Obfuscation is currently one of my favourite words. It seems to express something that seems to happen in so many circumstances, and it also is one of those few words that you are actually, to some extent, doing by using it.
It also is a word that perfectly sums up the pricing strategies of telecoms companies.
Earlier this year I got so hacked off with changes in BT’s pricing structure that I resolved to find a new supplier when our current contract came to a close. It’s now about that time, and so I’ve been investigating, and also trying to find out if my current supplier will get anywhere near to providing a better offer than that that’s currently on the table.
When you look in detail at the way in which telcos price their services, it’s very difficult to not come to the conclusion that they are implicitly colluding. That’s not the same, of course, as explicitly getting around a table and jointly agreeing how their are going to price things. But nonetheless…
We currently have a fibre broadband connection with unlimited (within fair use guidelines) data transfer per month, and telephone calls on a weekday evening and weekend inclusive tariff. That’s inclusive of geographic numbers, but not mobile numbers or premium rates. Given that both my wife and I work from home a fair bit, we’d like to get unlimited calls at any time. Other than that, we don’t want to change anything (and we don’t want TV services – Freeview and the catch up services we can access through our Samsung SmarTV are fine).
Here’s the breakdown of what’s currently on offer:
|TalkTalk||Sky||Virgin||John Lewis||Plusnet||EE||Primus||BT New customer||Existing BT Cust|
|Total Year 1||£419.40||£411.98||£428.88||£522.00||£479.87||£581.80||£434.75||£479.88||£551.88|
|Total 18 month cost||£629.10||£654.38||£665.82||£783.00||£716.81||£860.20||£650.15||£755.82||£827.82|
|Total contract cost||£629.10||£411.98||£665.82||£522.00||£716.81||£860.20||£650.15||£755.82||£551.88|
|Av monthly cost||£34.95||£34.33||£36.99||£43.50||£39.82||£47.79||£36.12||£41.99||£45.99|
|Contract length||18 months||12 months||18 months||12 months||18 months||18 months||18 months||18 Months||12 months|
|Notes||£20/month basic call allowance||Weekends only basic call allowance||Don’t provide unlimited fibre plans||Discounted to EE mobile customers||Discount is 8/month for 6 months + £60 Sainsbury’s voucher|
Observations as follows:
Most suppliers are now moving to 18 month minimum contracts. That sucks. Most suppliers also no longer give weekend and weekday evening inclusive call deals – they offer weekend calls, or anytime. EE is the most expensive on this comparison, but that’s because you only get a reasonable deal if you also have an EE mobile phone. Finally, on paper, loyalty to a supplier is not rewarded.
Given all of this I decided to give BT a call and see what they could do. After all, the difference between what they were asking for and the cheapest best deal available by shifting supplier was around £140. That call was the very definition of banging a head against a brick wall. Not only was the best that was on offer £7 a month more than we currently pay, but there was frequent talk about how BT were more expensive because they offered greater “value”.
Greater value like having “free” BT Sport. Which I don’t watch. Or having “free” internet security software, which I don’t need because I have a Chromebook. Or “free” wifi which I don’t need because whereever I go these days to work seems to have free “free” wifi. £140 is a lot to pay for things that are free.
Next up I thought I’d test to see if BT’s social networking channels are a bypass to “computer says no” intransigence. The answer these days, it appears, is no. After a Twitter conversation over the course of several days I eventually got a phone call from a chap who put me through to exactly the same sales centre that I spoke to before, to have the exact same meaningless conversation about value.
So a new telco, here we come.
It’s clear today that telephone companies base their pricing on consumer laziness. Retention of customers is not seen as a priority in comparison to luring new ones, because rates of churn obviously mean it’s not worth it.
As information becomes easier to obtain, and methods to switch suppliers easier and more reliable, it will be interesting to see for how long that remains the case. In the banking sector, TSB are already marketing themselves as offering the same rates to existing customers as to new. Ovo Energy is a new brand in the power supply world doing the same. Will we the same emerge at some point in telephones and broadband?