a specified call always appears to have increased or that there is some other detrimental effect for the user.

Given these regular price hikes, is it not time for the UK to adopt the 'called party pays' model with respect to cellular/mobile telephony?

It is often argued within this forum that the perceived beneficiary for NGN 08x calls is the recipient - an argument that I fully support - and therefore we advocate that the beneficiary should fund the additional cost of number translation services.

I maintain that the primary convenience and benefit of mobile telephony belongs to the mobile phone owner, and not to the calling party, and therefore being consistent with the argument above, is must be the responsibility of the called party to fund that element of benefit and convenience.

After seven years with AT&T Cellular, I honestly do not recall any price increase for cellular calls - quite the opposite in fact. Call costs have been reduced on a per minute basis by the inclusion of additional airtime for a given cost.

I accept that there is potentially a disadvantage for pre-paid service with the US model, but for contract phones, the benefits are considerable, not least the integration within the regular numbering plan, and free calls from the local calling area.

One provider here offers unlimited calling (incoming and outgoing) and unlimited SMS for $40 per month, no contract required (month-to-month billing), which is the equivalent to GBP 25 per month. Is there anything similar in the UK?

I pose this for discussion for those who may be interested and have views either way.

idb wrote on Jun 28^th, 2011 at 11:46pm:

Given these regular price hikes, is it not time for the UK to adopt the 'called party pays' model with respect to cellular/mobile telephony?

It is surely down the mobile operators to decide that this is the "choice" they wish to offer us.

They may wish to offer plans with incoming call charges in return for lower outgoing charges. However, if both were to be on offer in the marketplace at the same time, savy mobile users would have two mobiles, one for outgoing calls (the one with incoming call charges) and one for incoming calls (the one with no incoming charges).

idb wrote on Jun 28^th, 2011 at 11:46pm:

Given these regular price hikes, is it not time for the UK to adopt the 'called party pays' model with respect to cellular/mobile telephony?

I am not overly keen myself on 'called party pays' model but in my personal opinion even if UK was to adopt the 'called party pays' model, I still believe we would see price rise after price rise.

Everything in the UK is generally always more expensive than elsewhere even things made over here and exported elsewhere.  That's why the UK has the nickname ROB (Rip Off Britain) lol.  For example, even somethings sold world-wide and so, in theory at least, only exchange rate should dictate how much it costs in the UK has been known to be more than in the US or a lot more than it should bearing in mind the exchange rate.


Quote:

...One provider here offers unlimited calling (incoming and outgoing) and unlimited SMS for $40 per month, no contract required (month-to-month billing), which is the equivalent to GBP 25 per month. Is there anything similar in the UK?

No (last I checked).  Last time I checked I think so-called unlimited tariffs were around £40 mark but the unlimited was subject to fair use anyhow.

Is this tariff in the US truly unlimited or subject to fair use of x amount of mins/texts like over here?

bbb_uk wrote on Jun 29^th, 2011 at 11:28am:

Quote: ...One provider here offers unlimited calling (incoming and outgoing) and unlimited SMS for $40 per month, no contract required (month-to-month billing), which is the equivalent to GBP 25 per month. Is there anything similar in the UK? No (last I checked).  Last time I checked I think so-called unlimited tariffs were around £40 mark but the unlimited was subject to fair use anyhow. Is this tariff in the US truly unlimited or subject to fair use of x amount of mins/texts like over here?

Fair use limitations are uncommon(*) here for voice calls, although data is another matter. The $40 tariff (MetroPCS) covers unlimited inclusive calls with little or no restriction within the contiguous 48 states plus the District of Columbia. Unusually for the US, this tariff also includes taxes, fees and surcharges, which often add 10% to 30% to a monthly bill, depending on location. Given such a tariff, with unlimited calling nationwide, it is irrelevant as to whether incoming calls are chargeable. A big advantage is that, assuming your caller is in the same calling area and is calling from a residential line, then the call will be free to the calling party (as we have free local calling). So a caller from a Miami residential land line calling a MetroPCS customer with a number that is local with respect to the landline will not have to pay a call charge, even if the Miami MetroPCS customer is located in California.

