The network or service operators are the BTs of the mobile phone world: they run the equivalent of BT's lines for mobile users. The first mobile phone networks, Cellnet and Vodafone, started in 1985. The telephones were large and expensive, costing several thousand pounds. Monthly subscriptions were high, too: Vodafone charged pounds 25 a month, plus VAT, and calls cost 25p, plus VAT.
Now there are four network operators competing with each other, and prices have come down considerably. Vodafone and Cellnet have been joined by Orange and One 2 One. Technically, there are actually six, not four, networks: Cellnet and Vodafone have each launched digital systems alongside their original analogue networks.
Cellnet and Vodafone use what is called the GSM (Global System for Mobile Communications) standard. Orange and One 2 One use the similar Personal Communications Network (PCN), also known as GSM 1800.
It is still possible to subscribe to an analogue network, and the older systems still cover more of the country, especially in rural areas. The disadvantages include less clear calls, fewer extra services such as text messaging and the chance that someone can eavesdrop.
But coverage on digital networks is already almost as comprehensive. Orange and One 2 One now cover 95 per cent of the country. When they launched, their phones could not be used in large areas of Britain, but coverage is no longer the key issue it once was. This is another reason mobiles are more popular: as Ian Volans of One 2 One puts it, "coverage equates to credibility". However, there are still some blackspots, which is why using a dealer with local knowledge, or a network or shop that offers a money-back guarantee, is a wise precaution.
Each network has its own choices of tariff, with differing combinations of call charges, monthly subscriptions and "free" or included calls. Retailers and other intermediaries might also sell these packages at different costs.
As a result of all this development, the mobile phone business is highly competitive and has its share of questionable practices. Some of the worst excesses, such as contracts that tie people to a network for up to 18 months, have been curtailed by the Office of Fair Trading. The new operators have also made an impact. Orange was the first network to charge by the second, rather than in units of one minute or half a minute.
The cost of owning and using a mobile phone has fallen significantly. In the run-up to Christmas several outlets are offering subscriptions for pounds 12.99 a month, most with some free calls. A good-quality handset costs as little as pounds 20; some shops or mail order companies even give them away.
Smaller, lighter and cheaper handsets have increased the popularity of mobiles. So have tariffs aimed at private, not business, users. There are some very good deals out there, but shopping around is important. The same phone, on the same network, could have quite different running costs, depending on where it is bought.
An anomaly of the mobile phone market is that, until recently, Cellnet and Vodafone were not allowed to sell directly to the public. Instead their services were sold through "airtime providers" such as Call Connections, Talkland and a host of smaller companies. Airtime providers could vary terms and conditions, for example by charging more for connection, or having longer peak hours.
Vodafone and Cellnet now have standard, recommended contracts, and Vodafone has its
own shops. Customer contracts are with Vodafone, rather than an intermediary. Orange and One 2 One users also sign contracts directly with the network. The result should be clearer charges and more consistency.
Competition has also prompted the networks to offer more ways to buy a phone. As well as the standard monthly contract there are packages that bundle a phone, connection, a year's air time and some free calls. Another alternative is a "pay-as-you-go" tariff, where instead of a contract, users buy call time as they need it in vouchers from shops or post offices, or by credit card.
This brings flexibility, but with it, more confusion. Pay-as-you-go tariffs cost far more per minute than standard subscriptions, but as they include line rental, they work out cheaper for some people. For others, it is extra services that make bills mount up. The true cost of a mobile phone should really be measured over a year, and this means reading the small print.
For example, mobile phones offer answering services, but charges vary widely. On the Vodafone 20 tariff, listening to messages costs 35p a minute, peak rate. On Orange it is 7.5p plus VAT, but on One 2 One, it is free. For the times when you prefer not to be contacted, this could make all the difference in overall cost.
q Next week, we look at how to choose a network, where to buy your phone, and making sense of the tariffs and contracts.Reuse content