Wednesday, August 01, 2007

Independent asks are we being ripped off by the mobile companies?

Today's Independent has a two page spread in the hardcopy version of the Paper that talks about the UK mobile industry being the best functioning cartel in Britain.

Among the various data points that it uses to back up just how the consumer is ripped off are the gems:-

  • £1.8Bn worth of mobile calls and texts included in monthly contracts go unused each year.
  • It's 10 times cheaper for Vodafone to connect a call to China Mobile than to connect the same call to the 3 network in the UK.
  • You pay 12 times more to send a text than NASA does to get data from the Hubble space telescope
  • Mobiles with Wi-Fi are a big headache for the networks as users can call for free.

I guess that the technology editor at the Independent is not as good as the old one. Because when you start to read the ten points what you see are a number of plugs for the likes of Vyke; Opera Mini,Uswitch, Rebtel, Fring, Skype, and Truephone. The other issues are that Termination Rates need to be taken into consideration when you start talking about on net and off net calls. When you talk about the cost of a text message please remember that a significant number are bundled into those that are post paid. O2 are ending the i-mode service and so the data price is a mute point.

The reason that I felt the need to blog after a month of not doing so is that what was not talked about is that we are making more calls from our mobiles than ever before. The reason that more and more are going mobile only is that the networks are including too many minutes for the average user to consume, they are working on the principle that a significant number of calls end in telephone tag. As such any money the lose by giving the customer buckets of minutes is more than recovered by people terminating calls on their network. With the reduction of termination rates forced by OFCOM we could see bundles srink, another unintended consequence like the EU cap on roaming rates.

As someone who makes a good living from the mobile industry I do have a vested interest. However I also think that in the last 15 years a significant number of people have benefited from the mobile boom. For example, last year I was talking to a building who said "getting a mobile made a real difference to my life not only did it increase the amount of work I could do it also meant that my wife got a job because I no longer had her staying home just to take messages. I would say that my money tripled because people could call me direct regardless of where I am."

I guess you only feel that your mobile is a rip off if it is not helping make life better, if you are making more money because you have a mobile then its a cost worth paying. As forcartel I think the terms is best left to the Airlines on the basis of the fines handed down today to BA.

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