Time for a windfall tax on cable/phone companies ?

[yorksrob]

We hear a lot from the economic establishment about a wage/inflation spiral, however, have you ever noticed how many cable/mobile phone type contracts now have a clause increasing your bills by the annual inflation rate ?

This is clearly bad for the Nation's economic wellbeing as it leads to higher interest rates and therefore mortgages and damaging the economy. All the while, the various multi-nationals involved get a nice little windfall that for the most part they probably haven't earned. Needless to say, the silence from the great and the good, who are always keen to wax lyrical about wage inflation at every opportunity, is deafening.

Perhaps a windfall tax of some sort when inflation pushes these rates high, might act as a corrective towards this sort of behaviour.

 

[duncanp]

It's not just mobile phone and cable.

My broadband contract says it will increase by inflation PLUS 3.9% EVERY year in March.

It is no use switching providers, as every other company is doing the same thing.

There should be a windfall tax on the thieving little <insert expletive of your choice>

 

[yorksrob]

It's not just mobile phone and cable.

My broadband contract says it will increase by inflation PLUS 3.9% EVERY year in March.

It is no use switching providers, as every other company is doing the same thing.

There should be a windfall tax on the thieving little <insert expletive of your choice>

Glad it's not just me who's noticed this

 

[jfollows]

Mobile phones: it's all a bit of an annoying game, isn't it?
A few years ago I realised I was paying too much, so I switched, and I ended up with £8/month and a reasonable data allowance.
Since then, every second year they increase the price I get annoyed enough to switch again (the first increase I usually live with).
Most recently, Plusnet are stopping their service, and they'd breached my 2-year self-imposed annoyance limit anyway.
So now I'm on £8/month with 20GB data, unlimited calls and texts, far better than my first £8/month contract. O2. I'll change again I'm sure.

Broadband I admit I'm reluctant to switch because of existing reliability, lack of inbound port blocking, things that someone trying to sell me a replacement service won't understand. I’m with BT and I’m happy with the service.

But back to mobile, I'm not convinced how much money they make except from people who stay with the same bad contract for years and keep on paying more. The price of what they offer goes down all the time, it implies to me that it costs them less to offer the same over time, but they love people who pay more and more because of legislation and inertia.

 

[yorksrob]

The problem with switching mobiles is that different networks have different coverage. I've been on one of the snazzier cheaper services before, only to find that I couldn't get any signal in my own house !

They have people over a barrel.

== Doublepost prevention - post automatically merged: 3 Jun 2023 ==

Plus, I'm sick of having to change contracts every five minutes, just to avoid being conned.

 

[jfollows]

The problem with switching mobiles is that different networks have different coverage. I've been on one of the snazzier cheaper services before, only to find that I couldn't get any signal in my own house !

They have people over a barrel.

== Doublepost prevention - post automatically merged: 3 Jun 2023 ==

Plus, I'm sick of having to change contracts every five minutes, just to avoid being conned.

I agree completely.
For me I know that EE and O2 work, and 3 doesn't, so I can buy service from people who use the first two (I don't know whether Vodafone works for me or not). It's important. Keeping track of what actual networks exist and who uses them is part of the pain and the disincentive to switch.
Plus getting the number switched this time was more of a pain than it should have been, I had to ask for it twice before it happened. First world problems I guess.

Historically:
I was paying £24.70/month in 2018, £29/month equivalent today, not a good deal, "unlimited data" but I wasn't using a vast amount so I was paying for something I didn't use
I changed to paying £8/month in 2018, slightly less than £10/month today equivalent
I'm now paying £8/month for a significantly greater monthly data allowance than in 2018.

== Doublepost prevention - post automatically merged: 3 Jun 2023 ==

My problem with switching broadband supplier includes:

1. How reliable is it? BT fibre-to-the-cabinet which I currently have is rock-solid reliable. And pretty much has been since I had ADSL with the green frog about 20 years ago. Is Virgin Media (which I have and use for TV) or someone else as reliable?
2. I run my own mail server, so I don't need the ISP to block traffic on port 25, for example. Do other ISPs do this? Can I find someone who will actually understand my question, let alone answer it?

These two make me reluctant to switch broadband supplier. But for many people the second is completely uninteresting and irrelevant. I suspect that, otherwise, I'd be able to pay a lot less than I currently do.

 

[johncrossley]

The problem with switching mobiles is that different networks have different coverage. I've been on one of the snazzier cheaper services before, only to find that I couldn't get any signal in my own house !

There are only four actual networks and there are cheap providers using one each of them.

Plus, I'm sick of having to change contracts every five minutes, just to avoid being conned.

