back to article Canny Brits are nuking the phone bundle

New research has highlighted a revolution in how Brits buy phones as punters become more discerning. Consumers are now more aware that they can buy the phone and the network access separately, and are increasingly doing so. "Many were totally unaware of the true value of the plan, and this marks a real change," CCS Insight …

Page:

  1. Christian Berger Silver badge

    I never quite understood why one would get a bundle

    I mean apparently carriers don't even replace it if it breaks, so in effect you are paying nearly normal price for a limited selection of nearly identical devices. If you are unlucky, you get locked devices which are completely unneccesary work.

    I mean there used to be good offers, like the ones from the (now defuct) German carrier QUAM. They offered you a 24 month contract with 10 DM minimal fee. For that you got a "free" mobile, plus 240 DM in debit. So most people simply went there, got a contract, quit it immediately and therefore paid nothing, but walked away with an unlocked mobile phone.

    1. Ogi
      Thumb Down

      Re: I never quite understood why one would get a bundle

      I never understood it either. I once worked it out. In order to get the latest Samsung (I think it was the note II at the time), I would have had to sign up for a 24 month contract at £45 a month.

      The phone could be bought for around £300 at the time if I remember correctly, whereas it would have cost me a total of £1080 over 24 months to get the bundle (If I didn't exceed the bundle data/minutes/SMS limits, and didn't do any roaming). Assuming retail price for the phone, the rest of the bundle would have cost me £780 in total, or £32.50 a month.

      Instead I bought it outright, and took a rolling monthly "sim only" contract at 15 a month. It seemed like a better financial deal, with the ability to leave in a month without penalty if a better deal comes along.

      Nothing worse then being locked into a contract for 24 months. The provider doesn't bother treating you well, because they know you can't leave without a hefty charge, so they can push you further knowing you will tolerate it.

      The phone is not protected, so if you break it before the contract expires, you still have to pay the full bundle cost (+ get another phone), and if better cheaper deals come along, you can't take advantage to switch.

      Not to mention is that until the "bundle" is paid off, the phone is not yours, but theirs. So it is locked, so you can't use another sim (e.g. if you go abroad and want to avoid roaming costs), and usually you can't unlock/root/reflash the OS either.

      I remember finding out that T-mobile would install their own root SSL certificate and MITM all data through their proxies, ostensibly to reduce bandwidth usage, but you could not remove this (IMO) gross violation of privacy and security risk. It was baked into "their" phone via custom firmware, and there wasn't a thing you could do about it until the bundle was complete and they would give you the codes to unlock the phone (and even then, getting the codes out of them is an exercise in pulling teeth).

      Basically downsides all round for the customer, but a lot of benefit for the bundle providers, from my vantage point. I am surprised people bought bundles at all, perhaps those who just looked at the monthly cost and considered it cheaper than the upfront purchase, with no concern for total cost of ownership.

      1. Anonymous Bullard

        Re: I never quite understood why one would get a bundle

        I once worked it out.

        Well, there you have it. You just made yourself not their target customer.

        The train of thought is: Hmm.. 300 quid is a lot of money... £45? I can afford that!

        1. JimboSmith Silver badge

          Re: I never quite understood why one would get a bundle

          I worked with someone who told me that his family was always short of cash even after payday. Part of the reason for this was that he was useless at working things out and spent money like it was going out of fashion. So lunch was always at the local sushi restaurant and food for the home bought at Wholefoods. However it was the mobile contract that made me concerned because he was on £45/month so £540 a year. He didn't see £540 he saw £45 which given the state of his finances even that should have been worrying him. This was to get the latest handset which he admitted he probably didn't need. All he did was WhatsApp, play Angry Birds and make the odd phone call. He had a work phone which he used for data and work calls. It was a two year contract and so he was paying over a grand for something he did not need. We worked out he could have been on PAYG as opposed to a contract and bought a sim free cheaper phone. Would have saved a small fortune but he wouldn't be told, there's no helping some people.

      2. werdsmith Silver badge

        Re: I never quite understood why one would get a bundle

        Frequently done on O2 where the equipment purchase and airtime are itemised separately, the airtime can be immediately cancelled and the equipment costs paid off, with the free unlock requested first.

