Time for a windfall tax on cable/phone companies ?

[yorksrob]

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.

I've not used them myself I must admit.

My gripe with Virgin is that they seem highly competent at jacking up the price at every opportunity, but not very good at providing the service.

 

[takno]

Most recently, Plusnet are stopping their service

Are they? They haven't told me anything about it...

 

[dgl]

Are they? They haven't told me anything about it...

Nor me but a look on their website it seems that there are special deals with EE if you give them your plusnet mobile number with deals starting from £8, which is more than I currently pay for all I need.

 

[Mcr Warrior]

...Plusnet are stopping their service...

Indeed. As 'confirmed' on the MoneySavingExpert site...

Plusnet Mobile customer? You need to switch provider as it's closing down – here's what you need to know

Plusnet Mobile is closing down in the "coming months", which means all of its customers need to switch provider if they want to keep using their handsets – particularly if they want the same phone number.

www.moneysavingexpert.com

Extract..

The BT Group, which owns mobile network EE and Plusnet Mobile, wouldn't tell us how many customers are impacted by the closure or exactly when their Sims will stop working, but it said customers would "be the first to know".

Also mentioned in "The Sun"...

Major mobile provider with thousands of customers to close - take action now

A MAJOR mobile provider with tens of thousands of customers will close within months. Plusnet, which is part of the BT Group and provides broadband and telecom services to over a million UK custome…

www.thesun.co.uk

Are they? They haven't told me anything about it...

Despite the company's claims to the contrary, customers are often the last to find out!

 

[Jamiescott1]

I often wonder how much business is done in mobile phone shops. The likes of EE, O2 etc have a huge high street presence which must cost a fortune

 

[duncanp]

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

About time too.

CPI + 3.9% is clearly unsustainable in the long term, and doesn't reflect the actual costs faced by the suppliers.

 

[jfollows]

Are they? They haven't told me anything about it...

In an email dated 22 May:

Since the 29th March 2023, we no longer offer mobile services to new customers.​

As an existing customer, your Plusnet plan will continue for now, so don’t worry about loss of service.​

We will be closing all our mobile services in the coming months. This means you’ll need to switch your service to another provider in the future.​

Their email went on to propose switching to EE at £10/month with 10GB data, but I switched to O2 for £8/month with 20GB data instead.
Plusnet was £10.44 (up from £8 originally) monthly with 8GB, but they never seem to have actually implemented the latest price rise, perhaps only on my final bill?

 

[Lost property]

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.

This is far from unique to the suppliers you mention. There are two ways of looking and defining these increases.

The first is the Tory Holy Grail " free market enterprise ! "....for those of us who don't share this avaricious mantra, profiteering and greedflation are far more applicable.

 

[johntea]

I’ve never understood personal users taking out lengthy mobile phone contracts

If you want a fancy phone buy it outright or on a 0% credit card then a 12 month SIM only plan that suits your needs (around November seems the best time for deals)

As the end of the 12 months approaches see what the current provider will offer (perhaps via some negotiations) and if there is a better deal on the market it’s honestly pretty painless to switch over these days

At the moment I’m paying 3 less than £5 a month (after claiming Quidco cashback) for unlimited calls/texts and 100GB or so monthly data

I would of course had loved to stay with EE but they wanted close to 4 times the price for a similar offering, and that’s even considering I technically have a 20% NHS discount available with them!

Same with the banks, I have one primary account with NatWest but then several other accounts I switch around all the time for £200 here, £150 there it all starts to add up very quickly!

 

[StKeverne1497]

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

Not always possible though. Some out of the way places have both poor mobile coverage and poor ADSL. I don't know how good it is these days (experience at home implies "patchy") but WiFi calling used to cause problems with reception of SMS text messages too. I mentioned WiFi calling to a friend, who then spent quite a while trying to activate it on their phone, only to discover that Tesco Mobile's cheaper offerings do not allow WiFi calling, so they had to move contract.

