News: 1610535610

  ARM Give a man a fire and he's warm for a day, but set fire to him and he's warm for the rest of his life (Terry Pratchett, Jingo)

UK network Three hikes pay-as-you-go rates by 400% to push punters to buy 'bundles'

(2021/01/13)


Three has announced plans to [1]hike the price of its pay-as-you-go mobile service , with SMS and data prices set to soar by 400 per cent from 16 February. The per-minute cost of making a call, meanwhile, will more than triple.

Under the new rates, the cost of sending a text message rise to 10p from the current price of 2p. The per-megabyte cost of data will increase from 1p to 5p. Calls to UK landlines and mobiles will be charged at a rate of 10p per minute from the current rate of 3p.

[2]

Roaming rates have similarly been hiked. Three says this is merely to keep them in line with domestic costs, and is not related to Brexit, which left Brits unable to benefit from the free EU-wide roaming arrangement.

The cost of calling home from Costa del Sol on Three's PAYG package has been raised to match domestic pricing.

[3]

In a statement to The Register , Three declined to offer an explanation, although said its rates remain "extremely competitive".

As nearly everyone stays home for the pandemic, plunge in overseas charges dents Vodafone's revenues [4]READ MORE

"From 16 February 2021, we're changing our Pay As You Go standard pricing. Our new rates remain extremely competitive in the market, and our customers have access to 5G at no extra cost. Plus, we continue to focus on improving the customer experience through investment in our network, to deliver better connectivity every day for every customer."

For contrast, Vodafone charges 20p per minute for all UK calls made outside of a bundle package. EE charges an incredible 35p per minute, although like Vodafone offers more cost-effective bundles.

Speaking to El Reg , Karen Egan, senior telecoms analyst at Enders Analysis, said this is an industry-wide strategy across the UK mobile sector.

"Operators are keen to encourage customers to pay a little bit more but get a whole lot more in their package – known as the 'more for more' strategy. By increasing the price of PAYG they are encouraging subscribers to take a subscription which should be a win for both the operator (who gets a bit more money) and subscriber (who gets a whole lot more data). Those subscriptions don't need to be a long-term commitment – even 30-day bundles are much more attractively priced."

Three is no exception here, with PAYG customers pushed towards a handful of bundles, the cheapest including unlimited minutes and texts, as well as 6GB of data, for £10.

"There is also growing consensus that prices, and hence returns, in the sector are too low," Egan added. "Although we've seen phenomenal growth in data usage over the past few years, revenues for the mobile operators are 5 per cent lower than they were nine years ago and they're facing mounting costs in the meantime for upgrading their networks for all of this extra capacity, particularly to 5G and with the added costs of new spectrum and more expensive equipment thanks to the [5]Huawei ban ."

Helen Knapman, assistant news and features editor at MoneySavingExpert.com, said: "It'd be no surprise if Three's pay-as-you-go mobile customers are unhappy about its mammoth price hikes to make calls, send texts and use data both in the UK and overseas. But the good news is these customers are free to ditch and switch at any point, penalty-free.

"If you're not loyal to your provider, there are currently some top deals elsewhere to consider that beat Three. For example, some charge just 1p for each minute, text and MB of data you use. Alternatively, more regular phone users can benefit from a bundle, where you'll have an allowance to use each month - but no contractual ties - for as little as £5 a month."

Hiking prices and pushing customers to more expensive packages is an obvious way to help fatten bottom lines, especially given the turmoil faced by the telecoms industry.

Still, there's a human cost to this. PAYG products are often used by older and lower-income consumers. They may lack the ability to obtain a monthly or SIM-only contract for financial reasons. Obtaining a bundle may prove challenging for older users, particularly those without access to the internet. It's these people who will end up shouldering the burden of these price rises, and it comes at a time when connectivity has never been more important.

[6]

Times like these remind us of Terry Pratchett's [7]Boots theory of socio-economic unfairness . "It's expensive to be poor." ®

Get our [8]Tech Resources



[1] http://www.three.co.uk/payg-pricing1-2021

[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/networks&sz=300x250&tile=2&c=2X-8nJkQX9Hfkv@jk@uMJZwAAAFU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/networks&sz=300x250%7C300x252%7C300x600&tile=3&c=33X-8nJkQX9Hfkv@jk@uMJZwAAAFU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dtop%26test%3D0

[4] https://www.theregister.com/2020/11/16/vodafone_half_year_results/

[5] https://www.theregister.com/2020/07/14/huawei_ban_uk/

[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_datacentre/networks&sz=300x100%7C300x250%7C300x251&tile=4&c=44X-8nJkQX9Hfkv@jk@uMJZwAAAFU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[7] https://moneywise.com/a/boots-theory-of-socioeconomic-unfairness

[8] https://whitepapers.theregister.com/

Time for a complaint to Ofcom

Duncan Macdonald

Increases in phone rates should be limited to RPI (at most) or CPI - there is no justification for these increases except that they have no effective competition.

