Loyal customers pay again for phones

Mobile phone customers who do not change their tariff after their contract ends may be paying subsidies for a handset they have already paid for, a consumer group warns.

Many mobile phone users take out a contract with the cost of the new handset included in the overallprice of the fixed term deal, with the majority paid off on a monthly basis over two years.

At the end of the fixed-term contract, consumers can stay with their network on the same contract, take out a new contract, or switch to another provider.

But the UK’s Citizens Advice found some British customers who stayed on the same contract when their fixed-term deal ended were charged the same as when they were paying for the handset.

In a bid to clarify the situation here, the Irish Examiner asked Eir, 3, and Vodafone if they reduce the price of customers’ bills once the cost of their phones is paid off, and if they would consider itemising bills to show customers how much of their monthly fee goes towards paying for a device.

In a statement, Eir said a number of its mobile plans subsidise the cost of a new handset, removing the upfront cost for the customer: “The amount of subsidy depends on the tariff, handset and other factors.

For example, if the customer is an existing mobile or broadband customer, he or she may get an additional discount. This monthly bill remains constant throughout the period of the contract (which can be 18 or 24 months, depending upon the cost of the handset). After the minimum contract, this price remains the same.

However, at the end of this minimum contract period, the customer is offered the opportunity to upgrade to a new handset,” it said.

A Vodafone Ireland spokesperson said it strives “to give our customers the price plan that best suits them”.

“We offer a range of options to our customers nearing the end of their contract. These include being able to upgrade their handset, receiving an extra allowance to enhance their existing plan or, if they choose, switching to a SIM only plan.

"Customers can also change phones after just three months with our upgrade anytime option.”

According to 3, its plans’ monthly payment “is based on the service provided”.

“Plans are not structured to assign a certain portion of the monthly payment to subsidise a device and this is reflected in the customer’s bill.

"When a customer signs up to a mobile phone contract with 3, they are clearly advised of the contract’s minimum term. The customer may terminate the contract at the end of the minimum term or any time thereafter on giving 30 days’ notice. 3 endeavours to contact customers when they are coming to the end of their contract’s minimum.”