No need to ever have a mobile phone contract. There are plenty of deals that allow you to cancel straight away with nothing more to pay. Have you looked at https://www.moneysavingexpert.com/cheap-mobile-finder/

 

[GRALISTAIR]

You people really are spoiled. My cellphone bill with T-Mobile is close to $100 per month. I would kill to have your cellphone rates.

 

[johncrossley]

You people really are spoiled. My cellphone bill with T-Mobile is close to $100 per month. I would kill to have your cellphone rates.

What do you get for $100 a month? Are you sure there are no cheaper virtual operators?

 

[GRALISTAIR]

What do you get for $100 a month? Are you sure there are no cheaper virtual operators?

Unlimited data and text messages. International enabled but limited to 2G data rates abroad ( back in the UK for example). I do charge the company I work for $40 per month on my expense report for usage on company business. The downside is my boss and others can contact me when I am on holiday.

 

[yorksrob]

You people really are spoiled. My cellphone bill with T-Mobile is close to $100 per month. I would kill to have your cellphone rates.

That's shocking ! Where is that ?

 

[StKeverne1497]

The problem with switching mobiles is that different networks have different coverage. I've been on one of the snazzier cheaper services before, only to find that I couldn't get any signal in my own house !

Since there are several people in our house with mobile phones and our house is quite good at blocking mobile signals, we try to spread out the networks. We have phones on EE, O2 and 3 (all except one via MVNOs - see below), and I was about to swap one to Vodafone (as VOXI) when the lowest price VOXI could deliver suddenly became twice that of Smarty (3) or GiffGaff (O2). Learned this lesson the hard way on holiday some years ago when everyone was with EE and there was just one place outside the front door of the holiday house where you could get reliable-ish coverage, but we did have "Emergency Calls Only" pop up, implying that other networks were available.

There are four actual radio networks (Mobile Network Operators) in the UK at present - Vodafone, O2, EE and 3. The history is very interesting. Three of those four also operate "captive" MVNOs (Mobile Virtual Network Operators) which offer cheaper service but usually at some compromise such as it being very difficult to speak to a Real Person™ if you have problems, or the service only being available as a pre-paid rolling monthly deal (post-paid deals can be useful under some circumstances). Vodafone's is called VOXI, O2's is GiffGaff and 3's is Smarty. As far as I'm aware, EE doesn't operate its own MVNO.

Other companies whose only connection with the MNOs is as a customer also operate MVNOs, and by far the largest number of these seem to use EE as their partner. Possibly this is because the current EE was formed by the merger of two MNOs, Orange and T-Mobile.

Then there's the complication of the Emergency Services Next Generation Network (or whatever it's called), which is run by EE, partly on existing infrastructure and partly on new. In some out-of-the-way places with no existing mobile coverage, new ESN installations have been cropping up, and many of those are now being extended to include a shared radio service - that is, one transmitter & set of aerials - for the public networks, to run alongside the emergency network.

In some ways this reminds me of an idea I had back in the days when GSM (2G) was new to improve coverage and slow the closure of old-fashioned phone boxes, which many people still relied on. If the POTS line to the phone box was upgraded to ISDN (which can deliver a bidirectional 2×64kbps over much greater distances than ADSL, and anyway this was in the days before ADSL), the phone in the box could be kept and subsidised by a shared low-power transmitter for the mobile networks, filling in some gaps in out-of-the-way places. 128kbps was enough for at least ten simultaneous GSM phone calls, and data wasn't really an issue in those days.

 

[yorksrob]

Since there are several people in our house with mobile phones and our house is quite good at blocking mobile signals, we try to spread out the networks. We have phones on EE, O2 and 3 (all except one via MVNOs - see below), and I was about to swap one to Vodafone (as VOXI) when the lowest price VOXI could deliver suddenly became twice that of Smarty (3) or GiffGaff (O2). Learned this lesson the hard way on holiday some years ago when everyone was with EE and there was just one place outside the front door of the holiday house where you could get reliable-ish coverage, but we did have "Emergency Calls Only" pop up, implying that other networks were available.

There are four actual radio networks (Mobile Network Operators) in the UK at present - Vodafone, O2, EE and 3. The history is very interesting. Three of those four also operate "captive" MVNOs (Mobile Virtual Network Operators) which offer cheaper service but usually at some compromise such as it being very difficult to speak to a Real Person™ if you have problems, or the service only being available as a pre-paid rolling monthly deal (post-paid deals can be useful under some circumstances). Vodafone's is called VOXI, O2's is GiffGaff and 3's is Smarty. As far as I'm aware, EE doesn't operate its own MVNO.

Other companies whose only connection with the MNOs is as a customer also operate MVNOs, and by far the largest number of these seem to use EE as their partner. Possibly this is because the current EE was formed by the merger of two MNOs, Orange and T-Mobile.

