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Monday, 24 June 2019

Five Things Mobile Phone Networks Don't Want You to Know

Mobile phones seem to cost us more and more every year. In some cases these costs are hidden, or at least not fully explained by networks. Here are five things you need to know before you take out your next contract.

1. 70% of mobile phone users are overpaying 

The vast majority of people are overpaying for their phones. Research by Billmonitor.com revealed that 70% of people are paying hundreds more a year than they need to.

Many people are on the wrong tariff, never using their full allowance of texts and minutes. They are habitually paying for more than they need. But they don’t have to!

Understanding your usage is the first step to getting the right tariff and right price for you. Evaluate your past bills to get an idea of how many minutes, texts and how much data you use each month. Then take this information to a price comparison website to find a deal that exactly suits your needs.

2. Networks routinely overcharge for handsets 


Further research (by both Ofcom and Citizens Advice) has revealed another way in which customers are being overcharged. They found that the major UK networks often continued charging people for handsets they had already paid for.

This happens when a customer forgets to change their deal at the end of their contract. If you took out a fixed term pay-monthly contract with a handset, the cost of that handset is factored into the bill. You effectively pay for the phone over the course of 12 or 24 months. When the contract is up, you continue paying for it unless you contact your provider to renegotiate the monthly cost. However, networks don’t always send reminders to let you know when your contract is up, and all but one (02) don’t automatically move you to a lower monthly payment. So if you happen to forget to switch, you could pay up to £38 a month more than you need to.

To avoid this, make a note of your contract end date on your calendar, and be sure to call around 30 days before the contract ends to sort out an upgrade or a SIM-only deal.

3. Buying a handset outright is usually cheaper


Although the initial outlay can be a little intimidating – especially for the latest devices – buying your phone outright often works out far cheaper than paying for it over the course of a contract. This is because you’re not actually receiving a ‘free’ handset when you take out a contract. As mentioned above, the cost of the phone is factored into your monthly bill, even if you made a small upfront payment.

When you compare the cost of a two-year £30+ a month contract to the outright cost of a phone and SIM-only deal, you’ll often find you can save big. SIM-only deals can be very cheap, with many under £10 a month. There are other benefits too; you’ll have greater flexibility if you choose a deal with rolling one-month terms and the credit check is generally less rigorous than those done for contracts.

4. You don’t need network mobile phone insurance


According to consumer group Which? There are approximately 10 million mobile phone insurance policies in the UK. Phones are expensive... and fragile. So for some people insurance is a must. But you should know that you do not have to take out insurance with your phone provider. In fact, doing so will often cost you more than if you use third-party insurance or self-insure.

You might pay up to £14.99 a month through your network for a policy that has ludicrous exemptions and strict rules, essentially making it worthless. Third-party insures generally offer better prices and more extensive cover, but you still need to carefully read the small print before you sign.

A favourite option among many financially-savvy people is to simply self-insure, putting away a little money each month so they can cover repair or replacement costs if needed.

5. ‘Unlimited’ data often comes with restrictions


Consumers can now take out tariffs with unlimited calls, texts and data – these tariffs are expensive, but perfect for busy people constantly on the go or without Wi-Fi at home. However, unlimited data is rarely as it seems. Although some networks like Three do offer a genuinely unlimited allowance, the majority have a fair use policy which restricts how much can be used and at which speeds. Unfortunately, these restrictions are usually only mentioned in the small print and that can lead to some unexpected charges.

Fortunately, few of us need unlimited data. In the UK, the average monthly data consumption per person is just 1.9GB. Most of us connect to Wi-Fi when we can, preferring to avoid using our data allowance if at all possible. This means the steep prices and unclear restrictions of tariffs with unlimited data are simply unnecessary for many, despite what the networks may tell you.

K Elizabeth xoxox

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