        Half price phones.

      3. Anonymous Coward
        Anonymous Coward

        Re: I never quite understood why one would get a bundle

        While your Note 2 worked out cheaper on unbundled, my Note 3 worked out roughly cheaper IIRC on bundle, as same price without contract, but up front, and a little more for the monthly call charges/usage.

        However, after that, I've not seen a single deal that was cheaper than cash for the phone and sim only (take your pick of dirt cheap monthly contracts and tons of useage). Even if they do allow you to "spread the cost", it's gonna work out cheaper via credit card or store credit/payments (I think Amazon, Game and a few others do interest free credit on some purchases).

        1. Dave 126 Silver badge

          Re: I never quite understood why one would get a bundle

          Also, if you buy a phone outright you are covered by the Sales of Goods Act, so should it malfunction you can return it for an immediate refund or new unit - your choice. By contrast, if you get the phone on a bundle it is not 'yours' until the contract reaches term, so the carrier often insists on sending the handset away for a couple of weeks to be repaired.

          1. Anonymous Coward
            Anonymous Coward

            Re: I never quite understood why one would get a bundle

            "you are covered by the Sales of Goods Act, so should it malfunction you can return it for an immediate refund or new unit - your choice".

            That's NOT correct.

          2. SonOfDilbert

            Re: I never quite understood why one would get a bundle

            Someone correct me if I'm wrong, but I think that...

            ...if you buy a bundle, the carrier is extending you credit and so you are covered by the Consumer Credit Act in the UK (https://www.legislation.gov.uk/ukpga/1974/39/contents). This can actually be quite useful to consumers who experience issues with their goods as it extends additional legal cover to consumers. This act is also the reason why some consumer organisations recommend buying large purchases with a credit card and then paying the balance off ASAP.

            Either way, whether bought outright or on credit as part of a bundle, I believe the goods must be fit for purpose and not break before a reasonable time period (whatever that may be).

            BTW, (again, correct me if I am wrong, but) this act and the Sale of Goods Act trump any manufacturer, vendor or carrier guarantees, terms or conditions. They are statutory and cannot be negotiated away. They are enshrined in law. They are a beacon of hope in the wilderness of consumer despair. Etc.

            1. katrinab Silver badge

              Re: I never quite understood why one would get a bundle

              I paid the £789 for my iPhone my Amex, so I'm covered by the consumer credit act. Amex are far more likely to help me than O2 if there are any problems.

      4. heyrick Silver badge

        Re: I never quite understood why one would get a bundle

        As a person on a contract... It was important to me to have my landline and internet provided by the same company that owns the phone lines. I've personally seen months of delays as "cheap provider" and telco argue over whose responsibility it is to deal with problems. Since I live in the back of beyond, I need to be able to depend upon sanity, not madness. That puts the overall price up, but a few years back when a hurricane (sorry Mr Fish, I mean storm) knocked out the line with tree shaped objects, it was fixed and working again in a few days. No argument, just in the queue.

        Now the bundle is for landline, internet, and a mobile. It comes in two options. The one with a phone, which costs ~€15 more than the one without. The with-phone contact allowed me to get a Samsung S7 for €100 and upon proof of activation, Samsung refunded me €100. In other words, for €15/month over 24 months, I get a shiny new phone way out of my normal budget. It's a great phone. My new best friend (but that's 'cos I'm sad and boring but anyway...).

        I suppose it might make financial sense if you have the money to spend on a phone and only need a cheap SIM for it. Not all of us have the option. That's why I'd never, ever, buy an Apple phone. No hate for the fruit, I just cannot justify a lump sum of how much?! for...a phone. There are so many things of much greater importance that would come first if I had that kind of money lying around.