Having used both systems (UK and US model), I would certainly take the one here. Yes, there are some drawbacks, but I would argue there are significant benefits, including the free local calling described above. My family plan provides more than enough minutes, plus unlimited nights and weekends, so the fact that I 'pay' airtime for incoming calls is largely irrelevant, and if I really wanted to switch to MetroPCS, which I don't, then I could have unlimited incoming and outgoing cellular calls for the equivalent of twenty five quid, and toll-free calls treated in exactly the same way as regular numbers.


(*) MetroPCS does appear to limit its unlimited long distance to personal use:

Unlimited Long Distance (“LD”) Services provided by MetroPCS is intended for your personal use and not for commercial use or for resale. Loaning or renting your handset to third parties for their use is not considered personal use. We will presume certain usage, dialing, or calling patterns indicate that you are not using the LD service for your personal use and we reserve the right to suspend, terminate or restrict your services within no prior notice. If you believe that we are in error, you may contact customer service at 1-888-8metro8 and depending on the circumstances we may reactivate your LD Service. However, if the usage, dialing or calling patterns we deem connote non-personal use continues, we reserve the right to suspend, terminate or restrict your services within no prior notice and not allow you to reactivate service.

idb wrote on Jun 30^th, 2011 at 3:20am:

…My family plan provides more than enough minutes, plus unlimited nights and weekends, so the fact that I 'pay' airtime for incoming calls is largely irrelevant…

Do you avoid giving out your mobile number and give out your landline number instead (so as to reduce the number of calls you get to your mobile)?

Is it obvious when you look at a number that it is for a mobile rather than a landline? For example, are there special subranges?

High outgoing pence per minute rates are certainly off-putting and I think that I would be more willing to accept receiving party pays under the type of plan you describe.

Dave wrote on Jun 30^th, 2011 at 8:49am:

idb wrote on Jun 30th, 2011 at 3:20am: …My family plan provides more than enough minutes, plus unlimited nights and weekends, so the fact that I 'pay' airtime for incoming calls is largely irrelevant… Do you avoid giving out your mobile number and give out your landline number instead (so as to reduce the number of calls you get to your mobile)

There has always been a reluctance on the part of some people to give out mobile phone numbers for two main reasons - the cost of receiving calls and to avoid telemarketers. Because calling plans have, over time, made more airtime available for a given cost, it is now perhaps not as much as an issue for post-paid plans. Pre-paid plan holders may still be reluctant to publicize their numbers as each call or SMS received, even junk ones, will incur a cost. On the second aspect, telemarketing, we have a do-not-call register that actually appears to work and is enforced by the FCC. While not perfect, the register appears far more effective than the TPS-administered UK equivalent based on my recollection from prior to 2004. The FCC complaint procedure does appear to be effective, and on the few occasions that I have used it, subsequent calls from the violators have ceased. I do not avoid giving out my cellphone number, but prefer the landline simply because cell reception at home is lousy, and dropped calls can be an issue.

Overage (airtime outside of bundled and rollover minutes) will typically cost 45c/minute for voice calls on AT&T plans.



Dave wrote on Jun 30^th, 2011 at 8:49am:

Is it obvious when you look at a number that it is for a mobile rather than a landline? For example, are there special subranges?

Because we have full number portability between cellular and landline services (assuming the same location/exchange), it is generally not possible to determine the use of the number outside of an initial allocation. Reverse number lookups, which are commonplace here, usually give an accurate determination of number allocation to specific provider. Entering my own cellular number into such a system gives a valid listing:

(561) xxx-xxxx is a Cell Phone

Likely Location:
   Florida (West Palm Beach, Lake Worth)
   South Florida/Gold Coast metro area, Palm Beach County

Repeating with a VOIP number allocated to me gives:

(305) xxx-xxxx is a Landline

Likely Location:
   Florida (Miami)
   South Florida/Gold Coast metro area, Miami-Dade County

Entering my home number reveals my name and address.

idb wrote on Jul 1^st, 2011 at 3:31am:

There has always been a reluctance on the part of some people to give out mobile phone numbers for two main reasons - the cost of receiving calls and to avoid telemarketers. …

So there is definitely a trend of people not giving out mobile numbers in the US. This doesn't surprise me at all.

