Why are mobile tarrifs so expensive

culmore

Can anyone explain to me why mobiles are so expensive to use. I was in India recently and the cost of a national rate call was something like 1p per minute from a pay as you go tariff. You cannot get anything like that tariff here. Do mobile companies make high profits or is it because of government taxation. or just the cumulative cost of doing business in an expensive country like the UK.


It seems to me that a mobile network is really not that expensive of a network to setup. It seems to me that BTs network should be the more expensive network but I suppose that has largely already been paid for. If I where the mobile companies I would want to kill off competition but at the prices they charge they leave them selves wide open to (internet) IP based protocols such as VOIP, Skype etc grabbing serious market share.

Please deal kindly in your replies to my post!

kai666

Surely though in relative terms a 1p call in India would be expensive for an Indian earning an average of £260 a year. It's only cheap if you go with your western money and make a phone call

I was in Russia last year, and with a russian sim card I could text the Uk for less than 5p, which I thought was really cheap. My girlfriends brother who earns a fraction of what i do thinks it is expensive, and rarely texts his sister in the UK.

why do you think a mobile network is not that expensive to set up? Why would BT's be more expensive? though don't BT piggy back onto one of the other providers hving sold their original network to o2?

But having said that I do agree that some areas of mobile phone costs are a complete rip off. How much does it cost the networks to send a text message? About 1p maybe? Yet they charge up to 12p, and how many thousands are sent a day?!?

culmore

kai666 wrote:

Surely though in relative terms a 1p call in India would be expensive for an Indian earning an average of £260 a year. It's only cheap if you go with your western money and make a phone call

why do you think a mobile network is not that expensive to set up? Why would BT's be more expensive? though don't BT piggy back onto one of the other providers hving sold their original network to o2?

Relative? some of the costs are relative but the masts, switches, s/w, etc will cost more or less the same what ever country u buy them in.

When I referred to BT I was talking about their land line service not O2! Compared to a land line service I think a mobile network is cheap to setup no wires needed to each home!!!!

PBA

culmore wrote:

Relative? some of the costs are relative but the masts, switches, s/w, etc will cost more or less the same what ever country u buy them in.

When I referred to BT I was talking about their land line service not O2! Compared to a land line service I think a mobile network is cheap to setup no wires needed to each home!!!!

The costs of hardware may be the same, but the staffing costs of installing & maintaining that hardware are much lower.

One of the reasons that landline phones are cheaper than mobiles in this country is that Ofcom forces Bt, as the monopoly operator, to let competitors access it's network at cost price. This competition from the likes of Carphone Warehouse or 1899 forces BT to lower their prices as well so everyone benefits. On the other hand, as there are 4 competing mobile networks Ofcom don't see the need to regulate them as tightly. The irony is that if there was only 1 mobile network prices would likely be lower as we'd actually have much more choice of who our calls were routed with.

culmore

PBA wrote:

The costs of hardware may be the same, but the staffing costs of installing & maintaining that hardware are much lower.

PBA yeah the staff are more expensive. But how many engineers does it take to keep a mobile service up and running. not that many i would think. Further the call centers could be moved to India. Okay you would get worse service but I personally would not care if my mobile bill dropped by a significant amount.

So I still don't get it.

Anon

There are significant costs in setting up and maintaining a mobile network - it is not just the hardware but also paying for the licences, commission to retailers, phones (free phones that many people rely on - they aren't free, the networks have had to pay for them and then recoup their costs through the monthly line rental/call costs), promotions, marketing etc. The mobile companies have also significantly over-stretched themselves with paying for the 3g licenses which they will have to recoup somehow.

I agree that the cost appears (is!) expensive per call and text, but when you consider the deals that you can get with texts and minutes, and indeed phones, then overall it works out quite reasonable (e.g. 400 minutes, 100 texts plus a Nokia 6822 for £35 per month - and I get 11 months back in cashback through CPW).

Anon

culmore

Anon wrote:

There are significant costs in setting up and maintaining a mobile network - it is not just the hardware but also paying for the licences, commission to retailers, phones (free phones that many people rely on - they aren't free, the networks have had to pay for them and then recoup their costs through the monthly line rental/call costs), promotions, marketing etc. The mobile companies have also significantly over-stretched themselves with paying for the 3g licenses which they will have to recoup somehow.

I agree that the cost appears (is!) expensive per call and text, but when you consider the deals that you can get with texts and minutes, and indeed phones, then overall it works out quite reasonable (e.g. 400 minutes, 100 texts plus a Nokia 6822 for £35 per month - and I get 11 months back in cashback through CPW).

Anon

hmmm I can see some sense in this Anon thanks.

If they are stuck with these costs then they are wide open (in terms of losing business) to VOIP and WiFi etc...

Old_Gold

Anon wrote:

I agree that the cost appears (is!) expensive per call and text, but when you consider the deals that you can get with texts and minutes, and indeed phones, then overall it works out quite reasonable (e.g. 400 minutes, 100 texts plus a Nokia 6822 for £35 per month - and I get 11 months back in cashback through CPW).

Anon

The reason it is so expensive for some is simple. They pay it. If they did not the networks would have to drop their charges to make it marketable.
Another reason is as yet no network has broken through this barrier and introduced a cheaper tariff. If they did then there would be a change.
Another reason is the deals mostly give free up to the minute phones. Someone has to pay for them so our old ones can go to India so that they only need to pay 1P per min..;)
But the main reason above others is that the calls are so expensive because tightwads like us have found a way to get it near free.:j :j . If we weren't about the others would not have anyone to phone for 35P per minute.

Woby_Tide

I bet India don't have a nation who expects their handsets to be free with every contract or networks that have cashback deals to fund. Now that'd be one way to get prices down in the UK by abolishing free handsets and cashback deals, do you think it will happen?

peterg1965

The cost of mobile calls has actually come down over the years. What is different is that most of the tarriffs tend to be for x-net calls nowadays and therefore the usual price bracket for contracts is £25-£35 wheraeas the 'headline tarriffs' used to be a lot cheaper, but they were generally for off peak calls. I think there are some good deals available at the moment.

mzqa395

In Hong Kong when you pay around 5 pounds you can get 1000 minutes anytime any network on contract. Certain mobile network you do not need tie into 12 month contract