        It must be a strange country you live in where they still bother to SIMlock the things. My phone was mine the moment I signed the contract. I can break the contract at any time but I would need to pay a penalty. So telco doesn't lose. I could quite easily drop in a different SIM and use it. Telco won't care, all national calls are free with my contact (to and from mobile) so by using another SIM it's probably me losing out. When roaming, within Europe it's 3GB of data and 3h of calls per year as standard. From then on, I think it goes to normal call charge as roaming costs aren't a "thing" any more. Oh, and the landline - for what it's worth - offers free calls to most countries that aren't known for terrorist activities. I could phone you, a friend in Scotland, Langley VA, and Japan. The call charges? Zero. Nothing. It's been actual years since I've paid anything to the telco over the usual monthly cost.

        You're right that the phone is "yours" and breakages aren't covered. That's why I took out a small additional insurance plan. A few extra euros a month, I'm covered for two "issues" a year. Given the price of a new S7 (less now then it was then, what with newer models existing), it made sense. It would take about three seconds for it to slip out of my hand in the locker room and tumble to its untimely "krshhhh" on the concrete floor. Thankfully this hasn't happened, but if it did...

        All of this adds up to an amount that can be justified on a monthly basis. Sure it's higher than other options, but it's the one that offers the most peace of mind for the lowest outlay at any given time. Plus a new phone every two years, and usually somebody (this time Samsung, last time telco) refunds all or most of any given initial purchase fee. It's crazy, they ought to just sell it for less, but hey, that's how these things work...

      5. SonOfDilbert

        Re: I never quite understood why one would get a bundle

        Yep.

        Years ago, when the carriers started upping their contract lengths to 18 and then 24 months, I put a spreadsheet together to compare network carrier bundle details. I compared how much in total the packages would cost monthly and yearly and compared those total costs against buying a handset outright along with various SIM-only deals. The price difference is significant and since then, I have never bought a bundle of evil again.

    2. Anonymous Coward
      Anonymous Coward

      Re: I never quite understood why one would get a bundle

      I mean there used to be good offers, like the ones from the (now defuct) German carrier QUAM. They offered you a 24 month contract with 10 DM minimal fee. For that you got a "free" mobile, plus 240 DM in debit. So most people simply went there, got a contract, quit it immediately and therefore paid nothing, but walked away with an unlocked mobile phone.

      I can see why they're now defunct. That's not a "good offer", it's a "bloody suicidal offer designed by an idiot".

      I don't blame those who took advantage, but WTF were QUAM's management smoking?

      1. Ken 16 Silver badge
        Facepalm

        Re: I never quite understood why one would get a bundle

        As someone who has worked at a few mobile telcos, it seems like the marketing people come out with plan offers to attract new (or switching) customers and get rewarded when those work. The plans get dropped after 3-12 months, depending on whether their profitability was assessed on a quarterly or annual basis but then the customers stay on the plan until they can be tricked off.

        If I recall correctly, one vendor had about 4 customers left on a 1980's era small business plan that gave them 5 handsets a year free and free calls and texts (not sure about data) for something like €36 annually - because that was a lot of money at the time.

    3. alcopops

      Re: I never quite understood why one would get a bundle

      Depends on the contract. I saved £100 on my Samsung S9 by buying a contract from mobiles.co.uk It was a Vodafone red one, but much cheaper through them.

      1. David Nash Silver badge

        Re: I never quite understood why one would get a bundle

        "I saved £100 on my Samsung S9 by buying a contract from mobiles.co.uk"

        Yes, third-party contracts used to have some great bargains. Worth getting the bundle when it's a good deal.

  2. onefang Silver badge

    So the world is catching up on what us smart people did all along? About bloody time, should be much more of that happening.

    1. werdsmith Silver badge

      Without mug punters paying for inclusive contracts there will be nobody to subsidise astute purchasers.

      Costs will go up.

      1. xanda
        Black Helicopters

        Maybe - maybe not...

        Prices may go up but it's unlikely - especially in the long term. Customers are now thinking more in terms of total cost of ownership (even if at an intuitive level) and are clearly voting with their feet.

        The overpriced and onerous bundles that have been the traditional staple of the market never really had anything to do with the cost of the phone in the first place. That's because, and with a few exceptions, retail prices for goods bear no real relation to the costs of manufacture and distribution. That's why phone models are priced differently across markets - vendors know where they can milk it and where they can't.

