UK MNOs accused of using handset subsidies to rip off their customers

Research from Citizens Advice reckons four million people in the UK are still paying back their phone subsidies after the end of their contracts.

This will come as no surprise to anyone who has reached the end of a postpaid contract that came with a subsidised handset. It’s universally understood that such things are part service contract and part financing on the device, but MNOs are generally deficient in contacting their customers when the contract period is over.

They do get in touch, but usually with misleading offers such as ‘free’ new handsets, when in fact they’re merely calling for the customer to initiate a fresh postpaid contract, complete with a subsidised handset. An honest exchange would also offer a SIM-only deal that would offer far more data for far less money in the absence of a new device.

Citizens Advice specifically calls out EE, Vodafone and Three, implying O2 does a better job on this matter. It reckons these four million mugs are being overcharged, on average, by £22 per month, which seems about right. It also found that most of the time we’re paying more for the handset by getting it subsidised by the operator than if we just bought it on the open market, but there’s no surprise there.

“It is unacceptable that mobile providers are knowingly overcharging customers for phones they already own,” said Gillian Guy, Chief Exec of Citizens Advice. “We’ve heard a lot of talk from government and the regulator but now we need action. Other companies have already stopped doing this so we’re looking for these three major providers to follow suit. In the meantime, consumers should check their phone bills to see if they can save money with a SIM-only contract or upgrade to a new phone.”

Like most studies accusing utilities of ripping off their customers this ultimately comes down to telling them not to be lazy and check their contract every now and then. It’s not difficult to give yourself a reminder to renegotiate your contract when it expires so those who don’t should receive limited sympathy. On the other hand, from an industry that constantly wrings its hands about churn, this is hardly an example of customer service best practice.

Iliad aims to bring French disruption to Italian mobile market

French telco group Iliad has become Italy’s fourth mobile operator and is following the same playbook as it did in France.

Iliad-owned Free Mobile became France’s fourth MNO in 2012 and significantly disrupted the market with an aggressive pricing strategy, leading to much pouting, shrugging and moaning from the three incumbents. The result today is a 17% subscriber share, so Iliad quite reasonably seems to think it’s worth repeating that strategy in Italy.

The brand isn’t Free, or even Libero in Italy, however. The company is simply going for Iliad there, perhaps gambling that the birthplace of the Roman empire will appreciate the classical reference. There seems to have been little fanfare, with the very brief press release pointing hacks towards the Italian language website. Thanks for that Xavier.

The headline deal does seem a very aggressively-priced one. The first million subscribers will get a SIM-only deal that gives 30GB data, unlimited voice minutes and unlimited texts for just €6 per month. That’s so cheap it’s hard to see how Iliad can possibly make any money from it and it will be interesting to see how the company proceeds once it hits that threshold.

The CEO of Iliad Italia, Benedetto Levi, has created a Twitter account to celebrate and apparently intends to use it primarily to pick fights with his competitors a la Legere in the US. Judging by the political turmoil currently taking place in Italy it seems ripe for disruption right now, so we wouldn’t bet against Iliad Italia hitting the million mark pretty quickly.




Which reckons Vodafone sucks, Tutela doesn’t

Consumer advice firm Which has published the results of its UK MNO customer satisfaction survey, which ranks Vodafone last for the second year running.

Which comes up with a customer score that is a combination of stated satisfaction and their likelihood to recommend their operator to a mate. Vodafone got the lowest overall score, followed by EE. O2 and Three did a bit better but among the operators represented by over 100 respondents Giffgaff was the clear winner.

Which operators April 2018

Vodafone sucked even more when it came to recommendations, with less than two thirds of its subscribers saying they would inflict it on their friends. Giffgaff, by contrast, had a 95% recommendation rate. Furthermore 15% of Vodafone customers said they had received an unexpectedly expensive or incorrect bill, and the network was also rated worst for customer service (11%).

Which operator recommendations April 2018

“The biggest providers are lagging behind smaller rivals who are doing a better job of giving customers what they want in terms of service and value for money,” said Alex Neill of Which. “Customers who are fed up should look to switch provider as soon as they can. New reforms will soon mean that mobile customers will be able to switch provider by text message, which we hope will make it quicker and easier for customers to seek a better deal.”

Meanwhile network experience firm Tutela came to some different conclusions in its recent report on the state of the UK MNO scene. It found that the Vodafone network is performing just fine, which leads to the conclusion that Vodafone is being let down by its customer service, even though it was supposed to have put its BSS woes behind it ages ago. Here are some tables from the report.

Tutela UK networks Q1 2018

Tutela UK latency Q1 2018

Tutela UK jitter Q1 2018

Ofcom pats UK MNOs on the head for doing what they’re told

UK mobile operators vowed to hit Ofcom’s 90% geographical voice coverage target by the end of last year and they have. Good operators.

To commemorate this touching gesture of compliance Ofcom has written to each of them to say well done in a manner reminiscent of getting a commendation from a teacher. The specifics of the letters involve acknowledgment of their previous letter claiming to have done what they were told and confirming that Ofcom doesn’t think they were lying.

There are some intriguing variations within those letters, which detail the extent of UK geographical coverage by each MNO and even the date they sent their letter of claimed compliance. As you can see from the table below Vodafone, O2 and Three were all comfortably over the 90% threshold, and send their letters with plenty of time to spare. For EE, however, it seemed to go down to the wire and it just crept over the line at the 11th hour.

UK MNO geographical coverage

Inevitably Ofcom doesn’t want operators to rest on their laurels. There will be a 700 MHz spectrum band auction in 2019, we’re told, and Ofcom is proposing that spectrum should come with rural coverage strings attached. The precise nature of those strings wasn’t detailed but a balance needs to be struck between doing the right thing and turning that spectrum into a chalice, poisoned with onerous obligations.

Lastly Ofcom has published a document entitled ‘Enabling 5G in the UK’, which features a bunch of measures and top-tips designed to, well, enable 5G in the UK. 5G is the next generation of mobile technology, we’re informed, and Ofcom feels an obligation to muck in to the collective effort.

Apart from encouraging everyone with periodic pats on the head, Ofcom wants to make yet more spectrum available for 5G fun. On top of the aforementioned 700 MHz action and the stuff due to be bid on this year, Ofcom also wants to dig up some 3.6-3.8 GHz spectrum for auction in 2019. Apart from that 26 GHz seems to be the targeted millimetre wave band and there are some vague aspirations for 66-71 GHz too.

Ofcom 5G spectrum plans

There are some other initiatives, such as trying to make accessing base station sites easier, helping out with backhaul by stimulating fibre investment, and making sure European net neutrality regulations don’t get in the way of network slicing. On the whole this set of announcements paints a plausible picture of Ofcom being on top of things, which is presumably one of the main reasons for issuing it.