(Possibly also a reference to the competition and markets authority would be in order.)

There has been no real increase in the costs to the telecom operators for texts and basic phone calls - this is pure price gouging.

They have a a large amount of active competition...

goldcd

The issue with mobile operators, is that their main costs aren't actually related to you using the service.

If I had to wildly guess is might be pandemic related, with all of us sat near our WiFi more.

If you pay for a bundle, you've just used less of it. If you're paying per MB of data, then you'll have been using less, paying your operator less - and this less doesn't come close to offsetting the cost of them not carrying that MB.

Re: Time for a complaint to Ofcom

AMBxx

Inflation is just the weighted average price change of 'everything'. No particular reason anything should be linked to it other than income/benefits.

Leads to the next question - why should mobile prices be increasing at all?

Main problem is lack of competition. That said, GiffGaff is just £6 per month for unlimited calls. There are other minor networks offering a load of data for £8 per month. Just need to look around.

Re: Time for a complaint to Ofcom

Anonymous Coward

"There has been no real increase in the costs to the telecom operators for texts and basic phone calls"

Please share your method for replacing all Huawei kit at zero cost.

Re: Time for a complaint to Ofcom

Steve K

Sheets of sticky labels....?

Re: Time for a complaint to Ofcom

Steve 53

I think that's reasonable on contract, but I don't think that's really necessary for PAYG contracts. I'm on three PAYG as my work SIM does most of the heavy lifting, and I'm rather annoyed by the increases, but I'm free to go wherever I want.

I would prefer if they were obliged to refund any outstanding call credit though. That aspect does feel unreasonable, even if it's only a fiver

Three,

Anonymous Coward

two, one ...

and I'm gone, as soon as my payg credit runs out. Which, I assume, will be rather more quickly than I had anticipated.

Re: Three,

Anonymous Coward

Me too.

Re: Three,

chrisb123

Me three. Planning switch to 1pmobile.

Re: Three,

John Robson

They look like a good option for two of my three devices.

Just the one other to look at - of I could not have a SIM in it I suppose.

Re: Three,

John Robson

I've got three devices which will lose their Three based connections...

It was nice whilst it lasted - but it's not a sustainable price for those devices. Don't know where I'll go for a cheap connection now :(

Yes - I know where I'll go to *look*, but that's a different matter.

"which left Brits unable to benefit from the free EU-wide roaming"

Anonymous Coward

There is no legal right to free EU-wide roaming, but Three and (I think) all other major players have no plans to introduce roaming charges. Three also had no roaming charges well before the EU mandated they should go.

Re: Three also had no ...

Anonymous Coward

They also had reasonable call and data rates on PAYG. Had. Clearly, the style of their past decisions is not, it appears, binding on their current or future ones.

Knock on effects.

Wellyboot

5p per Meg = £50.00 per Gig, one or two over the air app updates will cost more than a monthly contract, they're simply out to kill PAYG.

Free roaming, that's moved from mandated by regulation to merely a selling point, when we get around to actually roaming again it may become an important point for the PAYG crowd but I doubt it and I would posit that being able to roam requires far more available cash than a monthly plan with it built in.

I see the Boots theory in operation regularly, it's almost impossible to climb out of that particular gravity well as almost any unexpected expense has an impact out of proportion to its actual value.

Re: Knock on effects.

tony72

As the article points out, three are still cheap compared to a lot of the competition, so I don't know if "killing off PAYG" is fair.

Tbh I'm more surprised by how cheap PAYG had gotten, when did that happen? It's not that long ago I was on a plan that charged £5 per MB for data off-bundle, never mind 5p. I suspect even on-bundle dats cost more than 5p, I just avoided using data at all costs.

Franco

I left 3 some time ago because they kept putting the (contract) prices up and recommending much more expensive contracts than they one I was on as a replacement, rather than recommending the new equivalent of my plan.

Switched to iD mobile (they are a 3 MVNO, so knew exactly the coverage I could expect) and pay £6 a month for a much better package than I had with 3 at a lower price.

