Why do we overspend on our phone bills?

Mobile phone networks used to receive bad press for a lack of transparency when it came to the monthly contract price for a mobile phone, as the proportion of the fee which represented the airtime and the contracted handset was often not clear. This became an issue when customers had effectively paid off the handset amount over the period of the contract, and yet networks were found not to be reducing consumers’ bills accordingly. Customers were often unaware of this fact. Indeed, in 2020 Which? reported that Ofcom’s research calculated that out-of-contract customers were paying a collective £182 million a year more than if they switched to a new deal.

While the situation has improved – O2, in particular, split the fee clearly into each segment on their bills – it is always worth keeping an eye on the situation once your contract has come to its end. One option in this situation is to change to a SIM-only deal. If you are happy with the handset and do not wish to upgrade to a newer model, this will result in a considerable saving until you decide to upgrade to a new handset deal. Alternatively, if you do wish to upgrade to a newer model or different tariff, you can always shop around. By checking what other networks and dealers are offering for the particular handset you are interested in, you can see if there are more affordable options elsewhere. Different networks/dealers may offer varying incentives with their deals, such as cashback and free app subscriptions, so it is worth taking these into account too. Finally, there is no harm in haggling or asking the network/dealer if there is any further saving/offer they can make – the old adage rings true: if you don’t ask, you don’t get!

Out of bundle charges

Aside from the contract charges discussed above, on a monthly basis customers incur out of bundle charges for usage which is not included in the terms of the contract that they have signed. Below we discuss some of these charges and suggest ways to reduce the spend in this area.

Data charges

We use our mobile phones more than ever. Social media, health apps, music and video, ‘doomscrolling’, you name it, we can, and do, pretty much do it on our mobile phones. As such, our data usage has increased dramatically. This is especially true given the Covid-19 pandemic which has resulted in us being at home far more and using more data on our home and private devices. Therefore, we have to be careful with our data allowance as it can easily be consumed before the end of the monthly contract period. 

Some networks have offered free extra data or emergency data to tide us over this period of flux, so it may be worth consulting your network/dealer if you find yourself close to, or exceeding, your data allowance. Alternatively, you could consider increasing your data allowance permanently by moving to a larger tariff or even one with unlimited data. If this is something you would prefer not to do, then you could always buy a one-off bolt-on to provide you with extra data allowance for a particular month – this is much more cost effective than being hit with a data overage charge.

Premium text messages/media messages

Media messages (MMS) are for the most part not included in tariffs. The cost for each one varies depending on which network you are with. To avoid incurring costs for these messages, you could purchase a bolt-on to provide you with an MMS allowance, or you could look for one of the latest tariffs where an allowance of MMS is included. Alternatively, you could request a bar on such messages initiated by the network, or you could insist on using an alternative means to send such messages, such as WhatsApp or Telegram. With regards to premium text messages and purchases, these are services which can be purchased or donated to charity through a text message or within an app. By reducing the prevalence of these messages you will be able to reduce your bill too.

International calls

Depending on your tariff and network, the cost of calls to international numbers can vary considerably. The method in which the cost is calculated can also vary: some networks charge per second; others charge per minute. As these calls can be very expensive, international bolt-ons offer a way to decrease your out of bundle spend. Some bolt-ons provide an allowance of international calls (some are destination-specific, so take care), meaning you can make a certain volume of calls per month. However, other bolt-ons merely reduce the price per minute call rate for such calls. Either way, if you are a heavy international caller (or perhaps just a mild caller depending on how much your networks charge), these bolt-ons can be a lifesaver. Moreover, some tariffs have inclusive international minutes, so such a tariff may be worthwhile for you.

Roamed usage

Using your phone when abroad can lead to some shocks when returning home and receiving your phone bill later in the month. We had become accustomed to using our phones when in the EU for free under the guise of ‘Roam Like at Home’. The industry had expected this arrangement to continue even after the Brexit referendum; however, recently some networks have explained that they will be re-introducing some charges later this year. As a result, these decisions may influence your choice in whether to upgrade to a new tariff, whether to switch to a different network, or even to reduce or curtail your usage when roaming.

Away from EU countries, roaming costs vary depending on your network and the destination where you are making the roaming usage. It is a good idea to do your research before you depart, so that you do not receive any shocks when returning home! Again, some tariffs include roaming usage in a range of countries at no extra cost (notwithstanding fair usage policies), thus shopping around may be beneficial.

Get in touch

Here at Porrima we can highlight how your customers are overspending on their phone bills, meaning you can offer them solutions to this problem and have a higher chance of retaining them through your improved customer service. We have designed, developed, and implemented intelligent and sophisticated sales software solutions for telecoms and IT partners of different sizes, from small one-man bands to large businesses in partnership with the UK mobile networks. Our objective here at Porrima is to use our in-depth industry knowledge and technical programming experience to offer a unique product portfolio that will work for you. We want to help you increase your productivity, eliminate the threat of misquoting, free up your sales team, increase your profits and exceed your expectations. Porrima products are free to try, easy to set up and work seamlessly together. Please contact us here where one of our friendly team members can assist you and will respond to your request as soon as possible.

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