Imagine a world in which you were obliged to let a bank know when you had cleared your mortgage or other bank loan. And unless you actually made contact with them to let them know, they’d keep taking money from you forever with absolutely no comeback for you if and when you realised you’d been paying for a loan you no longer had.
It is absurd right, pretty stupid even?
However, it is something that routinely happens in the telecoms sector and little or nothing is ever done about it – either by us or by those who we might hope will protect us.
Mobile phone contracts that come with a phone as part of the initial deal generally speaking last for a two-year period, with a significant chunk of the monthly tariff over those two years going toward paying for the handset.
But under the terms and conditions of the contract, you own your handset outright once the two years is up. So the monthly cost should fall, right? It doesn’t.
At that point the company can offer you the carrot of a new phone – as long as you agree to sign up to new contract – or you can stick with the phone you have.
If you are happy with your handset but don’t actively contact your provider to arrange a better deal – or switch to a different, cheaper provider – the company will keep charging you whatever was agreed in the initial contract.
Actually, they will most likely charge you more because, over the two years, you will most likely have been hit with two automatically-imposed price hikes by most of the leading providers in Ireland. Virgin Mobile is an exception.
So, if you signed up to a two-year contract with a monthly payment of €60 and continue to pay in full after the contract ends, you are effectively giving the company at least €40 a month for absolutely nothing. And they know it.
Now, €40 a month amounts to the guts of €500 over the course of a year, which is a lot of money. And that is only for one single phone user.
According to admittedly self-interested research published by Sky Mobile to coincide with its arrival in the Irish mobile market a couple of months ago, about 300,000 people in Ireland are overpaying each year.
If all those people are overpaying by that €40 a month, the collective waste every year would come in at an absolutely eye-watering €12 million every single month or €144 million every year.
Under ComReg rules, mobile phone providers “must make you aware that your contract is coming to an end and that you may cancel your current plan. Your provider should also send you ‘best tariff advice’ highlighting the best tariff, price plan or bundle, from your current service provider that suits your needs.”
And that is fine but it does depend on you, the user, reading the correspondence and understanding its significance.
It doesn’t have to be this way. The price of a phone contract could – and perhaps should – automatically drop after two years to reflect what the customer is actually paying for, rather than what they were paying for at the start.
That would require rule changes but, in their absence, there are still things customers can do to save money.
A person with a phone they own outright can hang on to it and request their current provider unlock the device, allowing them to switch to a sim-only plan with another provider or even with their existing one for as little as €15 a month – and sometimes even less than that.
The switching process is not overly complicated, although it is not always free of complications, and you obviously get to hang on to your existing number.
The options are not confined to the main providers that own and manage their own networks but includes virtual providers, including Sky Mobile Clear Mobile, GoMo and Tesco Mobile, all of which piggyback on the main providers’ networks, so the level of coverage should be comparable.
It is just one way consumers can fight back against the rising cost of mobiles. And those costs have climbed substantially in recent years. Earlier this year, many Irish mobile phone users saw their monthly bills jump by close to 10 per cent as a result of a policy rolled out by some of the leading providers which sees the prices they charge linked to inflation – typically increases of 3 per cent plus the consumer price index rate of inflation.
[ The future for mobile phones is here, and Ireland needs to get on boardOpens in new window ]
The change saw many users face double-digit price increases in 2023 and not much less than that in 2024 although, all going well, the price hikes next year should be closer to 5 per cent.
“I have three phone numbers with Vodafone. I have been paying circa €190 a month since April when the bill was increased by a cost-of-living amount,” one reader who contacted The Irish Times said.
Having realised she was out of contract for two of the three handsets and already owned them – one for more than two years – she contacted the company. “My annual bill based on the old tariff would have been €2,280. My calculations for my new annual bill is €1,028, saving €1,062.
That is not the only way to save. Here are some more to consider:
- Make sure you are not overpaying for data. A lot of higher-priced contracts are sold with the promise of huge amounts of data. But unless you are a very heavy user, you are unlikely to exceed the standard amounts on the table. And even if you do use a lot of data, you don’t pay for it when your device is connected to wifi, so unless you are a very heavy user who is always on the move, you probably don’t need a vast amount of high-priced extra data.
- Don’t just look at the deals offered by the main networks including Vodafone, Three, Eir and Virgin Mobile. Virtual providers often offer the best deals and, while getting Tesco to provide you with your mobile phone coverage might sound counterintuitive, they – and all the other virtual providers – just piggyback on the big boys’ networks.
- It is also worth haggling with your current provider several weeks before your contract is due to end. Do your research, work out what the alternatives are and then start the process. If you are getting nowhere with the person you are speaking to, ask to talk to someone in their retention unit; they might be more receptive to your threats to leave.
- No matter who you are with or how much you are paying, do pay attention to roaming charges. Thankfully – because of our friends in Brussels – roaming charges are not the same money-grabbing gouging curse they once were (at least when you are using your phone across the EU) but if you are outside of the EU – or taking a ferry from Ireland to France, for instance – you could still be hit with a savagely high bill if you roam like you’re at home.
- Think hard about insurance. It can cost over €10 a month but if you are prone to breaking or losing your phone, it can be money well spent. Before you sign up, check if the contents insurance you have for your home covers personal possessions as that might give you a safety net of sorts. If you do have specific mobile phone insurance and do change your handset, don’t assume the old policy will cover the new phone. It might not and that could see you paying for insurance on a phone you no longer have.
- We all love shiny new things but while you might really want the latest model Apple or Android phone, getting a handset that is a couple of years old might save you a bundle of money and there is a very good chance you won’t notice the difference.
- Consider buying second-hand. There are a lot of platforms offering refurbished handsets for a whole lot less than they cost new. Just make sure you check the terms and conditions and make sure you have a degree of protection should things go wrong.
- If you do switch provider, make sure you have network coverage. ComReg’s has a coverage checker tool will show you what network covers your area. There is no point in getting the best deal in the world if you can’t make calls or tweak your fantasy football team in your kitchen.
[ Man who spent two days in Monaco received €30,000 data roaming billOpens in new window ]
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