Loyalty, Not on Your Nelly – Editorial

Loyalty, Not on Your Nelly   Editorial

Today I received my price increases letter from Orange.  It informed me that my tariff will be increasing by 3.3% in the near future.  I have been a customer of Orange for over 5 years and one of my contracts is due an upgrade.

Bearing this in mind I had a look at the Orange shop website and took the screenshot below……

Loyalty, Not on Your Nelly   Editorial

This was taken at 8.05am on 6th March 2013.

It quite clearly seems to be offering a Panther price plan on Orange for new customers priced at the princely sum of £36 per month.

Now it is not the best deal on the market and it is probably not the worst but it is definitely on the Orange website.

Next up are screenshots taken from Carphone Warehouse and Phones 4 U websites respectively, again clearly showing £36pm tariffs on offer for new customers.

Loyalty, Not on Your Nelly   Editorial


Loyalty, Not on Your Nelly   Editorial

So, we have three differing outlets offering a £36 per month Panther tariff for 24 months.

Last week we brought the news that price rises are in the offing for both Orange and T-Mobile contract customers, the second set of price rises in two years.  Both sets were claimed to be due to the rising inflation (incidentally, the inflation figure for the 2012 rises was above 5% whereas 2013’s was just above 3%!)

Neither company are offering customers a way out of their contract due to these rises as they have been judged to be totally legally if somewhat questionable from a moral standpoint.

All pretty standard stuff so far until you start to look at the 2012 price rises.

For someone that took out a £36 per month contact late in 2011 a price increase was put in place meaning that they now pay £37.72 per month.  If you add another 3.3% (this years price rise) you end up paying £38.85 per month – for a contract that was quite clearly agreed to be £36 per month!

The question I have is why are new customers being offered new contracts at £36 per month whilst those (sometimes long suffering) loyal customers still mid way through a contract are paying more?

Why are Orange clearly offering a deal on their website that isn’t really the deal for the length of the contract?

Many time commenter Just Me made exactly the point on our price rises post saying

How come when I look at new tariffs they are cheaper than my current one with the price rises incorporated? I started in 2011 on Orange on a Panther £36, I am currently paying £37:72.

They are going up again so I reckon I’ll be paying the best part of £39, yet the Panther contract I am on is still £36 for new customers? How can this be right? If inflation is calling for price rises, surely this should affect all contracts, old, new and not even taken out yet?

It is a sharp practice to stitch up people tied into a 24 month contract. Yet people who sign up to the exact same contract as a new customer still only pay the previous price, till the next round of price increases of course!

We asked EE and O2 (who raised their prices on 28th February) for a statement or response and whilst EE  have yet to comment an O2 spokesperson said:

We have launched some new tariffs with different options and inclusive bundles for customers.  Tariffs in our current portfolio, that are comparative to those before the increase on 28 February, have had the price changed to reflect the new monthly subscription charges for new customers.

In conclusion, the mobile phone world is a dog eat dog business with networks fighting each other for custom, 4G is about to launch in a big way in the UK across all the major networks and those under the EE umbrella are conspiring to alienate their currently loyal customers whilst almost misleading customers into believing that they will be charged one price then inflicting annual price rises on them.

As I’ve said, I personally have been with Orange for some 5 years but as my contract finishes in the middle of April I have already given them the required notice and will be switching to a network that offers better speeds and better data rates all for a cheaper cost.

I would suggest that I am probably not the first and certainly won’t be the last particularly if the sharp practice of raising prices midway through a contract continues for loyalty is a two way street.

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  • With price rises like these now annual (confirmed by the cynical offer of £1.50 a month to avoid future rises!!), and adhoc speed caps from T-Mobile (EE again) and now Virgin Mobile (who run on, oo, EE), contracts only seem to guarantee to force you to pay for 2 years – nothing else!
    I would love to see a network do what T-Mobile USA are doing, and abandoning contracts. Everything is monthly. To get round the issue of phones being rather expensive, you can add a monthly amount to pay off the phone BUT, and this is key thing, its completely separate from the line rental. So you can sell the phone to pay off that part, and it doesn’t affect your line rental, or keep paying for the phone and move your line rental to another network.

    • That sounds like a great idea. They should try that out here as I would certainly sign up. I’m sick of the networks shafting their customers with price rises, high pricing plans and shoddy customer service.

      I’m on Tmobile and they are doing the same to me. If I was to sign up now i would be paying the prices I paid last year. Will keep a close eye on the prices.

      I switched from O2 expecting the EE speeds to be everything everywhere and they are more like nearly there, getting there!

      It’s usually the fist adaptors of technology that get stung. And now existing customers. No more I tell you!!

      Where has the loyalty gone? There’s no point being loyal to companies anymore especially if they don’t look after you.

      • Don’t forget 4G is opening up this year as well, so its worth checking other networks plans.
        Three are the only ones to really reveal anything yet, but hopefully others will soon.
        I’m happy though-i know that when Three go live (roughly Q3 this year) my town will be covered and 4G will be no extra cost.
        EE wont be covering here till the end of 2014!

  • Josh

    The third screenshot of the Pather price plans definitely says 18months on it, hence why it’s got a lot less allowance!