Wouldn't be surprised though if 3 aren't the last ones to put prices up, although 400% is ridiculous.

Charlie Clark

I assume we can expect wholesale prices, which the MVNOs depend on, to rise as well.

Steve 53

Unlikely, this sort of BS happens far less often at the MVNO end of the market.

John Robson

"although 400% is ridiculous."

Well, when the smallest possible increase is 100%.... some context is useful, it takes them from being comfortably the cheapest of the big providers to "meh".

Unfortunately "meh" is more expensive than a contract for many many people.

PAYG customers pushed towards a handful of bundles

Anonymous Coward

I got text from three yesterday morning. Yes, it pissed me off big time, because I am one of those poor. On the other hand, I've been there before, with BT and their landline rip off charges. I ditched landline and never looked back. I won't be blackmailed into (...) bundles, so Three UK will get literally nothing from me now, and I will find some alternative provider. I usually do calls via skype and others anyway.

PAYG is no longer PAYG

joe bloggs 6

I have had the family on 3 PAYG for some time coz it has been cost effective and works for us.

Looking out there no it strikes me PAYG is no longer PAYG as I understand it - pay for what you use.

The PAYG deals out there now in my view are effectively 30 day contracts as you have to pay a monthly fee and each month you usage is reset.

So if you dont use the phone for a month...you still pay your monthly fee....

Smacks of greedy comms companies to me!

Re: Smacks of greedy comms companies to me!

Pascal Monett

Are there any other kind ?

Re: Smacks of greedy comms companies to me!

joe bloggs 6

Hmmm ...let me think about that.

Thought about it

None!

Re: PAYG is no longer PAYG

I am the liquor

You can still do normal PAYG, you don't have to buy the 1-month bundles/add-ons. Your cost per minute will be higher now if you're on 3, but you can still choose to pay just for what you use, subject to a minimum usage level of one chargeable event per 180 days to keep it alive.

Re: PAYG is no longer PAYG

BenDwire

And that's what my Three SIM is used for - a contact number for delivery drivers and other non-descripts. Having a phone with 2 SIMs comes in handy, and as long as they haven't changed the 180day period I won't be too badly affected.

A 400% rise in one go is a bit steep though?

Anonymous Coward

Sadly the energy industry is the same, if you're on payg you get to pay the most for your energy. I think its criminal. It is interesting that there's supposed to be competition, but it always looks like the companies are colluding on their pricing as they're all just a little too similar in their offering.

Anonymous Coward

But there are costs associated with running the network, upgrades, replacements, etc. that need to be covered. If someone has PAYG and only uses it to make a few calls a year, then there is very little going towards to costs of providing the service.

However, the people who are hit unfairly are those who can't get a contract (often due to having a poor credit rating) but who do use the services regularly.

Maybe not

nematoad

"If you're not loyal to your provider, there are currently some top deals elsewhere..."

What happens, if like me, you have no choice in provider?

Where I live we only have one provider. In this case EE. Which to be fair does seem to have a better coverage than the others, but if we are dissatisfied with them what alternative is there?

No, sometimes it seems you just have to put up with what you can get. And just pay the price.

Re: Maybe not

080

"In this case EE. Which to be fair does seem to have a better coverage than the others, but if we are dissatisfied with them what alternative is there?"

Plusnet, owned by BT but cheaper.

Re: Maybe not

nematoad

"Plusnet, owned by BT but cheaper."

Sigh.

We can only get a signal from EE, it's due to being in a radio shadow. Believe me if we had an alternative people here might move, but we can't.

Re: Maybe not

John Robson

There are EE MVNOs

Pity you can't buy non expiring data in sensible sizes

BinkyTheMagicPaperclip

Looking at giffgaff, payg is only viable for a few hundred mb of data. Looking to implement automatic mobile fallback for data for the rare instances where my connection goes down, and to be certain it stays up and you don't run out of credit, it basically means buying a bundle.

Re: Pity you can't buy non expiring data in sensible sizes

Elii

Three actually do a free 200mb/month mobile broadband SIM. Might be good for you! https://www.three.co.uk/Free_SIM_MBB/Order

Re: Pity you can't buy non expiring data in sensible sizes

mark l 2

I am registered for the Three free 200Mb a month bundle to use as a PAYG mobile. I like it because the credit doesn't expire and I topped up around £20 all last year and still have credit remaining. I am a very light usage though as I am WiFi most of the day.