        There may be some equalisation of prices between bundles and SIM-free handsets if networks go through a phase of determining whether or not they continue with the old ways. Arguably there has been some activity already on this front, with some networks offering contracts with devices that are factory unlocked from new (thanks be the regulators admittedly). They may even relish the thought of simply selling airtime and services as it will remove them from the tedious and costly device support chain - warranty claim anyone?

        Those who want the latest flagship and are prepared to shell out will always be there, but mostly the market is fed up with being done-over: being tied into either a poor service or phone that fails to deliver a satisfying fulfilment - or frequently both - just isn't fun anymore.

        That leaves the market open to manufacturers who are able to provide commodity handsets at a reasonable price, and maybe even more choice than the paucity that currently exists. While this might mean higher upfront prices (and we can't really see how) in the near term, it will ultimately force the market down as punters shop around.

    2. Charlie Clark Silver badge

      For many, the lower monthly rate is more attractive than a single upfront payment. And, often the networks have been able to offer reasonable TCO prices for the handset which they buy at discount. The price for customers has been in tarriffs they don't need, plus the known reluctance to switch tarriffs or providers on time before the contract automatically renews: shopping around can be a hassle.

      But the main factor, I suspect, is simply that this year's phone is not much different to last year's (or the year before's) one. This is also makes phones less of a status symbol.

  3. steviebuk Silver badge

    Odd....

    ...that this is a new thing as I've been doing it for years. I think only once in the late 90s did I get a bundle because I couldn't afford the phone unlocked, outright at that time.

    1. Dan 55 Silver badge

      Re: Odd....

      I've only done it once, when CPW offered cashback after six months or so, and that covered the cost of the entire year's contract. The phone was unlockable so I could use it on Orange with an OVP Virgin tariff.

    2. Sixtysix

      Re: Odd....

      Never have bought a bundle...

      ...and all phones bar my first (a Nokia 3210) have been bought from either China direct, or via Amazon box shifters bulk reselling Chinese phones. Oh, and one via CEX (Huawei - still Chinese).

      Had some amazing value, some great bargins, and some really dodgy batteries (still have to buy one a year for my early 8core android... that is still on Marshmallow). Saved a blind fortune comparatively.

      Obviously not a phone snob :D

  4. Dr_N Silver badge

    Not taking a phone from my network means I get €20 a month off my tariff. Getting DSL from my mobile provider reduces it by another €10 a month. All-you-can-eat voice,texting and data even when roaming.

    Who doesn't do this? Ah people stuck in the backwater that is the UK. :-(

    1. phuzz Silver badge

      Plenty of people in the UK go SIM only (myself included). But there's plenty of reasons people don't:

      People who can't be bothered to do the maths and therefore don't realise what they could save

      People with poor impulse control who want the new iPhone (eg) but can't afford to buy it outright

      People who never realised you could go SIM only

      People who can't be bothered to make two transactions (contract AND phone)

      People who do do the maths and realise that sometimes it is cheaper to get the phone on contract

      etc.

      1. Dave 126 Silver badge

        > People with poor impulse control who want the new iPhone (eg) but can't afford to buy it outright

        Apple (with Barclays in the UK) have finance plans to spread the cost of iPhones - over 3, 6, 12, 24 and 36 months. But yeah, you'd have to do the maths.

        1. Anonymous Coward
          Anonymous Coward

          It's a few years ago now, but my wife got a galaxy s3 on contract that was cheaper over the 24 month term than the handset would have cost on its own. Sadly they don't seem to offer bundles like that any more... SIM only is almost always the smart move these days.

  5. matjaggard

    What a rubbish survey

    Just a few people took the survey and they discovered things like "Only 36 per cent of UK SIM-only customers expect to take a traditional bundle-plus-phone deal when their current plan ends" - what's the point of that statistic?

    1. AMBxx Silver badge

      Re: What a rubbish survey

      It could also have been worded '2/3 of SIM only customers plan to change to a bundle', which would make bundles look really popular.

      Like you say - crap stats.

    2. Anonymous Coward
      Anonymous Coward

      Re: What a rubbish survey

      So everyone in your country of habitation does what you do?

