Money: A mobile is not just for Christmas ...

Mobile phones are great Christmas gifts for people you don't like. Buy one for as little as pounds 10, and the recipient pays up to pounds 300 a year in line rental charges before making any calls. The mobile phone networks are starting to recognise that not everyone welcomes a present where they pay for most of it. Instead, most operators now offer a deal with a handset, up to a year's airtime and a limited number of "free" calls for one inclusive price of pounds 100-plus.

The latest packages operate on a "pre-pay" basis. Buy a phone in a high- street store and it comes with some airtime, usually a month, and some call credits. The owner can then buy vouchers for more airtime or calls from outlets including Woolworth and the Post Office, or buy extra minutes by credit card.

Retailers expect the packages to be hot Christmas sellers. Pre-pay phones are popular elsewhere in Europe: over a million Italians use them. The phone companies say pre-pay phones give users more control over their finances: just charge up the phone, put in a PIN number, and use it. Buyers know just what a call costs, and as calls are bought in advance there are no unexpected bills.

It sounds like a breakthrough. Consumer groups criticise the mobile phone sector for complicated contracts and charges. But higher call charges mean pre-pay mobiles can cost much more than an ordinary set on a monthly subscription. One2One's pre-pay service, Up2You, charges 50p a minute, regardless of time of day, for ongoing calls. Picking up voice-mail messages costs 10p a minute. One2One's regular service charges 30p for a peak-time call, 12p off-peak. Listening to voicemail is free.

On Orange's Just Talk service, 60 minutes of calls cost pounds 29.38 including VAT for ongoing calls - just under 49p a minute. Orange's Talk 60 costs 20p a minute peak and 10p a minute off-peak.

The networks say pre-pay calls have to cost more as the charges also cover line rental, and that the deals are still good. But this is not always so. An Orange user on Talk 60 pays exactly the same pounds 29.38 for both a month's line rental and 60 minutes of inclusive calls. Beyond that, the monthly subscriber starts to save significant amounts, because of the lower call charges. Phones for pre-pay services cost more, too.

There are other traps.Call credits on One2One expire after 90 days, even if not used. Unless you buy more credits, the phone is cut off, even for incoming calls. Even if you then buy more credits, to get back on line you may have to pay for reconnection.

On Orange, unused credits can also be wiped off, after 30 days for a block of 15 minutes, 60 days for 60 minutes, and 90 days for 200 minutes. But Orange gives incoming calls for up to six months from the last credit's use.

The networks concede that pre-pay phones won't suit everyone. People who want to control spending, and groups that might not pass a credit check are among the target groups."Pre-pay is for people who don't want to put themselves through a credit check or people who don't know how much they are going to need it," says Sarah Taylor, spokeswoman for Orange.Frequent users, and people with good credit ratings, will find lower costs by shopping around, however.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
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.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

SThree: Talent Acquisition Consultant

£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

Recruitment Genius: Experienced Financial Advisers and Paraplanners

Negotiable: Recruitment Genius: This extremely successful and well-established...

Guru Careers: FX Trader / Risk Manager

Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map
Lionel, Patti, Burt and The Who rock Glasto

Lionel, Patti, Burt and The Who rock Glasto

This was the year of 24-carat Golden Oldies
Paris Fashion Week

Paris Fashion Week

Thom Browne's scarecrows offer a rare beacon in commercial offerings
A year of the caliphate:

Isis, a year of the caliphate

Who can defeat the so-called 'Islamic State' – and how?
Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

Marks and Spencer

Can a new team of designers put the spark back into the high-street brand?
'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

'We haven't invaded France'

Italy's Prime Minister 'reclaims' Europe's highest peak
Isis in Kobani: Why we ignore the worst of the massacres

Why do we ignore the worst of the massacres?

The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

Remembering 7/7 ten years on

Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

They’re here to help

We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?