Be aware though that the SIM would not let me register for the free 200Mb at first because this SIM is designed for using in tablets and dongles and didn't like my phone. So I had to put it into another device to register it and then put it back in my phone. But it then works fine for SMS and calls as well as data

Aladdin Sane

“The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.”

― Terry Pratchett, Men at Arms

ARPU

Mr Humbug

Presumably, 3 has decided that it needs a bigger "average revenue per user", which is what the "more for more" strategy seems to be aimed at. Someone who makes 10 minutes of calls, send 20 texts and uses 50MB of data per month won't suddenly start using 500 minutes, 1,000 texts and 2GB of data just because they are paying for a £5 bundle that includes all that. But 3 either gets more money from them (through increased PAYG charges or a bundle that they don't use) or gets them off its books. Either way, ARPU increases.

ARPU seems to be the way that mobile networks measure their value.

How do they justify the costs of SMS?

heyrick

1048576 bytes of data, 5p.

140 bytes of SMS, 10p.

Cost of a megabytes worth of data at SMS rates - £749...

Re: How do they justify the costs of SMS?

Anonymous Coward

it's nothing to do with real costs. They clearly decided they can do it now, and what-are-you-gonna-do-about-it? They know it will not cause massive desertion to competitive networks (and something tells me we will see similar increases there too). The worst that can happen is that they lose some crusties, like me, while _most_ of their punters, bitching, but hey, who cares these days, will do as planned, and move to bundles and will pay more. And more. Because those bundles, you know, like that game of three cups, they do change rather... unexpectedly. And who has time to keep tabs on all those... tabs? Why don't you go up YET ANOTHER level to get EVEN BETTER deal. People are stupid, people will fall for it, as usual. The only thing to prevent such odious practices is competition. Well, wait and see :(

Re: How do they justify the costs of SMS?

Chris G

Competition?

Ah that's that thing that happens in industries where industry members don't chat about pricing in the pub after a hard day at a convention.

Re: How do they justify the costs of SMS?

DrewWyatt

It has been that way for a long time. From 2008:

https://www.theregister.com/2008/05/14/txts_r_v_pricey/

Anonymous Coward

Huawei costs? Don't care - bill Trump.

5G - that's for your benefit, not mine.

400% price hike? - bye three, BYE.

This ain't the first time by far

Mike 137

I still use a 10 year old PAYG SIM in an emergency phone (only used when out and about) and that keeps its balance indefinitely until used. Two years ago I had to set up a new phone with a new SIM from the same provider, advertised as "PAYG", but this one drops its balance once a month regardless of usage, so it's not really pay as you go, just a monthly rolling contract in disguise.

Re: This ain't the first time by far

Anonymous Coward

Have a look at [1]https://1pmobile.com/

[1] https://1pmobile.com

Re: This ain't the first time by far

Anonymous Coward

Looks good until you realise it's £30 a year regardless of whether you use it or not.

Requirements

To keep your account and SIM active, just make at least one £10 top-up every 120 days

Re: This ain't the first time by far

Anonymous Coward

I posted that link, as I'm a three subscriber and just found out about them.

Yeah, it's not perfect, I guess it's basically a £2.50 a month contractless contract with £2.50 uncharged use :-)

I'm all ears if you know of any better deal... I'm not saying that sarcastically / negatively - I just want the best deal possible too!

They want rid of users like me!

Licenced_Radio_Nerd

I have been with Three for several years after Vodafone started charging stupid amounts of money for their data. I have been very pleased with Three as I could add £20 in PAYG credit and that would last months. I rarely call, rarely text, and mostly use data over Wi-Fi. I am clearly someone they want rid-off as they cannot make enough money from me. That is fine. I will run down my credit, and go elsewhere! Not only will I go, I will also encourage friends and family, who I advised to migrate to Three, to move as well. There are plenty of cheap MVNOs out there!

Re: They want rid of users like me!

Anonymous Coward

Pretty similar situation to me. I've just signed up with [1]https://1pmobile.com - I was going to port my number, but for 2 quid I managed to get my old landline number (apart from the exchange code, of course!)

[1] https://1pmobile.com/

Re: They want rid of users like me!

Anonymous Coward

I am suddenly rather weary when a company I previously not heard of, gets mentioned at least three times in this thread, including links :(

Re: They want rid of users like me!

Jan 0

There are only _two_ references, in two adjacent threads, both AC.

Re: They want rid of users like me!

Anonymous Coward

link twice, reference in another post :(

<Knghtbrd> 2fort5 sucks enough to have its own gravity ...