Vodafone unveils 'rounding up' of monthly bills and doubling of internet rates
Millions of Vodafone customers will see their monthly bills rise next month, and there are big price hikes on the way for people who go over their data allowance or make a lot of calls.
Internet forums have been buzzing since it emerged that Vodafone, with nearly 10 million UK customers on monthly contracts, is "simplifying" bills by rounding them up, and is also upping the cost of some "out-of-bundle" calls (those outside of your monthly allowance) by 67%. However, it is cutting the price of other calls.
The changes mean customers who surf the web a lot on their phone, and regularly exceed their allowance, could end up paying twice as much as before.
Some question whether the telecoms giant is entitled to increase the cost of existing contracts, and if those who are unhappy could cancel.
In August 2009, the Guardian reported that Orange reversed a decision to hike the price of calls after it was suggested the company was breaching its terms and conditions. But Vodafone's small print is more specific, stating that people can only cancel if they can show the changes will increase their monthly bills by more than 10%. And they must write to the company before 11 October, when the new pricing comes in.
In May, Vodafone announced a 9% rise in annual profit to �9.5bn, helped by a bumper performance in the UK, and its finances were back in the spotlight this week after Britain's most senior taxman admitted errors when agreeing multibillion-pound settlements with large companies. This is understood to relate to claims that Vodafone faced a �6bn tax bill but paid only �1.25bn. Here's a look at the new changes, and what they will mean.
? From 11 October, everyone who took out a contract before February this year will have their bill rounded up to the nearest 50p. So if you pay �25.54 or �30.65 each month, these will rise to �26 and �31 respectively.
The company promised that no one's bill would increase by more than 49p a month, or �5.88 a year. It is impossible to say how much the company will make from the move. A back-of-an-envelope calculation suggests it could be up to �28m if around 9.5 million people paid 24.5p a month extra.
Customers on the internet forums were unimpressed. "Somehow they think they are 'simplifying' the price plans by adding an extra 1.8% to my monthly fee by rounding it up to the nearest 50p. How does this simplify anything? It is just a lame excuse to put up prices," said "bbxsa" on MoneySavingExpert.com.
On Digital Spy forum, "flagpole" added: "It never ceases to amaze me how the networks feel able to change price plans mid contract ? as far as I am concerned it's completely amoral. We had an agreement."
Another MoneySavingExpert.com poster said "any change in terms is a good enough reason by law to set aside a contract. It makes no difference what the Vodafone Ts&Cs [terms and conditions] say [it] doesn't mean the court would find them fair."
? The company is also "simplifying" the call costs that people pay once they have used their inclusive monthly allowance of minutes, texts and data. These changes affect pay-monthly customers who joined before June 2011.
From 11 October, calls to any UK mobile or landline number (except 0800, 0845, 0870, and numbers starting with 090) or UK voicemail will be charged at a flat rate of 35p per minute.
This will be a blow to many existing customers, who pay 21p a minute for calls to any Vodafone UK mobile, standard UK landline, 0844 numbers and UK voicemail. However, calls to other UK mobile networks and 0871 numbers typically cost 36p at the moment, so these will be slightly cheaper.
? One of the big changes affects those who regularly exceed their internet limit. At the moment, customers with a data bundle are charged �5 for every additional 500Mb. From next month, they will be charged �5 per 250Mb.
On the Bitterwallet website, "Richard" said: "I am a Vodafone pay monthly customer paying �42 a month for 900 minutes, unlimited texts and 1Gb of data. I usually exceed my data by 500Mb a month, so that would mean an additional �10 a month instead of the current extra �5."
? There is some good news. Vodafone is cutting the cost of calling 0800, 0845 and 0870 numbers for pay monthly and pay-as-you-go customers. From next month, calls to 0800 numbers will cost 7p a minute, and calls to 0845 and 0870 12p (this is down from up to 35p at the moment). However, this is a promotional offer ? from 3 January 2012, all these will cost 14p a minute.
Asked about the changes, Vodafone said the new "line rental" (monthly contract) costs represented an average increase of less than 1%, adding: "We haven't put up line rental charges for more than four years."
The spokesman said: "Very few customers will see their overall bill increase by anything like 10% because the majority of out-of-bundle calls are made to 08 numbers (because they are never in-bundle), and the price of those calls is reducing by as much as 80%. A wide range of organisations, from utility companies and banks to supermarkets and even local councils, make use of 0800, 0845 and 0870 for their customer service helplines."
He said the company was keen to ensure people had a bundle that matched their needs. "Anyone who makes a lot of calls to Vodafone customers should take up our �5-a-month unlimited Vodafone-to-Vodafone calls offer, and any customer who wants an extra 500Mb of data on top of their monthly bundle can still have it for exactly the same price, �5."
The company said if a customer believed the changes could still result in an increase of more than 10% to their total monthly bill, "you may be able to change your contract as per our terms and conditions". Write to Vodafone Customer Care, Vodafone House, The Connection, Newbury, Berkshire RG14 2FN by 11 October.
Source: http://www.guardian.co.uk/money/2011/sep/23/vodafone-price-rises-customer-fury
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