Then there's the complication of the Emergency Services Next Generation Network (or whatever it's called), which is run by EE, partly on existing infrastructure and partly on new. In some out-of-the-way places with no existing mobile coverage, new ESN installations have been cropping up, and many of those are now being extended to include a shared radio service - that is, one transmitter & set of aerials - for the public networks, to run alongside the emergency network.

In some ways this reminds me of an idea I had back in the days when GSM (2G) was new to improve coverage and slow the closure of old-fashioned phone boxes, which many people still relied on. If the POTS line to the phone box was upgraded to ISDN (which can deliver a bidirectional 2×64kbps over much greater distances than ADSL, and anyway this was in the days before ADSL), the phone in the box could be kept and subsidised by a shared low-power transmitter for the mobile networks, filling in some gaps in out-of-the-way places. 128kbps was enough for at least ten simultaneous GSM phone calls, and data wasn't really an issue in those days.

Spreading the risk across different networks if you've got multiple family members seems a sensible idea.

== Doublepost prevention - post automatically merged: 3 Jun 2023 ==

There are only four actual networks and there are cheap providers using one each of them.


No need to ever have a mobile phone contract. There are plenty of deals that allow you to cancel straight away with nothing more to pay. Have you looked at https://www.moneysavingexpert.com/cheap-mobile-finder/

I probably ought to.

 

[johncrossley]

Obviously with Wi-Fi calling, reception in the house is almost irrelevant.

 

[Jamiescott1]

I'm with smarty that piggy backs on 3. Its not amazing coverage but good enough. I pay £9 a month for 60gb data and unlimited calls. Also has eu roaming included.
There hasn't been a price raise in 2 years.


Regarding windfall tax, I think better regulation is key. Competition doesn't really control the market as it does in other sectors.

 

[yorksrob]

Regarding windfall tax, I think better regulation is key. Competition doesn't really control the market as it does in other sectors.

I must admit, if that works, it would be preferable as it would keep more pounds in peoples pockets.

 

[simonw]

I'm with smarty that piggy backs on 3. Its not amazing coverage but good enough. I pay £9 a month for 60gb data and unlimited calls. Also has eu roaming included.
There hasn't been a price raise in 2 years.


Regarding windfall tax, I think better regulation is key. Competition doesn't really control the market as it does in other sectors.

The mobile market in the UK is pretty competitive, there are 4 main suppliers and a host of second tier suppklers. Coupled with the 4 main price comparison websites, it's pretty easy to get a competitive deal if you occasional put in a little effort. Same as for most insurance products.

 

[yorksrob]

The mobile market in the UK is pretty competitive, there are 4 main suppliers and a host of second tier suppklers. Coupled with the 4 main price comparison websites, it's pretty easy to get a competitive deal if you occasional put in a little effort. Same as for most insurance products.

But are blatantly inflationary contract terms really acceptable at a time of National strain (or ever), particularly when other inflationary activities are regularly called out ?

 

[simonw]

But are blatantly inflationary contract terms really acceptable at a time of National strain (or ever), particularly when other inflationary activities are regularly called out ?

Well just change suppliers, if your existing one trie s to gouge you. With number portability, it's no big deal.

 

[duncanp]

But are blatantly inflationary contract terms really acceptable at a time of National strain (or ever), particularly when other inflationary activities are regularly called out ?

What really pees me off is when you see adverts from your existing broadband supplier (BT in my case) for superfast broadband at (eg.) £29 per month when I am paying £45 + per month.

The small print of the advert says "..new customers only..."

In other words, they are offering discounted prices to lure in new customers, and then loading the bills of existing customers to pay for it.

I know you can threaten to leave, and they grudgingly give you a discount, but it would be nice if there was some kind of loyalty bonus aimed at keeping existing customers.

And how much longer can they get away with CPI + 3.9% increases every year?

They are relying on the fact that people are so dependent on the internet these days that they will happily pay such increases.

 

[yorksrob]

Well just change suppliers, if your existing one trie s to gouge you. With number portability, it's no big deal.

Maybe personally, but my initial point was the effect of such terms on inflation within the economy. If people aren't shopping around enough and such terms still cause inflationary pressures in the economy, shouldn't they be addressed some other way ?

== Doublepost prevention - post automatically merged: 3 Jun 2023 ==

What really pees me off is when you see adverts from your existing broadband supplier (BT in my case) for superfast broadband at (eg.) £29 per month when I am paying £45 + per month.

The small print of the advert says "..new customers only..."

In other words, they are offering discounted prices to lure in new customers, and then loading the bills of existing customers to pay for it.

I know you can threaten to leave, and they grudgingly give you a discount, but it would be nice if there was some kind of loyalty bonus aimed at keeping existing customers.

And how much longer can they get away with CPI + 3.9% increases every year?

They are relying on the fact that people are so dependent on the internet these days that they will happily pay such increases.