 

[MikeWM]

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>

I'm not sure if a windfall tax is the right solution - I'd rather see the government enforce its laws on anti-competitive activity. The fact that all these companies have suddenly decided to simultaneously impose these (inflation + 3.9%) hikes, all at effectively the same level, is quite clearly due to collusion between the companies, which is illegal. This is one thing the government *should* be doing, as opposed to all the tripe it wastes its time trying to do.

 

[Bletchleyite]

In an email dated 22 May:

Their email went on to propose switching to EE at £10/month with 10GB data, but I switched to O2 for £8/month with 20GB data instead.
Plusnet was £10.44 (up from £8 originally) monthly with 8GB, but they never seem to have actually implemented the latest price rise, perhaps only on my final bill?

Plusnet is a very odd thing to be honest - BT Group competing with themselves. I'm not sure "good honest broadband from BT in London" really works. I know they do have local support teams, but increasingly people see through it, so I can see the brand as a whole being slowly phased out.

I do get that companies often have multiple brands for different markets, but Plusnet is more than that, it's an entire separate operation under BT Group. I suppose they could reduce it to just being a brand selling the same services as BT/EE does, but it looks to me more like it'll phase out of existence as part of BT Group moving the consumer operations under the EE brand.

 

[StKeverne1497]

I technically have a 20% NHS discount available with them!

Watch out for this kind of thing. I was in a main dealer car showroom a few weeks ago and noticed they had a big pop-up banner listing several companies (plus NHS) which were eligible for "special discounts". It turns out that taking advantage of these discounts makes you ineligible for dealer and manufacturer deals on deposits, certain finance deals or option upgrades. When I speculatively asked about a specific model of car, it turned out that taking the NHS discount worked out about the same (possibly slightly more expensive than - I can't really remember) as taking the manufacturer offers.

Work has also introduced a cycle-to-work scheme; buy a bike on "salary sacrifice" and get it significantly cheaper. Cheaper than what? Well, cheaper than the "list price" quoted by the company running the C2W scheme. I looked at their cheapest bike - a mere £270 through the scheme if I remember correctly. Directly from the manufacturer's website with no special financial shenanigans? £250.

 

[Bletchleyite]

Work has also introduced a cycle-to-work scheme; buy a bike on "salary sacrifice" and get it significantly cheaper. Cheaper than what? Well, cheaper than the "list price" quoted by the company running the C2W scheme. I looked at their cheapest bike - a mere £270 through the scheme if I remember correctly. Directly from the manufacturer's website with no special financial shenanigans? £250.

It's a shame they didn't go for a simple approach that one could tax-offset the receipted purchase of a bicycle from any VAT registered supplier. Almost like they were filling the pockets of the scheme providers.

 

[johncrossley]

Not always possible though. Some out of the way places have both poor mobile coverage and poor ADSL.

If you are that out of the way where both types of internet don't work then you probably need to be looking at satellite internet, which is rather expensive at the moment. But this surely only applies to a tiny proportion of households, maybe less than 1%.

 

[WelshBluebird]

Work has also introduced a cycle-to-work scheme; buy a bike on "salary sacrifice" and get it significantly cheaper. Cheaper than what? Well, cheaper than the "list price" quoted by the company running the C2W scheme. I looked at their cheapest bike - a mere £270 through the scheme if I remember correctly. Directly from the manufacturer's website with no special financial shenanigans? £250.

At least my experience a few years ago was that by using the scheme you got a voucher for the amount that you could use in pretty much any bike shop you wanted. You certainly weren't limited by any list price from the scheme.

 

[Broucek]

Most businesses are suffering margin erosion at the moment due to the cost of EVERYTHING going up (energy, people etc.). Mobile contracts are pretty competitive - if some are making excess profits then others will undercut them before much longer

 

[jon0844]

Ofcom allowed the networks to switch to the CPI+nn% formula. The nn% was supposedly to allow further investment (as if the general income from bills wasn't enough) and in return, they'd all offer 30 day and 12 month contracts and 'essentials' plans for poorer users, as well as other incentives (like discounts for NHS etc).