  • Martin

    Steve, I think the point here is the operators are sending out letters stating that they are having to rise prices due to inflation. If thats the case, how come the contracts they are offering on their websites haven’t gone up for two years? And in some cases you actually get more for your money than you did if you signed up 18 months ago? If inflation is such a bitch, why are EE offering more data on their plans than they were 18 months ago when I signed up?
    I’ve worked out what my new bill will be and it’s £2:08 a month more, I get the same minutes and texts as new customers, but get 250meg less data. And that is via EE. £2:08 isn’t much, but thats 2 inflation rises, yet the price to new customers hasn’t risen at all in that time.
    I’m not disputing the rises, inflation affects everything, I’m disputing why the hell the prices to new customers hasn’t gone up inline, O2 have actually increased their prices by a quid for new customers, so people who signed up before the changes and are affected will be paying the same price as people who sign up now.

    • Anonymous

      Yeah – If anything it’s just dishonesty. By their own admission (by keeping new contract prices static), they are not raising the prices because of inflation – they are raising prices because they can, and because we customers can do nothing about it.

      I’d say the honest way to deal with it would be to raise the prices, but offer you a way out of your contract (i.e. send your phone back if it’s still being paid for in-contract), and allow you to get a new contract elsewhere.

      I’m becoming more of the opinion that contracts just aren’t worth it, and that it’s best to just buy your device offline and either do monthly rolling contracts or PAYG. Thing is, with both of these, they screw you on the data, just so you’re more likely to go for a 24 monther.

      Orange do indeed seem to be the worst for this type of thing too. Vote with your feet people!

      Like most things these days though, loyalty is worth nothing, and you are much better off shopping around at every given opportunity. This goes for every type of insurance, and absolutely anything where you have to ‘sign up’ to something for a given period.

  • Steve

    Just for everybodies FYI.

    T-Mobile raised their prices in line with RPI in May 2012
    Three raised their prices in line with RPI in July 2012
    Vodafone raised their prices in line with RPI in November 2012
    O2 raised their prices in line with RPI in February 2013

    None of them adjusted the contract price for new customers, these increases were only for existing customers. And believe it or not, that’s actually a good thing! By having a turnover of customers continually starting at a lower base (£36 to use your example) that means that every time the RPI increases come in its a percentage of £36. If they raised the base price of tariffs every time, then they would escalate every year. Every year the tariff would get more expensive by between 3% and 5% of its current value. That means that even if RPI stays at 3.3% for arguments sake (which is what you hope for, obviously lower is better) then in 5 years time, Oranges current £36 a month tariff will actually end up having a base price of £40.96 and it would grow and grow every year at the rate of RPI.

    Now i’ll point out that Orange can actually increase the base tariff price by the RPI every quarter if they want to. So lets say the economy does brilliantly and all the governments forecasts are spot on, we would expect an RPI of around 2% (which would be a massive stroke of luck, as it wasn’t even that low before the crash). That means that a base tariff that costs £36 today would cost a new customer in 2018 £53.69.

    Thank god Orange don’t do that!

  • Steve

    WTH? Why have both my comments been deleted?

  • Steve

    I spent time commenting on Coolsmartphone and actually explaining the financial reasoning behind this decision to people and yet my comments get deleted without any explanation? Censoring your readers is poor guys.

    • Anonymous

      I agree – why censor?! I want to know what Steve has to say, even if it is controversial, or you don’t agree with it. Who ever is doing this, please desist.

      • Steve

        Still not sure what I’m supposed to have done wrong. On twitter they say i should grow a set and confront them but they are the ones bad mouthing me and deleting my comments. I just want my original comments reinstated so people can see i didnt do anything wrong.

  • Anonymous

    Looks like Tesco may be the answer (see story earlier) with guarantee of no mid-contract price rises. The businessman in me agrees that if a contract states no price increase for the term of said contract then it doesn’t happen. If there is one then it should be clearly stated and known (not buried in myriad pages of online T&Cs). No wonder the likes of John Lewis, M&S and quite possibly Tesco (with their no increase promise) seems to be preferred: they promise what they’ll deliver and then do it; any issues return the product for full refund. Phone operators need to stop milking the cow and start delivering value for money, less obfuscation and clearer, simpler contracts.

  • Anonymous

    Hi all. I have deleted some comments here which are both personal in nature and abusive towards our authors.

    However, the guys writing for the site do so in their own time for the benefit of the community and we love constructive, funny and informative reaction.

    • Steve

      What did I say that was personal or abusive Gears? All I recall was explaining why Orange don’t do what Simon suggested. I didnt call him any names or swear. Please explain exactly what i said?

  • Sibo666

    I remember in the old days you could reduce your contract to the lowest price they offered if you had been with them a certain amount of time.

    Is this still the case?

  • Stenataar

    Yes – I will be leaving Orange shortly also – they are thieving scoundrels who are laughing at their customers while stealing the clothes off our backs.

    This is an absolute disgrace, should be illegal and the top bosses of Orange should be brought to account.

  • i have just bought the above £36 pound contract which was JUST activated and already i have had a text about the price increase before my first bill