UK telecoms regulator Ofcom is tackling concerns over airtime packages such as bundling the cost of a smartphone and mobile plan together, which can result in consumers continuing to pay the same monthly charge even after their contract has ended.
Mobile Network Operators offer new customers a choice of either taking a SIM-Only plan - that is, you pay for the text/data/calls or mobile broadband plan of your choice, or a bundle with a mobile handset (airtime plan).
The advantage of a bundle is that it enables consumers to spread the cost of their handset and mobile plan across the contract term (12-24 months), which is particularly useful when you have companies, for example Apple, selling new smartphones for well into the obscenely expensive £1,000+ territory.
Consumers will pay more for such bundles, and this can become an issue when you reach the end of your contract term, particularly if you fail to switch your mobile plan to a SIM-only option and find that the operator is still charging. Some operators, such as O2, already offer ways to solve this but others don’t.
Lindsey Fussell, Ofcom’s Consumer Group Director, said that mobile customers should get the best possible deal.
"We’re concerned that people are not told, or cannot tell, exactly what they are paying for. So we are extending our work on behalf of mobile customers to ensure that handset charges are clear and fair – not just when they enter a contract, but also when their minimum period is up.”
Ofcom said that two thirds of Pay-Monthly mobile customers are on a contract that bundles the cost of a handset with the cost of using the phone and they state that “most customers are receiving good value for money”. However, 1.5 million consumers are out of their contract and still paying instalments towards a handset that many have already paid off.
The regulator believes that mobile operators are “not transparent” enough about the respective costs of the handset and airtime, which is something they view as being “unacceptable” because customers cannot tell how much they are paying for the different parts of their deal.