I have no idea how many people are on the low user plans, or if anyone can get one (or need to qualify), but they were very quick to come up with a figure to add on to CPI.. and wouldn't you know it, they all concluded that for their own individual needs it would be 3.9%. I guess 4% sounded too greedy. Cartel anyone?

Ofcom got played.. just as Ofgem got played into allowing service charges to be pretty much whatever an energy supplier wants as long as they offer some help to poorer users.

And as discussed elsewhere, gyms are allowed some rather exceptional T&Cs in contracts by today's standards on consumer protections, because they do offer some people cheap memberships.

Regulators are useless. They try and sound like they're on our side, but they're either in cahoots with the businesses or just tricked. Either way, they're pointless most of the time.

 

[yorksrob]

This is far from unique to the suppliers you mention. There are two ways of looking and defining these increases.

The first is the Tory Holy Grail " free market enterprise ! "....for those of us who don't share this avaricious mantra, profiteering and greedflation are far more applicable.

Indeed. It doesn't seem that much of a "free market" when they're all sticking inflation+ clauses in their contracts.

== Doublepost prevention - post automatically merged: 5 Jun 2023 ==

Ofcom allowed the networks to switch to the CPI+nn% formula. The nn% was supposedly to allow further investment (as if the general income from bills wasn't enough) and in return, they'd all offer 30 day and 12 month contracts and 'essentials' plans for poorer users, as well as other incentives (like discounts for NHS etc).

I have no idea how many people are on the low user plans, or if anyone can get one (or need to qualify), but they were very quick to come up with a figure to add on to CPI.. and wouldn't you know it, they all concluded that for their own individual needs it would be 3.9%. I guess 4% sounded too greedy. Cartel anyone?

Ofcom got played.. just as Ofgem got played into allowing service charges to be pretty much whatever an energy supplier wants as long as they offer some help to poorer users.

And as discussed elsewhere, gyms are allowed some rather exceptional T&Cs in contracts by today's standards on consumer protections, because they do offer some people cheap memberships.

Regulators are useless. They try and sound like they're on our side, but they're either in cahoots with the businesses or just tricked. Either way, they're pointless most of the time.

Ah, thanks for the background !

"We need it for investment don't'y'know".

Reminds me of the money we've all been paying to private water companies to "invest" in not pumping sewage into everywhere.

We seem to specialise in toothless regulators in this country

 

[MikeWM]

Ofcom allowed the networks to switch to the CPI+nn% formula. The nn% was supposedly to allow further investment (as if the general income from bills wasn't enough) and in return, they'd all offer 30 day and 12 month contracts and 'essentials' plans for poorer users, as well as other incentives (like discounts for NHS etc).

Ah, I wasn't aware of that. Another great success for Ofcom! I can't wait until they are given control over what we can see on the internet too, per the Online 'Safety' Bill.

Regulators are useless. They try and sound like they're on our side, but they're either in cahoots with the businesses or just tricked. Either way, they're pointless most of the time.

Yes.

In my opinion, bluntly, things that 'need' regulators should be nationalised, as the regulator is a poor and ineffectual cover-up over the fact that there is, and cannot be, a free or working market, or true competition, in such things.

 

[JamesT]

Ah, I wasn't aware of that. Another great success for Ofcom! I can't wait until they are given control over what we can see on the internet too, per the Online 'Safety' Bill.

In my opinion, bluntly, things that 'need' regulators should be nationalised, as the regulator is a poor and ineffectual cover-up over the fact that there is, and cannot be, a free or working market, or true competition, in such things.

The answer to a bit of government being useless is to have more government involvement? That's an interesting takeaway.

Looking at https://www.which.co.uk/news/article/how-to-avoid-inflation-on-a-mobile-contract-aurHQ5N6wAWb seems to show a selection of operators where you won't have mid contract inflation rises. So to me that shows there is a reasonable level of competition, that you can jump ship and get a better deal.