Indeed. When I tried threatening to leave, they point blank refused to offer anything.

 

[simonw]

Maybe personally, but my initial point was the effect of such terms on inflation within the economy. If people aren't shopping around enough and such terms still cause inflationary pressures in the economy, shouldn't they be addressed some other way ?

== Doublepost prevention - post automatically merged: 3 Jun 2023 ==



Indeed. When I tried threatening to leave, they point blank refused to offer anything.

average phone bill, should be at a guess, sub £20. Even at 15% price rise, the overall impact on the cpi is not going to be measurable.

 

[GRALISTAIR]

That's shocking ! Where is that ?

Dalton, GA USA t-mobile

 

[yorksrob]

average phone bill, should be at a guess, sub £20. Even at 15% price rise, the overall impact on the cpi is not going to be measurable.

On the contrary, you only have to read the news to see that some food-stuffs will be pulling on inflation one month, white goods another. In that context, inflationary contract terms have a great potential to tip the balance.

Dalton, GA USA t-mobile

Cheers. I'd have assumed the USA to be hot on this sort of thing.

 

[simonw]

On the contrary, you only have to read the news to see that some food-stuffs will be pulling on inflation one month, white goods another. In that context, inflationary contract terms have a great potential to tip the balance.



Cheers. I'd have assumed the USA to be hot on this sort of thing.

If you did some research before replying you would find that Communications makes up 1.9% of the basket of goods and services that make up the cpi. What percentage of that 1.9% is mobile phones, but even if it was all of it, the overall impact of say a 15% increase in mobile prices would be 1.9% * 15%. This is negligible.

 

[yorksrob]

If you did some research before replying you would find that Communications makes up 1.9% of the basket of goods and services that make up the cpi. What percentage of that 1.9% is mobile phones, but even if it was all of it, the overall impact of say a 15% increase in mobile prices would be 1.9% * 15%. This is negligible.

Well, it's clearly seen as an issue in some quarters:

Mobile and broadband price rises to be investigated

The regulator says price rises are "unclear and unpredictable" as customers face big jumps in charges.

www.bbc.co.uk

Citizens Advice said Ofcom should go further and ban mid-contract price rises altogether.
"Ofcom is right to shine a light on this practice, but consumers need rapid action before inflation-busting price hikes kick in this April," said Matthew Upton, Citizens Advice director of policy.
He said Citizens Advice had found one in three people currently on contracts with rises linked to CPI have never heard of the inflation measure and called for more help in making pricing "crystal clear" for customers.

 

[Trackman]

What really pees me off is when you see adverts from your existing broadband supplier (BT in my case) for superfast broadband at (eg.) £29 per month when I am paying £45 + per month.

The small print of the advert says "..new customers only..."

In other words, they are offering discounted prices to lure in new customers, and then loading the bills of existing customers to pay for it.

I had a go at Virgin media when my contract expired, I could get 'Gig1' broadband for the same price as the same as my 250Mb connection... but oh no.. only for new customers only. So leaving it to the last minute said I would cancel it then re-apply as a new customer; no dice, you have to wait 3 months. I was fuming.

And pretty much has been since I had ADSL with the green frog about 20 years ago

Blimey, I had a green frog too..!

 

[yorksrob]

I had a go at Virgin media when my contract expired, I could get 'Gig1' broadband for the same price as the same as my 250Mb connection... but oh no.. only for new customers only. So leaving it to the last minute said I would cancel it then re-apply as a new customer; no dice, you have to wait 3 months. I was fuming.

Blimey, I had a green frog too..!

Virgin Media seem to be particularly lousy. Wouldn't recommend them to anyone.

 

[Kite159]

Blame Ofcom for forcing the telecom companies to insert "RPI+3.9%" price rises in contracts to avoid people being able to leave penalty free when they increase prices (to 'invest' in the salary of the CEO). Clearly, before this year it wasn't such a big issue as RPI was reasonably low.

As for new customer discounts, step forward Plusnet who offered me on an email saying my 18 month contract was coming to an end, and it will soon jump to £47-odd a month "Here is your best price (in line with Ofcom guidance)
Unlimited Fibre broadband and line rental for £26.99 a month for 18 months". Clearly not the best price because going via the website directly offered me £24.99 a month (clicking the link on the email in a clean browser popped up the £26.99). Even £24.99 could be beaten by switching to Vodafone getting full fibre (rather than just "Fibre to the pole"), although what I felt strange was no phone call from customer services attempting to keep my business.

 

[Trackman]

Virgin Media seem to be particularly lousy. Wouldn't recommend them to anyone.

It's the only fibre devil I know I'm afraid apart going down the telephone line route. We had TalkTalk about 10 years- avoid like the plague. Seriously.