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The evolution of mobile tariffs?

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Photo credit: jk5854 (Flickr)

Not that long ago when you wanted a new mobile phone it was a simple process.  You identified a handset you liked, you selected a tariff best suited to your needs and you signed a contract that would tie you to a particular operator for a period of twelve months.  As the years progressed the cost of producing handsets became more expensive.  Operators wouldn’t make any money on the deals they were offering because they were subsidising the handsets so much, the end result saw mobile carriers offering the more desirable handsets either for an additional start up costs (i.e. contribution towards the handset cost upfront) or alternatively, a higher monthly line rental charge (i.e. still paying towards the handset cost but on a pro-rata basis).

Saturation and long term commitment

The mobile marketplace is well and truly saturated.  It’s moving at an extremely fast pace with new and more advanced handsets are being released all of the time.  The modern day “monkey see, monkey want” mentality means people want to upgrade as soon as possible but the complexity of the handsets means their cost to supply is still increasing.  The net result is quite simple, operators charge higher tariffs, making their product seem appealing by offering unlimited text messages and oodles of minutes that the average user won’t make use of.  Not only do they charge these higher tariffs, they also lock their customers into 18 or 24 month contracts, and in some cases 36 month contracts!  I don’t know about you, but given my heavy usage I struggle to get a handset to last one year before it becomes worn out, let alone 3 years and therefore I need to make careful decisions about whatever plan or handset I choose to go with.

“I must have it now!”

Given the aforementioned saturation of the mobile marketplace I firmly believe it can’t be long before the way in which we gain mobile services will change.  I personally am looking at the possibility of buying my own handset whenever I come to require an upgrade, this leaves me better placed to then negotiate a better mobile tariff or jump operator should the need arise without the hassles of being tied to a lengthy contract.  An alternative solution, which I haven’t seen in existence yet, could be a leasing scheme.  This could cater for the heavy user who “must have” the latest handset whenever they are released: they could pay their operator a set fee per month (probably pretty high) and in return the operator will allow them to upgrade every few months.  Not only could the operator cash in on the higher tariffs, such a deal would be long term (e.g. three years) like car leasing.  I suggest this because, let’s face it, how many of us actually change our mobile operator?  I’ve had three carriers in 15 years of mobile ownership.  I spent a long time with Orange UK until their customer service and mobile coverage became non-existent for me before moving to O2, whom I left as soon as possible for they were worse than Orange.  I finally settled down with Vodafone UK, who thankfully have been spot on other than their slightly higher tariffs and lack of unlimited data plans (I guess you get what you pay for!).

Photo credit: alister667 (Flickr)

Consolidating services

I firmly believe that we’ll start to see a consolidation of services being offered in order to make deals more attractive.  I currently have an iPhone and a mobile USB broadband stick.  I managed to broker a deal which got me the data stick for ½ price whilst ever my iPhone’s tariff remains over a certain monthly cost.  With the iPad available in the US and its worldwide release date now set, many consumers purchasing the 3G model will require further data services.  The need is now ever more prevalent for mobile network operators to cash in on getting people signed up to lucrative deals.  Offer a tariff which allows a fixed amount of minutes, texts and data which can be used across any number of one person’s devices.  I don’t need three separate data plans, I need one pool I can draw from and that I can pay for either what I use, or buy a quantity as an allocated monthly quota.

The family plan

This model can be further extended.  Families with children are already finding themselves in a situation where Mum, Dad and kids all have mobile needs.  An ideal solution, where costs are met by the parents of our scenario, is for one big family plan.  Such a tariff could include minutes, texts and data for all the family but with one central bill.  An ability for internal quotas to be set on a device by device basis would be an added bonus; such a consolidation is a win-win situation for both users and providers.  The users get a brilliant deal therefore saving themselves money vs. what their individual plans would cost and providers would be securing an entire families provision (most likely for a tidy sum of money per month).  Furthermore, add into the mix that many people stick with what they are familiar with, brand loyalty can then be instilled into the younger family members meaning when they come to leave home and make decisions of their own, they are more likely to choose a provider with which they are already familiar with.

Your own usage

Are you a heavy mobile user?  Do you wish the mobile marketplace wasn’t so a complex and saturated?  Do you have ideas of your own for a flexible and workable tariff / upgrade scheme?  (Obviously, it has to be financially viable else companies won’t be able to offer it!)  Please share with us your thoughts and experiences in the comments section below.

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  • I'm not a particularly heavy user of minutes and texts, but now that I have an iPhone, I use my data plan extensively! O2 reception has been quite poor, but I love the fact that I have unlimited data. I am disappointed by in large with the cost of contracts over 12 months. I like the idea of leasing, my 3GS is now struggling with it's battery. It causes problems when I'm out and about…I don't know if I can wait another year for an upgrade. Maybe I'll get the 5G or whatever it gets called!

  • Rob

    Out of interest, how much data do you go through in a typical month?

    I ask because whilst I am a heavy user (I don't currently tether though), I was surprised to learn that I'm only using about 300Mb a month which puts me below my current 500Mb pcm allocation.

    I suppose O2's poor reception whilst irritating for their user base, does at least counter their offer of unlimited provisions and protect their network from saturation!

    Have you seen and tried these hand portable chargers? £12 well invested IMHO.
    http://bit.ly/ddCM3R

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