AhmadCentral

Will we see upfront costs on every tariff?

One thing i've noticed in the past few years is that upfront costs have started to return. Usually they've only been on lower tariffs but now networks like Three and T-Mobile and the others have kind of started throwing in upfront costs on high end tariffs for certain handsets.

Do you guys think this will be something we see more of in the future? Networks obviously want to charge upfront costs so that customers have a better chance of getting the contract/so the networks get some money straight up.

Do you think that maybe we'll see a USA pricing structure where there is a set upfront cost for each handset and the tariffs are all the same price?

I really hope networks don't go this way and start sneaking in upfront costs on every tarriff. Especially on low end handsets.

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19 comments

matt101101 / MOD  Apr. 25, 2012 at 21:44

We'll never see a US like pricing structure in the UK simply because the UK networks don't have the absolute stranglehold-like power that the US carriers have over the market. You don't see UK networks rebranding, and in some cases changing the hardware, in phones, for example.

The upfront costs in the UK are simply an attempt to sell high-end phones to people who just want them as a toy or to show off to their mates down the pub, rather than having to have a million minutes and texts every month but having to pay ~£40 every month for two years just to get the phone and ending up with an allowance that they'll never use up. This happens more now as smartphones are almost a fashion accessory (especially the iPhone and to a lesser extent, phones like the Galaxy S2 and the upcoming Galaxy S3).

The US pricing structure for phones is, in short, crap for the consumer. It's an absolute rip off and the stranglehold the carriers have over the market means phones are released late and messed around with, on the other side of the pond. It'd just never wash with consumers, reviewers, tech sites or OFCOM, in the UK.

AhmadCentral  Apr. 25, 2012 at 23:44

Thanks for the great answer.

I do agree with you that we won't see US pricing structure here. What i was getting at was kind of a similar one where all tarriffs would have an upfront cost no matter what.

You're right in saying it allows people to go for cheaper per month tarriffs with a good amount of mins/texts. I hadn't thought of that reason.

Pondlife  Apr. 25, 2012 at 23:59

Weird was sure I saw the One X yesterday without upfront charges on three, but definitely want cash for it now.

matt101101 / MOD  Apr. 26, 2012 at 00:08

The HTC One X can be got for free on a 24 month T-Mobile contract with a monthly charge of £26. That gets you: 300 mins, 5000 texts and 750mb of maximum speed data (with unlimited browsing, the 750mb only counts for streaming and downloading files).

matt101101 / MOD  Apr. 26, 2012 at 00:09

Oh, and there's no charge for going over your data limit, you just get speed capped and you can't DL/stream between 4pm and midnight.

Pondlife  Apr. 26, 2012 at 00:15

Not on t-mobiles website which maybe what AC means, it's £150 upfront on that contract on there! Noticeable difference for sure.

Seems decent deal you've found though.

matt101101 / MOD  Apr. 26, 2012 at 08:00

The deal's here if you'd like to have a look at it :).

matt101101 / MOD  Apr. 26, 2012 at 08:03

Total contract cost is £624.

If you take away £440 for the cost of the phone, that leaves you with £184.

Divide that over 24 months to find the allowance cost per month and it works out at £7.66.

The same allowance on a 12 month SIMO contract from T-Mobile costs £15.50 per month, I've got it on a retention deal at £10 per month...so it really is a pretty good deal. Also, you'd get a nice retention deal at the end of the 24 month contract, in the hope you'll sign up for another 24 months.

AhmadCentral  Apr. 26, 2012 at 09:48

Yeh but Matt I'm talking direct from networks. Not third parties. Good deal though

matt101101 / MOD  Apr. 26, 2012 at 10:07

Who cares who it's bought from, the contract is still directly with the network. Literally it's only the delivery of the phone that's up to the 3rd party to deal with.

AhmadCentral  Apr. 26, 2012 at 10:52

Correct, but my question was more about the actual networks themselves. It's only because i've noticed networks putting upfront costs on certain tarriffs that were never there before.

matt101101 / MOD  Apr. 26, 2012 at 11:49

And my answer is, no. I honestly don't think the networks will force upfront payments on high end contracts, they need to give people an incentive to sign up for 2 years at £40+ per month, a free handset is the perfect incentive.

Pondlife  Apr. 26, 2012 at 12:33

Besides the fact that if they do then more and more people will go for deals like the one Matt linked above. £150 saving on a like for like contract on same network.
There is a perception of security going direct to the network rather than going to a third party I think. I know some of my friends wouldn't even look around, with Virgin mobile being considered an almost exotic choice. Worse is that one went to them after being dissatisfied with tmobile's network. Sigh.

AhmadCentral  Apr. 26, 2012 at 12:41

Besides the fact that if they do then more and more people will go for deals like the one Matt linked above. £150 saving on a like for like contract on same network.
There is a perception of security going direct to the network rather than going to a third party I think. I know some of my friends wouldn't even look around, with Virgin mobile being considered an almost exotic choice. Worse is that one went to them after being dissatisfied with tmobile's network. Sigh.


haha, i remember a friend who was on o2 and said it was crap and then said that giff gaff is much cheaper and better???

But yeh the majority of consumers will always have doubts about whether to go for third party sites. Many consumers just take standard deals they're offered from their network with the perception that its the best deal they can get.

And like i said, many tarriffs now have upfront costs (small and large) and i know that they're selling quite a lot despite the upfront costs. So i do think that maybe in the future upfront costs could become the norm on contracts. And yes that will lead to third party sites getting more custom i think.

Treab  Apr. 30, 2012 at 08:37

haha, i remember a friend who was on o2 and said it was crap and then said that giff gaff is much cheaper and better???

Question- did he buy a new phone? i reckon hes just had a bad phone before...

AhmadCentral  Apr. 30, 2012 at 10:02

I don't think so, he's always had an iPhone as far as I remember.
The only reason he joined because everyone was talking about giff gaff being cheap and giving unl internet at the time.

matt101101 / MOD  Apr. 30, 2012 at 10:13

Does he actually get better reception on GiffGaff: p?

Pondlife  Apr. 30, 2012 at 10:55

He couldn't.

AhmadCentral  Apr. 30, 2012 at 13:05

Exactly. I just think he feels like its brtter because everyone was telling him how much cheaper and better it was.

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