Should We Have Fixed Price Mobile Contracts?
Published by Steve Litchfield at 11:43 BST, July 4th 2008
Ewan's on a train speeding down from bonnie Scotland but he's still found time to set up a Friday rant. Ewan reckons there's a gap in the market for a network operator to set up a 'no surprises' all inclusive 'flat rate for everything' plan. Your comments welcome, this one could run and run.
How much will your mobile phone bill cost you this month? Or next month? You've probably got a rough idea in your head, but it's never going to be precise. You might decide to spend an hour on the phone to your Aunty Jean in Inverness in the afternoon. You might suddenly need to have a hugely involved conversation with your boss via SMS. Or, bank managers be praised, you might need to go online to check your email while roaming in northern France.
Certainly in the UK and European Union, the regulators are constantly taking a look at the pricing of elements of mobile phone contracts. The deadline for the networks to look at their roaming charges and SMS costs passed at the end of June, and in all likelihood we'll see some EU directive to cut down those portions of the bill in the near future.
But I'm wondering if it would be better to take this a step further. With churn still worryingly high, and as customers bounce around networks looking for the best deals and shaving a pound or so off their 'average' bill, perhaps an innovative mobile provider can grab the bull by the horns and provide a fixed, flat rate, monthly plan.
There are already a few flat rate items you can get on your mobile bill, including data, but what I'm talking about here is a 100%, all the way, flat rate plan. You pop down your forty or fifty pounds a month and everything is covered. You get your calls in that bundle; you get your SMS included; it's a flat rate data plan - in other words, it's a fixed bill in all ways. You get the phone and a modern media connection, and the complete confidence to use it as much or as little as you want.
Sure it might not give a network the variance to make a short term profit on a monthly basis, but I think that handing consumers the confidence of never being surprised by their monthly bill will be a very attractive prospect for people looking for a new contract and those looking to switch contracts. With a contract like that I think I'd be happy to look at an 18 or even 24 month contract.
Okay there are going to be gotchas. You pretty much have to have some definition of fair use in there, but really that should just be set to stop people using it as an always-on tethered connection for their desktops or laptops – say 5GB a month as a 'warning limit?' And you might need to have fair use for foreign calls as well.
The tricky (or should I say profitable?) part of the equation is roaming. Well let's put a fixed price on that as well. How about an additional twenty five pounds a month top up that gives you a month of 'no surprises' roaming from the day you call the help desk (as opposed to a single billing period).
This could certainly have a short term impact on the bottom line of a provider who decides to go with it, but the long term benefits to that carrier in terms of increased subscriber numbers, reduced churn and a big PR boost in the press would seem to make it a winner.
In battle, whoever controls the high ground has a good chance of winning the battle. With so many mobile operators sharing the same ground, maybe it's time for one of them to strike out, get some distance, and make a real difference.
Ewan Spence, All About Symbian, 4 July 2008
Categories: Industry, Editorial Thoughts
Platforms: General
News Discussion
Which it might be good for people on a large wage, I cant see many people wanting to do it. Its much easier to get a feel for your minutes, texts and data usage and just keep within your freebies. And stomach it when you go over.
Its quite a lot like the ISP market. There are those offering flat rate services, but they cost huge amounts extra, and the most popular ones have restrictive caps and are cheaper.
I would even go so far as to say I would pay a bit extra each month to guarantee that there were no surprises...
Oftel seriously need to jump allover that bullsh1t.
Even 0800 numbers get charged way above what they should.
I never ring these numbers from a mobile and it's a good idea to keep saynoto0870 bookedmarked through Google optimiser.
You can even dial the search results direct from the browser, which is very cool indeed.
http://www.google.co.uk/gwt/n?u=http...m%2Fsearch.php
Churn will not be reduced as it will be easier than ever to choose the cheapest operator. The only thing that will happen is a race to the bottom in terms of pricing.
Having a gazillion different pricing schemes is, economically seen, the best way to ensure you make as much money as possible. See http://en.wikipedia.org/wiki/Cournot for the economic theory behind it.
HSDPA data is already only £7.50 per month for those on contracts so the other £40 is virutally limitless unless you talk in your sleep and need someone to hear you.
We live in a complex society where simple solutions will never fit everyone.
And I'm with unregistered. I'm on PAYG. £5 a month for data, £14 to buy 400 texts (which will last me minimum 2 years) and tuppence happenny on calls. So less that £6 a month and I never have to think "oooh, should I call such and such on the mobile or wait 'till I'm at a landline". I just use it when I feel like it.
You cannot introduce a flat rate monthly payment, because some people will just use huge amounts.
And to counter this, theres 2 things that will happen:
1. The price covers this, so it will be well in excess of £100 per month.
2. They is a fair usage policy, or its capped. In which case, its just like all the other contracts you see, except they might not tell you what your limits for calls/texts/data is.
So your either going to be paying so much per month you dont care about charges anyway, or you'll be constantly worried you go over some hidden fair use account.