I know we have discussed the situation in North America at length in this forum before. However, I don't recall much discussion about mobile telephony provision there.


What are the similarities and what are the differences between the UK mobile operators and those in the US?

1. In the UK, the operators were made to pay a lot of money in bidding process for licences to use some of the spectrum. It stands to reason that this has pushed up the amount that citizens must spend on mobile telephony. How does this compare to the US?

2. In the UK, GSM networks operate at 900MHz and 1,800MHz whereas in the US they use 1,900MHz only. Higher frequencies permit more speech channels, but signals don't travel as far and the energy is absorbed more by objects such as walls (and buildings) than at 900MHz. Consequently, more base stations are needed at higher frequencies. Does this mean that coverage is often patchy in the US, particularly in rural areas where it benefits operators much less to install new base stations?

3. In the UK we have five networks (including the 3G only 3 network) which have licences to operate radio telephony right across the country. In the US I understand that telephone companies generally operate state by state (although some may be owned by the same company). What about mobile operators? Does one telephone company operate landline and mobile telephony in one area? Or are there competing mobile operators in any one place and if there are, how many typically?

Dave wrote on Jul 1^st, 2011 at 2:18pm:

[quote author=idb link=1309242225/0#10 date=1309491119]1. In the UK, the operators were made to pay a lot of money in bidding process for licences to use some of the spectrum...

I could be wrong but I thought the first two operators out there (Vodafone and now what is o2, previously bt cellnet) that operate on the lower 900mhz frequency were given the spectrum/licence for either a reduced price or for free (I'm sure I read it was free but can't be sure) compared to those running on 1800mhz+ frequencies.

bbb_uk wrote on Jul 1^st, 2011 at 4:41pm:

Dave wrote on Jul 1st, 2011 at 2:18pm: 1. In the UK, the operators were made to pay a lot of money in bidding process for licences to use some of the spectrum... I could be wrong but I thought the first two operators out there (Vodafone and now what is o2, previously bt cellnet) that operate on the lower 900mhz frequency were given the spectrum/licence for either a reduced price or for free (I'm sure I read it was free but can't be sure) compared to those running on 1800mhz+ frequencies.

I have to say, I'm not sure about that, but it was reported that there were certainly high prices paid for the more recent (last 10 years) 3G licences.

Dave wrote on Jul 1^st, 2011 at 2:18pm:

idb wrote on Jul 1st, 2011 at 3:31am: There has always been a reluctance on the part of some people to give out mobile phone numbers for two main reasons - the cost of receiving calls and to avoid telemarketers. … So there is definitely a trend of people not giving out mobile numbers in the US. This doesn't surprise me at all.

I think there was a tendency rather than there being a current one - subscribers wished to avoid expensive overages. In the past, there may have not been sufficient inclusive airtime to prevent this. Now, bundled plans include more airtime, and those with overages are either using the wrong plan, or simply cannot be bothered to change to something more suitable.

An article in yesterday's Palm Beach post,  http://www.palmbeachpost.com/news/state/phone-deregulation-droopy-drawer-regulation-among-160-laws-1573506.html?page=2 , provides the following statistic relating to the state of Florida:

<<
In a state of 18.1 million residents, 21 million cell phones are in use compared to 5.7 million traditional land lines.
And just one in five Floridians still uses only a land line. Of the land lines, only about 160,000 have only basic services.
The rest have "bundled" packages, meaning their land lines are linked to other services like the internet or safety alerts.
>>

One can perhaps infer that a substantial number of people only have cellphone service, and one can further infer that they provide and promote these numbers, and anecdotally, many of my acquaintances only have cellphone service. The transient nature of the state demographics, plus the potential for credit checks and deposits for land line service, will also determine a particular telephone provision.