I suspect the reason they've all settled on 3.9% is that BT went first and so the other companies decided that was a value they could get away with.

 

[jon0844]

I suspect the reason they've all settled on 3.9% is that BT went first and so the other companies decided that was a value they could get away with.

They agree on pretty much all out-of-bundle charges and service charges too. If one goes up, the others do soon after. You'd almost think they meet up regularly to compare notes, especially when some changes can be just days apart.

Voxi, Smarty, Giffgaff and many others don't increase bills but are effectively run as prepaid networks, but with a recurring bundle acting like a pay-monthly 30 day contract*. I have to admit, I've not looked at 30 day contracts from the main networks to see if they have annual increases. Given you can literally cancel at any time (well monthly), you could opt to change plan every month anyway - so it wouldn't make much sense. Plus, they usually charge more per month over a 12 or 24 month contract. If Ofcom didn't require 30 day/12 month contracts, they would clearly ditch them in a heartbeat.

SIM only is frankly the way to go, and always call up to cancel/change contract when it is up, so as not to get stung by the price hike. That is unless you're on a plan that's so good nothing new can compare.

* Some MVNOs offer contracts with phones for a longer term, but these are billed separately and there's no interest or price increases on the handset element.

 

[MikeWM]

The answer to a bit of government being useless is to have more government involvement? That's an interesting takeaway.

Yes, I believe that government should own and operate essential infrastructure and services - that's one of the (few) things it *ought* to be doing, in my opinion. You can't have a proper free market or competition in such things, so I don't see any viable alternative that doesn't leave the customer at the mercy of companies that (understandably) want to charge as much as they can get away with for things that people can't do without. All these regulators and commissions and anti-competition investigations are just papering over the cracks of something that can't work.

 

[yorksrob]

The answer to a bit of government being useless is to have more government involvement? That's an interesting takeaway.

Looking at https://www.which.co.uk/news/article/how-to-avoid-inflation-on-a-mobile-contract-aurHQ5N6wAWb seems to show a selection of operators where you won't have mid contract inflation rises. So to me that shows there is a reasonable level of competition, that you can jump ship and get a better deal.

I suspect the reason they've all settled on 3.9% is that BT went first and so the other companies decided that was a value they could get away with.

Well, it's the private sector who are colluding on prices in the first place, so I don't know who else you expect to intervene !

 

[MotCO]

We seem to specialise in toothless regulators in this country

That seems to be the nub of the problem. Are they funded by the telecoms industry?

Travelwatch anyone?

 

[Broucek]

Mobile telephony is an astonishingly vibrant and fast-moving industry. Do we really think it would have been better under government control?

 

[yorksrob]

That seems to be the nub of the problem. Are they funded by the telecoms industry?

Travelwatch anyone?

I'm not sure about the Telecoms industry.

I was under the impression that Travelwatch was a "roads conversion league" type lobby group.

 

[takno]

Mobile telephony is an astonishingly vibrant and fast-moving industry. Do we really think it would have been better under government control?

It really isn't. It did move fairly quickly in the 90s and early 2000s, but now it's more or less completely commodotised. The vast majority of the innovation coming from UK phone companies is trying to figure out how to slip new and unreasonable charges past their customers and the not-exactly-eagle-eyed regulator

 

[duncanp]

It really isn't. It did move fairly quickly in the 90s and early 2000s, but now it's more or less completely commodotised. The vast majority of the innovation coming from UK phone companies is trying to figure out how to slip new and unreasonable charges past their customers and the not-exactly-eagle-eyed regulator

...or to constantly badger customers into buying the latest smartphone, regardless of whether they really need to, never mind the environmental impact.

 

[jon0844]

...or to constantly badger customers into buying the latest smartphone, regardless of whether they really need to, never mind the environmental impact.

That's just capitalism. Very easy to buy a SIM free device and a SIM only plan, then keep as long as you want without fuss.