The most common complaint amoung mobile phone customers – neck in neck with dropped calls and language-challenged customer service representatives – is that it is far too costly. While the adverts promise great prices and “unlimited” talk, text, and data allowances, those advertised prices never seem to match the monthly bills users receive. The mobile phone industry apparently applies a different definition to the word “unlimited” than the rest of us do. One American company, Verizon, even went so far as to publish a blog post in April of this year explaining why unlimited plans are unnecessary, even undesirable. Most network providers also play fast and loose with the word “free”, as we’ll discuss in a moment. For the moment, let’s set aside the topics of customer service and dropped calls, and look at some of the ways the network providers make more money off us than we’d prefer.
Most network providers advertise offers of free mobile phones to new or repeat customers, but are those phones really free? In order to get that “free” phone, you commit to a contract, usually two years in duration, under which you will pay a certain amount per month for the service plan that you feel will best serve your needs. At the end of the contract period, the phone is yours, but you also have the option of upgrading to a new phone, often for free or at a price that is discounted from the astronomically high retail cost. You merely have to pay the same or slightly higher fee for the subsequent contract period. It sounds easy and clear, but what if you choose the option of just continuing to use your existing phone? It still works fine, and the battery life is still acceptable, so why change, right? What most people don’t consider is that you will continue paying the same amount on your monthly bill, despite the fact that your mobile phone is now yours. It is not much different from buying a car and continuing to make payments, even though you’ve paid the car off. We would love to assume that our mobile phone service providers are all nice people, but bear in mind that they are in a business that requires them to remain profitable. And while there is no “free” in profit, there are certainly ways to ensure that there is profit in “free”.
Cheap service plans (and the bill shock that too frequently follows)
Consumers are naturally drawn to adverts offering low monthly costs for mobile phone service, particularly when the mobile phone itself is offered for free or at a significantly reduced price. Such offers generally involve the consumer entering into a contract, as noted above. Where many consumers err is in predicting the amount of talk minutes, text messages, and data they will actually use. This shouldn’t be particularly surprising, since few of us are really aware of how much we will actually use, especially where data is concerned. When a consumer underestimates the amount of data that they or their family will use, they will likely find themselves facing a significantly larger bill than they had expected.
The blame for such high bills doesn’t fall entirely on the network provider, either, as many websites – particularly social media sites such as Facebook and Twitter – will automatically refresh on a regular basis. Each time the site refreshes, it sends the update to users who are signed on, even if they are unaware of it. This can add up to a significant amount of data, and the only reliable way to avoid this constant data stream is to not stay signed on to the sites when you aren’t actually using them.
Fortunately for consumers, OfCom provides tips for choosing the data plan that best suits your needs, to help you avoid overestimating your usage and buying a larger plan than you need or, worse still, underestimating your needs and having to pay an inflated price for additional data or talk minutes, the biggest culprit in causing bill shock.
Free service plans
Sometime during the summer of 2015, a new service from a company called FreedomPop will become available in the UK that offers free mobile phone service, including voice, text, and data, to consumers whose usage levels are modest. Users who can get by with 200 mobile minutes, 200 text messages, and 200 MB of available data will likely find FreedomPop to their liking. And for those who occasionally tend to use more data, additional data can be purchased at rates that are highly competitive with the rates charged by other providers.
Of course, the company has to remain profitable, and intends to accomplish that goal by offering attractively-priced premium plans for users whose requirements are significantly greater. But for users who only use their mobile phones occasionally, the free service may well be just what they are looking for.