Dave wrote on Jul 1^st, 2011 at 2:18pm:

I know we have discussed the situation in North America at length in this forum before. However, I don't recall much discussion about mobile telephony provision there. What are the similarities and what are the differences between the UK mobile operators and those in the US? 1. In the UK, the operators were made to pay a lot of money in bidding process for licences to use some of the spectrum. It stands to reason that this has pushed up the amount that citizens must spend on mobile telephony. How does this compare to the US? 2. In the UK, GSM networks operate at 900MHz and 1,800MHz whereas in the US they use 1,900MHz only. Higher frequencies permit more speech channels, but signals don't travel as far and the energy is absorbed more by objects such as walls (and buildings) than at 900MHz. Consequently, more base stations are needed at higher frequencies. Does this mean that coverage is often patchy in the US, particularly in rural areas where it benefits operators much less to install new base stations? 3. In the UK we have five networks (including the 3G only 3 network) which have licences to operate radio telephony right across the country. In the US I understand that telephone companies generally operate state by state (although some may be owned by the same company). What about mobile operators? Does one telephone company operate landline and mobile telephony in one area? Or are there competing mobile operators in any one place and if there are, how many typically?

Answering your points as best I can, there are four national cellular phone providers as of June 2011 - AT&T, T-Mobile, Verizon and Sprint. Subject to government approval, AT&T intends to buy T-Mobile for $39bn, which will leave us with three nationwide providers. AT&T and T-Mobile use GSM technology for 2G, AT&T using 850MHz and 1900MHz frequencies for both its 2G and 3G services and T-Mobile using 850MHz and 1900MHz for its 2G services and 1700MHz and 2100MHz for its 3G and 4G services. Sprint and Verizon use the CDMA standards.

Frequency auctions have occurred in the past. I do not recall any recent ones.

Coverage can be patchy, especially with the growth of data traffic. A frequent complaint is call dropping. When I was at LAX airport last year, on two separate occasions, it was very difficult to access data on AT&T's network. Similarly in New York City last month, data access was not always available, presumably due to capacity. Signal strength at my home is poor. AT&T provided a free 3G Microcell which connects to the internet, and that has certainly helped, boosting the 3G signal, but yes, coverage in rural areas can be patchy, and coverage in metro areas can run into trouble with capacity.

In addition to the four/three national providers, we also have regional providers such as the earlier discussed MetroPCS and U.S. Cellular. There are also other smaller regional carriers as well as virtual services such as Virgin Mobile and TracFone.

Obviously the four nationwide companies compete throughout the country in locations where they provide service. As far as I know, there is no regulatory barrier to prevent say Verizon providing coverage in an area that it doesn't currently serve. There may well be restrictions placed on regional carriers - I simply do not know.

Cellular phone numbering uses exactly the same format as with landline numbering, and there is full number portability between them, subject to geographical area.

http://www.dailymail.co.uk/money/bills/article-2067206/Orange-pay-monthly-customers-hit-4-34-increase-New-Year.html

I was an orange customer for many years, I have now changed to Virgin becuase it was the best package for me. I am a low user and the charges are 8p per minute and 8p per text compared to 20p per minute with orange.

It will not suit all, but it is worth looking into, I also receive FREE 118 calls and FREE landline to mobile calls

This package is only available to call unlimited customers

Just had a thought (dangerous for me I know) take out a contract with an alternative user and then cancel your direct debit to Orange. This will not deter you from using an alternative provider because your contract will be in force by then and credit checks will have been carried out.

Not best practice but Orange have not carred out best practice either

I doubt that Orange could show that it would suffer "material detriment" if I decided to vary the terms of our agreement, by not paying the increased price!

More seriously, if anyone wants to get an idea of what the prices would be if they were fixed, have a look at the fixed prices deals offered by energy companies.

Yet more seriously, the RPI is the wrong standard for a mobile pay monthly deal as a significant part of the price is effectively a lease payment on the handset. The RPI is based on the cost of goods, not on the cost of finance.