    3. Anonymous Coward
      Anonymous Coward

      Re: What a rubbish survey

      Your statement could imply you read the Daily Express regularly.

      Have you read the survey? How you read and understood the methodology? Have you got the margin of error?

      Please use this info to evidence your conclusion.

    4. Anonymous Coward
      Anonymous Coward

      Re: What a rubbish survey

      All it proved was that a subset of the population lacked the common sense to avoid someone walking towards them carrying a clipboard and asking "can you spare me a few moments of your time"?

      1. Anonymous Coward
        Anonymous Coward

        Re: What a rubbish survey

        I'm guessing you didn't read the methodology?

        That says more about your lack of understanding of how surveys work than what the survey tells us.

        1. Anonymous Coward
          Anonymous Coward

          Re: What a rubbish survey

          Last I've heard the survery goes like this: client comes to the company and asks for a survey that proves X. Company designs the survey and selects the participants in such a way that X is the outcome. The client is happy, the company is happy and the general public is baffled.

  6. Steve 39

    Punished if you buy phone from elsewhere

    I always buy my phone outright, usually not from the network operator. Unlocked and free to do what I want with it.

    But Three (and others) are now taking a long time to provide features such as Wifi calling and 800MHz "supervoice" to handsets not bought from them. They've finally done it, 18 months after launching the service to those who bought phones from them.

    iPhones were ok, of course, just Android.

    The solution they offered me over the phone was to spend £630 pounds on the exact same phone, bought from them. No thanks.

    1. Kevin Johnston

      Re: Punished if you buy phone from elsewhere

      Being fortunate enough to already be on a SIM-only deal, when I tried (and failed) to set up Wireless calling with 3 I simply walked rounds the others until I found one who guaranteed it could be done on my phone. The salesdroid in the shop even put in a SIM and logged into their Wifi to demonstrate it on my phone. They got my business.

      1. BebopWeBop Silver badge

        Re: Punished if you buy phone from elsewhere

        3's service although generally very good is still completely shit for calls over wifi (for which they would still charge if I was out of my unlimited miunutes - maybe the key there is that they have no incentive to do it properly)

        1. Anonymous Coward
          Anonymous Coward

          Re: Punished if you buy phone from elsewhere

          I've never heard of this "wireless calling" and looked it up following this thread comments. I read on their site:

          You can call and text whenever you're on Wi-Fi in the UK, even if there’s no mobile signal. You’ll be charged in the same way as normal (...)

          Why would I want to pay THEM for when there's no mobile signal if I were lucky enough to get wifi instead? I would use wifi to call free on whatsapp or skype, or text. Sure, not all my contacts might be able to receive the call their end, but still... It's like they wanted me to pay for petrol where there's no road so I had to take a train instead. No f... way.

          1. Chris 3

            Re: Punished if you buy phone from elsewhere

            > Sure, not all my contacts might be able to receive the call their end

            Well, that's one reason.

            The other is that I suspect the large majority of 3 customers are on all-you-can-eat minute contracts these days, so it simply doesn't matter - the phone switches to Wifi if the cellular connection is dodgy.

          2. David Nash Silver badge

            Re: Punished if you buy phone from elsewhere

            "Why would I want to pay THEM for when there's no mobile signal if I were lucky enough to get wifi instead?"

            I was in the same position as you, wifi calling is new to me. But I believe the point is that it goes over Wifi to 3, who route the call via usual methods. That's why you pay them.

            As you say, you are free to use Skype or WhatsApp if your contacts have those too, and these days probably most people do. Wifi calling has come a bit too late IMHO.

            1. ArrZarr Silver badge

              Re: Punished if you buy phone from elsewhere

              WiFi calling is really handy if you're on call and your home is in a signal blackspot for the company telco.

              It's not a particularly widespread use case, but it's why I have it set up on the company phone.

              1. Anonymous Coward
                Anonymous Coward

                Re: Punished if you buy phone from elsewhere

                Indeed. I can at last use my phone indoors at home, something that was never possible with all the pre-wifi call services. Mind you, texts often take several hours to reach me...

