The UK's mobile sector has never carried more traffic, but revenue was down last year for the first time ever as users demanded and got more service for less money. Ofcom's Communications Market Report (lengthy pdf) says many things about the industry, not least that it's the first time the UK's mobile operators have seen …
Networks squeezing money any way they can
At the dawn of the networks a 12 month contract was a long time but slowly 18 month contracts appeared and became the normal deal for a somewhat decent allowance with phone. Now they're slowly pushing that up to 24 months and it's not on. Phones may be more advanced at the top end of the market but the price of them is still around the same. A high end Nokia four or five years back was around £350~ and that's the same for an unbranded HTC Desire today. How, then, do they justify the increased prices?
For a good example look at T-Mobile. They currently offer the HTC Desire on an 18 month contract at £30 a month with an up front cost of £340 (I think) for the phone. Move that to 24 months and the same deal nets the phone for £60. Why would anyone in their right mind pay £340 AND tie themselves into a contract when the SIM free phone costs barely £20 more? Of course if you don't know any better you look at the 24 month deal and go "WOW!" then opt for that. Artificially inflating prices to make other deals look good is a really low tactic. Mobile networks have milked customers for years with minutes that a lot of people don't use and now they want more? SIM only deal for me at contract renewal time I think, complete with SIM free phone.
beat me to it! only way id go into a 24 month would be if i can swap my phone after 12 asin free upgrade. not a chance im sticking with one phone more than 18 months ( i find that can be pushing it). maybe its just my experience but after 12 months phones see a sudden decline in quality they being to break, crash etc for no reason and nothing seems to fix them! screw that for 2 years!
Well said both
I got a Google HTC phone on a 24 month contract after 4 years of being with Vodafone.
They wanted £75 to upgrade the phone and I got to keep my existing plan - 600 minutes, 500 texts and *limited* internet use for £40 a month - goodie! *raised eyebrows*
I complained considering my partner (new customer) had recently took out a contract with more minutes, unlimited texts and unlimited internet for £10 cheaper.
Vodafone very promptly offered me the same deal and the phone for £25 which I considered a bargain (and iPhones had such cr*p tariffs even a little over a year ago) because I'd told them in no uncertain times I could get a better deal elsewhere as a new customer.
Now I desperately want an iPhone, Vodafone have stopped pushing out Android updates so I've had to use a Cyanogen ROM to get the latest and greatest Android, it runs as slow as a dog with no legs (even before the change to the ROM) and is actually a bit embarassing when you see everyone with their shiny iPhones which are 100 times more popular.
I agree with you both of you guys though, when it comes to renewal time in about 8 months I shall be changing to a £10-£20 SIM-only deal and saving my hard earned cash to buy an iPhone direct from Apple - SIM free.
I'm on T-Mobile and got a Desire for free on an 18 month contract, 900 mins, ultd texts, 3GB of internet. Can't really complain.
have you factored in the cost of service with your sums?
over the course of the two years with my usage i actually found the total cost of ownership to be less by having a phone on a contract!!!!!!
Cost of service varies
Yes, I factored in the cost of the service with all my sums. The cost to provide services to someone that uses all their allowance and someone who uses none of their allowance is different but both people will be billed the same. I use my phone primarily as a PDA with phone capabilities but there's some data use too, nothing massive by any means, but I still pay the same rates as someone who uses every bit of their allowance and nothing more. Price plans don't allow for such difference so the cost of service doesn't enter into the discussion.
Presumably the growing smartphone market will increase internet use and the networks profits again?
Since more people will be using app stores to get the full effect from their phones they will need mobile internet
"it's data capping that worries people"
Alleluia - someone is starting to understand this! It's not just an issue for mobile Internet though. I couldn't care less whether my broadband runs at 2mbps or 20mbps if I'm limited to a miserly 4GB a month. High speeds only make sense with a high (or ideally unlimited) data allowance.
4g isn't a cost
In the long term. It's a cost savings. Compared to 2g or 3g systems, it greatly reduces the cost per bit of carrying data. Long term, carriers have a choice of sucking it up and installing 4g, giving up being a player in data and providing mainly voice and messaging, or installing more and more channels on existing sites then having to install more and more sites as existing sites are maxed out. Giving up on data can work, one carrer where i live *just* upgraded from gprs to edge last year, but have the cheapest plans in town (since they aren't spending on 3g or 4g). Installing more sites costs probably more than 4g, and eventually becomes difficult when there's already so many sites in an area that the good locations are already taken.
truly unlimited data usage with t-mobile freely included in the phone contract
We all must remind mobile phone companies that mobile phones remain just a luxury item, people only spend if price is right!
T-mobile has certainly forced other uk companies to follow with the deals they offer, I was previously being riped off for over 5 years by vodafone and changing to t-mobile was the best thing i ever did. The vodafone "world" is literally a pain in the back side, I'm glasd i'm no longer a vodafone customer!
Keep up the good work T-mobile, thank you
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