My Vodafone contract has increased from £25 to £26 per month. Now, I'm supposed to have 18 months' free line rental from mobiles.co.uk (Carphone Warehouse). That was sold as 18 months FREE line rental by cashback redemption, NOT £25 cashback per month for 18 months. So I think CPW should increase my cashback payments, but letters to them explaining this have been ignored. Where do I stand?

jrawle wrote on Dec 5^th, 2011 at 1:51pm:

My Vodafone contract has increased from £25 to £26 per month. Now, I'm supposed to have 18 months' free line rental from mobiles.co.uk (Carphone Warehouse). That was sold as 18 months FREE line rental by cashback redemption, NOT £25 cashback per month for 18 months. So I think CPW should increase my cashback payments, but letters to them explaining this have been ignored. Where do I stand?

I would have thought that this will be covered in the terms and conditions for the cashback. Is it covered?

Dave wrote on Dec 5^th, 2011 at 2:02pm:

I would have thought that this will be covered in the terms and conditions for the cashback. Is it covered?

I haven't been able to find anything.

They seem to calculate the cashback as an absolute amount at the start of the contract, and pay it in equal instalments, even though the payments aren't equally spaced throughout the contract. So £25 x 18 = £450, £450 / 5 payments = £90. They don't adjust this for subsequent price changes, yet that doesn't change the fact the original deal was for free line rental.

I think that Ofcom needs to look seriously at the difference between 12/18/24/36 month contracts and 12/18/24/36 month fixed-price contracts.

Many people are buying the former, whilst thinking that they are getting the latter.

I am not even aware of any cases of the latter being offered in telecoms. Is this something that telecoms consumers want - i.e. do we want to pay extra to hedge against inflation at the start of our contracts?

---

I cannot see any significant difference between what Orange and Vodafone are doing as against what BT has just done. Is there a difference?

---

If someone is describing a mobile phone contract subscription charge as "line rental" when it probably includes lease payments on a handset and an inclusive call plan, then there is some serious mis-selling going on.

SilentCallsVictim wrote on Dec 5^th, 2011 at 10:00pm:

I am not even aware of any cases of the latter being offered in telecoms. Is this something that telecoms consumers want - i.e. do we want to pay extra to hedge against inflation at the start of our contracts?

In the domestic energy market, for example, consumers can choose between variable or fixed tariffs. The latter cost more initially and usually tie the consumer in for a fixed term, with a penalty for early exit, although the penalty is often far less than 10% of the annual bill. Variable tariffs usually don't have a fixed term. If they increase prices and you are unhappy, you can switch provider immediately, and even keep the old price in the meantime.

The trouble with phone contracts is that although they are variable in price, they are for a fixed term, and there is often no way to exit early - i.e. the penalty is 100% of the remaining value of the contract. That can't be right.

I don't have a problem with price increas, but I do have a problem with price increases where the customer can't escape from the contract at all.

My own issue is something quite separate. Free means free as far as I'm concerned, and yes mobiles.co.uk do call the monthly cost of a contract "line rental".

http://www.mobiles.co.uk/free-line-rental.html

jrawle wrote on Dec 6^th, 2011 at 12:19pm:

I don't have a problem with price increas, but I do have a problem with price increases where the customer can't escape from the contract at all.

It would be hard for Ofcom to claim that there is a true market, where there is only one type of arrangement available - a minimum term arrangement where exit is only allowed if a proposed price increase exceeds regulatory standards (which refer to wholly irrelevant measures of inflation). Are there are any fixed price offers? or open variable price offers?

Part of Ofcom's function is to promote competition. The absence of either of these types of offer indicates that its regulatory approach is too focussed on one type of arrangement, even though this is probably what most people would end up choosing, because the alternatives would be offered at higher headline prices.


jrawle wrote on Dec 6^th, 2011 at 12:19pm:

... yes mobiles.co.uk do call the monthly cost of a contract "line rental". http://www.mobiles.co.uk/free-line-rental.html

I referred to this misuse of a term as "mis-selling", before I had tried to understand what is on offer from the website. I now see that this linguistic error is perhaps the least of the problems which any cautious consumer would encounter!