        2. heyrick Silver badge

          Re: Punished if you buy phone from elsewhere

          "if I was out of my unlimited miunutes"

          Am I the only one having difficulty parsing this? How can you be out of "unlimited minutes"? If they can run out, they're not unlimited.

          1. Loud Speaker

            Re: Punished if you buy phone from elsewhere

            Careful research will reveal that "unlimited minutes" are shorter than normal minutes.

            I used to work for a telco where the equipment was configured to provide the user with 6 seconds for every minute he paid for. This was more generous than several competitors.

            Never trust a telco further than you can throw them.

          2. onefang Silver badge

            Re: Punished if you buy phone from elsewhere

            'Am I the only one having difficulty parsing this? How can you be out of "unlimited minutes"? If they can run out, they're not unlimited.'

            This is the telco definition of the word "unlimited", they redefine words sometimes. They also have different meanings for words like "reliable" and "coverage". It's kinda like left pond English v right pond English.

      2. Anonymous Coward
        Anonymous Coward

        Re: 3 and WiFi calling

        I've been using this on '3' ever since it became available. Works a treat at home on my iPhone 7 (bought from a Pawn Brokers) and at a few Coffee Shop chains.

        I've been on a SIM only £11/month rolling contract with them for about 4 years. Never had an issue with their services but it seems that I may be the excetion rather than the norm.

        1. Steve 39

          Re: 3 and WiFi calling

          Good for you. As I said, it affects Android phones on Three not bought from them

          1. Hans 1 Silver badge
            Happy

            Re: 3 and WiFi calling

            Hm, I remember WIFI calling, that got canned in France 6 years ago, when Free mobile (an ISP)

            emerged with a 40Gb data plan, iirc, reduced speed after that, unlimited voice and texts (incl international calls to many countries) for less than 20 quid/month. It is like PAYG, in that you can cancel any month, they initially did not sell phones with it, iirc, but now do ... they do not rip you off as much with the phones.

            This forced the 3 French historical operators to get their act together and stop the price fixing.

            Since 2010 at least, you can get any phone unlocked for free, 6 months after the contract was signed.

            I now enjoy a 100Gb LTE data plan with text and voice to over 100 countries fully comp (International land lines, only) ... so yeah, it is really cool.

            In the UK, the operators are ripping you off!

            What is the best deal in the UK, PAYG or do you have phone-less contracts ?

            From my understanding, UK PAYG data does not roam or is expensive, correct ?

    2. Joe Harrison Silver badge

      Re: Punished if you buy phone from elsewhere

      Three's website says

      "4G Super-Voice doesn't work on other non-Three devices yet however, even if the manufacturer has stated that it's VoLTE compatible. We're working on this, so be sure to check back for updates"

      This is definitely not true; my Xiaomi which I imported from China works fine on Band 20 and shows on the display when it is VoLTE connected.

  7. andy 103

    Customers are (slightly) more savvy and the technology isn't moving as quickly

    The other big reason fewer people are buying new phones - and going for second hand/refurb - is because the technology isn't moving as quickly as it has historically. It's also got to a point where it's more than good enough for the average users needs: Do you really need a camera with greater resolution than on the phone you had last year? I took some photos - which are in large frames in my house - in Tenerife in 2015 on a shitty Lumia 525 and I'm told they look fantastic.

    The con which most people fail to understand is that if you buy a contract phone - you are paying for both the handset and the airtime/data. Many people even today still just let a contract run on afterwards, when the cost of the handset has effectively been paid off and they could be paying 1/3 of their monthly price for what they are actually getting (the airtime/data).

    People are starting to know how to seek good value when it comes to the airtime/data aspect of their phone. I got an email from Virgin the other day which was something like £20/month for 100 GB of data, unlimited mins, etc on SIM only. I'd far rather use that in an older/cheaper phone, than be locked into paying £80/month for 2 years, just to have the latest iPhone with bugger-all data or minutes.

    Essentially people are caring less about the handsets - due to technology of older ones being good enough - and caring more about things like data allowance, which is important for most apps and things people actually want to do with said handset.

Page:

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2019