Hidden costs when buying through a reseller?

nick989

Hi, new here. Last year, I signed up for a 24 month contract for an iPhone with Mobile Phones Direct. It seems that the entire monthly cost appears as the tarrif once it gets to the network (O2). So once April comes around, the 3.9% + RPI is applied to the whole lot, rather than to the actual airtime portion. I think by the time I come to the end of the 24 month contract, the deal price won't seem so good. O2 just say that's my tarrif, even though the actual equivalent tarrif as shown on their website is less than half the cost. Has anyone else experienced this?

JohnReese

nick989 said:

Hi, new here. Last year, I signed up for a 24 month contract for an iPhone with Mobile Phones Direct. It seems that the entire monthly cost appears as the tarrif once it gets to the network (O2). So once April comes around, the 3.9% + RPI is applied to the whole lot, rather than to the actual airtime portion. I think by the time I come to the end of the 24 month contract, the deal price won't seem so good. O2 just say that's my tarrif, even though the actual equivalent tarrif as shown on their website is less than half the cost. Has anyone else experienced this?

Heard of something similar. These days, the "main" networks split their new contracts with a new phone into an "Airtime" and "Device" portion. The Device price remains fixed and the 3.9% and RPI doesn't get applied to that. Whilst the Airtime gets subjected to the increase unless you have a network which offers fixed prices.

The Reseller usually offers a far far better starting price, but yes it's a single price rather than a split bill. So if it's a longer contract, you end up getting the 3.9% and RPI applied to the whole sum which could work out more expensive overall if you added everything up for the whole term.

Usually the Resellers work out much cheaper for SIM only contracts since it's an Airtime contract offered at a better price than the original network. So in that scenario the starting price is lower despite any 3.9% + RPI increase. 

One thing you could try in the future is:
1. Going for the minimum possible "Airtime" tariff to get your new phone interest free from O2. You then get your unlocked phone. 
2. Getting a SIM only contract from any network (which may even be from a Reseller or a provider that uses the same O2 network) that you will actually use in the phone with the required Data you need. This might let you get a fixed price deal at a far lower cost for your Airtime. 

You could also try Tesco Mobile (uses O2) or Lebara (Vodafone) which both do fixed price without any 3.9% + RPI increase at all.