But the problem is, the subscriber base will decrease, for example, We have one mobile (or sometimes more) for each person... Then it may become "One mobile for each family" or even "One mobile for each appartment"...
I think you can understand, what I am trying to say... ;-)
For example, Me and my 10 friends sharing a room can share the above said 50GBP rent as 5GBP each, and use that as PublicPhone for LOOONG and COSTLIER calls and use personal numbers just for incoming....
;-) In any way that wud be very funny and No operator will have guts to do so, IMHO...
I was stung with a bill for £79 last month and it was a single call which pushed up the bill, a friend had moved to Ireland and I had called him back after we got disconnected.
No warning that the call was expensive, no strange ring tone.
A total flat rate would take away these opportunistic revenues. Sickos
I suppose I could sign up to a cheap contract, but I'd rather have the total freedom that PAYG offers, swapping SIMs and phones at will.
Steve
If I wanted to go international, my options do go down. AT&T does offer an international blackberry plan, $80 a month all inclusive, that includes unlimited international data use. Voice roaming, I think, you will still pay for. Verizon has a similar blackberry plan -- included international data -- on a dual CDMA/GSM blakcberry -- although I think it is $130 a month.
Not to mention EVERY US carrier is now offering UNLIMITED voice minutes for $100 a month.
Greeting from the mobile backwater.....
50/50 ?
A fixed payment for unlimited data - then pay as you go for calls, texts etc.
I would willingly sign up for something like it. I'm on payg. I make some calls and send some texts every month - but would love an unlimited data plan above all else!
s.
Currently I pay $80 for 600 day minutes, unlimited night and weekend minutes, 0 texts, and "unlimited" data (with "free" WiFi hotspot use) on T-Mobile USA. So my bill depends on my texts, which are few.
And I pay $120 for a family plan with 700 day minutes shared, 5000 night and weekend minutes shared, 200 texts per line, and "unlimited" data per line on AT&T wireless.
Any time I do international travel (including Canada) I get voice and text roaming charges from hell (which my employer thankfully covers). And of course that's without any data roaming altogether.
i can say bills and data rates in the uk were a bit high compared to here in the caribbean
once my plan was
5000 minutes unlimited data(yes the real unlimited) for bds 3009(approx 75pounds) and that included 300 free text and 300 free mms.....
so going the uk was a big shock to me
i agree we/you do need one flat all inclusive plan...with real unlimited data
5000 minutes unlimited data 300bds(approx 75pound)
Tell us something new.
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Originally Posted by sturgeon
(There had to be one)
50/50 ? A fixed payment for unlimited data - then pay as you go for calls, texts etc. I would willingly sign up for something like it. I'm on payg. I make some calls and send some texts every month - but would love an unlimited data plan above all else! s. |
my understanding of ewans rant is you pay sum X no matter what you use.
Most contracts in the US are 2 years, where we in the UK, 12 and 18 months are common place. They also have to pay $$$ for a cheapo crappy phones we would laugh at. Razr is STILL so big in the states. Go to a cellphone store and all you'll see the limited range of phones they have... There is not much choice. Either Blackberrys or very old model phones. Most still have to recieve calls...
We get upto £500/$1000 phones for FREE on most £35/40 per month tarriff which included tons of minutes, text and even interenet (on a few) or just pay an additional £5/£7.50 for unlimited data. This is on 12 & 18 months contracts.
You can get a free phone in the states too but guess what they'll give you. The phones we had a decade ago...
Most of the states don't even have 3G which we adopted again over a decade ago.
Correction: Most still have to pay to recieve calls...
my total is a little less than 100 bucks. and there are unlimited everything plans for similar price. but honestly, what else do i need? i talk as much as i need to talk now, without limiting myself. so an everything plan would just be a waste. i use a couple gigabytes of data each month, that's about it. i barely use half my minutes, so i think those unlimited everything plans are just a gimmick for the majority of users except small business people or corporations who send people out in the field using cell constantly.
People seem to pay for price plans that they usually stay within - some people only use a small part of their free minutes for example but don't reduce their plan 'just in case'.
Also, Vodafone and Orange now do plans that allow unlimited something. Like the AAS article about Voda's dicision to include 500mb web access in all plans over £25/month. The article mentions that any plan of £40/month or over can have unlimited texts, landline calls OR voda-voda calls. The same with one of Orange plans that allows either unlimted text, landline or orange-orange calls.
I think this is a good compromise between what Ewan wrote and business need to make a profit.
As a comparison, t-Mobile's flext plans give you a certain amount of credit towards calls/text/mms and you can add the £7.50 unlimited web plan. So on the £25 a month I get £60 credit which can be used against texts,landline and mobile calls.
With all operators now we get charged silly prices for 08xxx numbers (even 0800 - FREE numbers) and even sillier prices for calling within a country you've travelled to - if my wife calls me while we're on holiday in the same country she has to pay more than if she called that country from the UK (using the mobile), and don't ofrget that I'd be charged the roaming rate for receiving the call even though it's originates locally.
Another little point, remember that the monthly rate usually include a payment for the subsidised phone you got when starting the contract.