Mobile upgrades

posted earlier this evening to describe his experiences at the hands of T-Mobile customer services, specifically their refusal to let him upgrade his current phone to the G-1.

I’m not that surprised by this, sadly.

and I moved from Orange contract to T-Mobile PAYG earlier this year, mainly because we weren’t using all of our contract allowance, and we wanted something rather cheaper than Talk 50.

A few years ago, we moved from our previous tariffs – the lovely-for-us (but not so great for Orange) Everyday 50 – to Talk 50 in order to upgrade to tri-band handsets. At that time, we were assured that our monthly bills would remain the same, but it was hard to verify this claim, and it proved not to be the case (whether this could be considered a case of mis-selling is another matter entirely). Since then, Orange’s tariffs have become progressively more complex and opaque, to the point where it’s now quite hard to predict a) how much you’re going to be paying each month and b) whether your tariff is the cheapest. I suspect that we would have been offered free upgrades from our current handsets had we asked for them, but only if we’d agreed to move to an even more expensive contract.

As I see it, the mobile phone market has moved a long way since the late 90s. At that time, the market was rapidly expanding and all the mobile operators offered hefty incentives, some explicit (tariffs with plenty of ‘free’ phone calls), some implicit (such as willingness to offer subsidised upgrades in order to retain customers) in order to persuade potential customers that they needed to get a mobile phone and maintain market share. In 2008, we must be pretty close to market saturation in the UK; nearly everyone who wants a mobile has one, so the only way to get new customers is by poaching them from your competitors (while they’re doing the same to you). Offering subsidised upgrades is no longer as cost-effective at increasing market share as it once was.

When you do the maths on handset subsidies for new contracts, the situation is heavily biased in the phone operators’ favour: TANSTAAFL, in other words. If you look at the cost of buying a handset outright (particularly a premium handset) versus the amortised costs over the lifetime of the contract, it’s almost certainly the case that only a fool would accept a deal for a ‘free’ handset that costs more than the handset alone would. The rules on upgrades must be similar to those for new contracts; unless you’re spending significantly more money each month than is necessary for your level of service (the cynic’s definition of a ‘good customer’), you’re not going to be offered a new handset.