Phoney war, real choices

Thinking of buying a mobile phone? Research the costs carefully, advises Stephen Pritchard

Making a call on a mobile phone is cheaper than on an ordinary line - as long as you are ringing someone in New York. This anomaly is the result of the latest salvo in the mobile phone price war. Last week Orange, one of the four mobile networks, announced new prices for overseas calls from its phones.

A five-minute daytime call to the United States will from Wednesday cost 88p, including VAT, on Orange. BT's standard rate from a home phone is pounds 1.17. The same call on a Vodafone mobile costs pounds 3.99, and pounds 6.46 on Cellnet. A five-minute call to Berlin costs pounds 1.06 on Orange, against pounds 1.42 on BT.

Rival companies question Orange's motives, calling the cuts a "publicity stunt". There is a long way to go before using a mobile phone in Britain is as cheap as a fixed phone: a typical daytime mobile call costs between 20p and 30p a minute, against BT's long-distance rate of 8p.

Even on overseas calls, Orange faces stiff competition from other companies such as AT&T of the US and international call specialists such as Swiftcall and ACC. Swiftcall, for example, charges 14p per minute to the US, against Orange's tariff of 17.6p. Even BT offers discounts through its Friends and Family and PremierLine schemes.

Orange's new tariffs are just the latest in a series of cuts in the costs of mobile phones, as operators fight for market share. Competition in the high street means a subscriber can buy a phone for as little as pounds 10. Three years ago, a similar phone might have cost pounds 200.

Buying the set itself, though, is just the start. Customers have to pay a connection charge, typically pounds 30, and a monthly line rental, which ranges from pounds 17 to pounds 50 depending on network and price plan. Then there are call charges. All the mobile networks now offer tariffs that include some calls in the monthly fee. Anything more has to be paid for, and some calls - to other mobiles, overseas numbers or information services - are usually excluded from the "free" calls.

Buying a mobile phone at the cheap, advertised rates means signing an airtime contract. This is because the networks, or airtime resellers, subsidise the costs of the phones to encourage people to subscribe. If they did not a digital mobile phone would cost anywhere up to pounds 400. In return, the networks demand that you use the service for at least 12 months, and some resellers demand three months' notice to cancel the subscription.

Airtime contracts are also a hiding-place for additional charges. Orange and One2One sell directly to the public, through stores, so their terms and conditions are standardised. Until recently, Vodafone and Cellnet could only sell through a service provider such as BT Mobile or People's Phone (now part of Vodafone). Most phones are still sold that way. Vodafone and Cellnet have recommended prices, but resellers are free to set their own conditions. This might mean longer peak hours, or extra charges for itemised billing, or for not paying by direct debit. Vodafone alone owns six service providers, with 87 different tariffs between them. The company admits that there is "clear scope for rationalisation".

The industry still has some way to go to make buying a mobile phone simple and catch-free. People on the older, analogue networks can pay twice as much as new subscribers to a digital network.

Daunting as it might seem, there is no real alternative to comparing prices in detail. It is also worth thinking carefully about where and when you use your phone before choosing a network or tariff. Cellnet's "Social Life" tariff charges 5p for off-peak calls, making it one of the cheapest networks in the evening. But the daytime charges are a huge 80p per minute. One2One does not charge for accessing its answering service. For some users, this is a real saving; for others, it is irrelevant.

Mobile operators refuse to be drawn on future price cuts. "In terms of our digital offering, there is no change anticipated to these prices," says David Danielli at Vodafone. But for friends, relatives and colleagues of mobile users, there is good news. BT is expected to cut the cost of calling to a mobile next month.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Travel
travelWhy Japan's love hotels are thriving through an economic downturn
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Sport
Joel jumps over the board...and into a giant hole
footballFrom joy to despair in a matter of seconds
News
i100
Arts and Entertainment
Pointless host Alexander Armstrong will voice Danger Mouse on CBBC
tv

Much-loved cartoon character returns - without Sir David Jason

Arts and Entertainment
Meera Syal was a member of the team that created Goodness Gracious Me
tv

Actress to appear in second series of the hugely popular crime drama

Finacial products from our partners
Property search

Two million first-time buyers are locked out

The drought in lending to people with low deposits has created legions of frustrated buyers, writes Emma Lunn

Leaving money to charity in your will could help reduce the tax bill for your loved ones

Next week has been designated "remember a charity in your will week", to put the focus squarely on the subject
Money is slipping through our fingers: the UK is falling behind other countries in the amount we put away

How to save money: UK is crashing down the European league table for putting money away

The UK has slipped to 11th in the latest European league table of savers. Rob Griffin checks out the best options

Energy firms found guilty of bad practice could have licences revoked under Labour government

Caroline Flint, the shadow energy secretary, says a Labour government would create a new energy regulator

A student's guide to financial survival: You don't have to drown in debt at university

Fresh from A-level delight, the moment does not have to be soured by students resigning themselves to thousands of pounds worth of debt in three years' time. Rob Griffin sees how to pass the university challenge

'Dismal' eurozone data sparks concerns

European Central Bank chief Mario Draghi is under pressure to launch promised stimulus before the EU slides further
Love but not marriage: property is one area where cohabiting couples are in danger of losing out

How couples can protect their financial interests when cohabiting

People who simply live together cannot assume they have the same rights to each other's assets as spouses or civil partners. Michelle McGagh sees how they can protect their financial interests

India could be jewel in the crown for investors

With a new government and an ambitious prime minister, the country offers the prospect of strong returns. But there may be hiccups ahead, warns Simon Read
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Audit Manager Central Functions

    To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

    Credit Risk Audit Manager

    Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week