Knowing and Making

Called Vodafone today because they've just charged me £250 on one of my handsets. They mentioned a new price plan which is available now that my contract period is finished. £20/month for 900 minutes and an infinite number of texts. Pretty good considering that I just paid £250 for 900 minutes and a distinctly finite number of texts. So I asked to switch plans. Should they have told me about this option - costing less than a tenth of what I was paying - without me having to ask for it? An interesting question, for a company claiming to provide the highest quality customer service of all the British mobile networks, but that's not what this post is about. This post is about me remembering that my work mobile is on an old contract too, costing me about about £65 for much less than 900 minutes. So I asked to have that one switched to the £20/month deal too. And so the paradox started. I haven't changed plans for about ten years on this one. I don't use it enough for ...

Ofcom, the UK's communications regulator, has decided that mobile phone companies must cut the termination fees  they charge each other from 4.3p/minute to 0.5p/minute. This is the cost paid by, say, Vodafone to T-Mobile when I call a T-Mobile customer using my Vodafone handset. According to Robert Peston , these fees represent 16% of revenues for British mobile phone companies. Therefore, he says, they will try to make it up by increasing charges in other areas. There are a couple of problems with this view, however. The first is that for every Vodafone customer calling T-Mobile, there's likely to be a T-Mobile customer calling Vodafone in return. The numbers won't be exactly the same - perhaps T-Mobile customers are more stingy - but a large part of that 16% of revenues is cancelled out by costs that the telcos incur. These costs will disappear at the same time as the revenue. So instead of charging 15p/minute and paying 4p to another company, then receiving 4p l...