Unlike customers on other mobile networks, Vodafone, EE and Three customers are charged one bundled price for their handset, minutes, texts and data.
Here’s what these three major mobile networks had to say in response to our research:
A spokesman for Vodafone said:
'We offer competitive pricing on both 12 and 24 month contracts which often include a handset as part of the bundle. We’re clear with our customers on when their contract ends – through customer services, their online account and the My Vodafone app.
'We also proactively contact the vast majority of pay monthly customers before their contract ends to discuss the best possible bundle for their future needs.
'At the end of the contractual period customers are able to upgrade and take a new handset or move their contract to a SIM Only plan.'
A spokesperson for EE said:
‘Separating phone and tariff doesn’t always represent the best deal for consumers and can sometimes result in them paying more. EE customers have the flexibility to choose the tariff and upfront phone cost that is right for them, often with better value than tariffs that are separated.’
A Three spokesperson told us:
‘We offer a range of plans which include a handset with different data and call allowances to suit customers’ needs. At the end of their contract, customers can upgrade to a new handset with a new plan, switch to a SIM-only plan where they pay only for airtime and not a handset or move to another operator.
‘We already unlock devices for free and we are looking at developing new contracts which will split out the cost of the handset and the airtime for customers.’
We’re calling on all mobile providers to separate out the cost of the handset so you don’t continue paying for it after your contract ends. So it’s great to hear that Three is looking to offer contracts where these costs are separate. You can help us convince Vodafone and EE to do the same by signing our petition.
Mobile phone owners are collectively shelling out an extra £355m per year for handsets they’ve already paid for.
Our research found that nearly half of mobile owners don’t switch immediately when their contract comes to an end. And since most contracts don't separate the cost of the handset from calls, texts and data, you’ll find yourself paying over the odds for a phone you’ve already paid off.
Collectively we’re overpaying by a total of £355m a year - an average of an extra £92 each.
O2, Virgin Media, Tesco Mobile and Utility Warehouse have tariffs where the handset and airtime costs are separate, while giffgaff has never bundled the handset in. Whereas customers on Vodafone, EE and Three still continue to be charged one bundled price.
For example, a contract with O2 Refresh for an iPhone 6 costs £49 a month for 5GB of data and unlimited minutes and texts. Of this, O2’s clear that the handset is £25, meaning you’ll only pay £24 per month when the contract ends.
On a similar plan with Vodafone (4GB of data and unlimited minutes and texts) it costs £48.50 a month – but that price doesn’t change once you’ve come to the end of your contract. If you don’t switch or change your contract, you’ll keep paying for the phone you’ve already paid off.
Our executive director Richard Lloyd said:
‘Consumers are being misled and as a result are collectively paying millions of pounds each year for a phone they have paid off.’
We’re calling on all mobile providers to separate out the cost of the handset so you don’t continue paying for it after your contract comes to an end. You shouldn’t be handing over money for nothing. If you agree, please sign our petition today.
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