Mobile phone cuts will leave low earners worse off

22 June 2010

"My mobile is pissing coins! SHUT UP!"

This week, the cost of calling a mobile phone will be slashed. However, it won't be without penalty. While the big mobile companies bring costs down for many, there will most likely be a shake-up that will lead to the reintroduction of expiry dates on prepay top-ups.

O2 has apparently warned Ofcom that its proposals are "irresponsible" and could force millions of people on low incomes to abandon their phones with Orange adding that they think the plans are "a backward step". Vodafone meanwhile has claimed that these proposals could see the end of mobile handset subsidies which effectively means that customers will need to pay for new handsets when they sign up or renew a contract.

The Guardian says that Ofcom hopes to save consumers £800m a year from 2015 by reducing mobile termination rates – the price networks charge each other and fixed-line companies such as BT to connect calls – from 4.3p a minute today to just 0.5p by 2015.

BT and 3 teamed up to fight the charges, arguing that mobile termination rates are an unjustifiable subsidy for the mobile phone industry. However, other mobile phone companies are saying that they use these charges to subsidise a service to lower-income customers.

With over half of UK's mobile phone users having a pay-as-you-go phone, many with the sole intention of only having in case they need to get hold of someone in an emergency, the mobile companies say that these charges make them a viable source of income. Under Ofcom's plans, they argue that it would be pointless providing infrequent callers with a phone.

When pre-pay services first appeared in the UK, most prepay vouchers had an expiry date. After complaints from consumers, these limits were scrapped. However, with this loss of revenue, many companies are looking to reintroduce these time-limits.

This will leave people who stuck a tenner on in case of an emergency required to top-up £10 per month or risk disconnection.

TOPICS:   Mobile   Economy


  • M4RKM
    woohoo.. that'll save me money not having to top up my mothers phone, because it ain't worth her having one...
  • andy y.
    Bullshit threats ,it won't happen and you guys just act as a free conduit for Mobile Company misinformation.
  • Tom
    "This will leave people who stuck a tenner on in case of an emergency required to top-up £10 per month or risk disconnection." Hello Telco's ... if you want to make the credits expire, fine ... but introduce lower value top-ups again!
  • Exploited
    This basically does away with PayAsYouGo completely, and changes it to PayUsEveryMonth. So now instead of the aggressive contract salesman, they now want to FORCE everyone into a monthly contract. If you want a mobile phone you'll have to pay them every month to use it. I would seriously consider not using my phone at all if they do this, as I am a very light user. I would just keep my phone for the contact lists, time, stopwatch, calculator - and use a payphone when necessary.
  • GMail U.
    andy of yarm hit the nail on the head.
  • dvdj
    What did people do "in case of an emergency" in the good old days? Or wasn't there emergencies big enough back then?
  • BobF
    Carrier pigeons, semaphore and smoke signals.
  • David
    Particularly with the budget and stuff I'm getting a bit bored of hearing about these low-income earners. Why don't they stop messing about and do a proper job and then they could stop complaining. If they couldn't be bothered to learn at school that's not my problem and I am tired of picking up the bill. Etc.
  • Oli
    David, someone has to serve you in McDonalds at the end of the day lol
  • kev
    if they are "low earners", should they not be more concerned about putting food on the table rather than using their mobiles?
  • Simon W.
    How did we manage without mobiles?? Very well thanks. lol
  • Roger C.
    Eat your fone. I do, it's cheaper than food. yum yum!!
  • Chris
    Why does Ofcom assume that if costs are cut they will be passed on? When does that ever happen? However in a different way this could end up saving costs for consumers. The biggest networks such as T-mobile/Orange raise their prices. Smaller networks such as Three do not(possibly reduce their prices but probably not). Customers start to leave the big networks and join the smaller networks forcing the larger networks to reduce their prices to remain competitive. Or the larger networks will not raise their prices to begin with in order to remain competitive:).
  • Andrew
    There are plenty of contracts that cost less then £10 per month and there are still cashback deals where you pay virtually nothing if you don't take a new phone when you renew.
  • RHMC
    LMAo oli you are so funny i happen to work there 2 days a week whilst completing my law degree getting £10,000 a year including overtime that goes up to £16000 and plus i get a bonus of £3 grand oh oh I'm not done oh no i also get discounts at over 1600 shops get the chance to go to several countries for free and get paid for it hmmmmmm I'm earning money you could of only dreamt off when you were servicing a lib dem politician....
  • -]
    So you are on a low wage, for a shitty job? Sorta backing oli up. Way to go, champ!
  • foxy f.
    I'm sick of these stories about phones, everyday its Orange this, O2 that, Apple OS breaks phones blah blah blah. We want more stories about biscuits.
  • The B.
    Hmmm, I had a bill from Vodafone today, it said "unlimited texts" and then under text and data charges £3.23, curious as my data find't go over 500mb either.
  • FREE B.
    [...] Mobile phone cuts will leave low earners worse off | BitterWallet [...]
  • James D.
    I call shenanigans. I earn a decent wage and I'm on payg where I only use the phone in case of an emergency. I would never give Orange my money on a monthly basis and let them live like Lords.
  • RHMC
    @ -] so tell me when you were 18/19 did you get paid that much for two days worth of work? If i was to go full time I would be on £40,000 a year so yeah that is low wages i would be so poor with £40,000 hmmm way to go Einstein......
  • Orville r.
    if the cunts had decent data rates id get a fecking monthly contract for the hmm 40 minutes of calls I make a month how the f^ck has the type of contract got to do with what you earn - fuck off to your 24 month locked in contracts you you small minded tits
  • Used M.
    Hi there Good post Check out a lot more info around buying used mobile phones.

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