Vodafone: Ofcom plans won't work due to premium numbers

Vodafone has turned its big red nose up at Ofcom's plans to let you get out of your mobile contract early. Earlier today the phone regulator recommended that networks stop the practice of raising prices mid-contract, but Vodafone says it doesn't control all the costs involved.

"Ofcom first needs to understand the difference between the prices that are set by mobile phone companies and those which are not," Vodafone said in a press release this afternoon.

"We simply do not control many of the charges faced by consumers... Prices set by third parties such as BT, include those for directory enquiry services, premium rate and 08 numbers. Yet Ofcom appears resolved to introduce measures that would effectively prevent any rises in these prices being recouped while customers are still in contract."

Premium rate numbers? I don't quite understand. They're added on top of your contract, like if you go over your allocated data or minutes. The customer already bears that cost -- how can that be relevant to the question of raising your contract prices?

Vodafone spokesman Richard Wray explained that the General Condition 9.6 and the Unfair Terms in Consumer Contract Regulations, which Ofcom's consultation covers, includes everything on your phone bill. Here's the relevant paragraph from Ofcom's consultation in full:

• "It is not clear to us why, for example, any different position should apply to costs such as those relating to non-geographical numbers [ie 0800 numbers etc], for example. Providers are able to, and do, make an unbiased forecast of these costs like any other costs and set prices for them periodically. They are able to make a commercial decision as to the frequency of price increases and notification to consumers. If it is of commercial importance to the Communications Provider to increase a price or prices contained in a contract with a consumer then the provider will have to notify the consumer and bear the risk that the consumer will choose not to accept the proposed increase."

So you would receive more texts from your network telling you prices for certain services are going up. And you would usually just ignore it, but if you used those services a lot, you would have the right to move your contract.

"Ofcom itself admits that if its proposals are carried out, they could result in the up-front cost of using a mobile phone actually increasing," Vodafone said.

Yes, that means you may have to pay more upfront for a phone, or pay for phone financing and services separately. Separately, that is, on different lines of the same bill. As you do now, with included minutes and... premium rate numbers. It might lead to you paying one network for your phone and another for your service, but most people would want to avoid that kind of hassle.

This is not a coherent argument against Ofcom's proposals. People should be aware of how much they're paying for a product over the course of a contract, and they should be able to cancel that contract if it rises steeply.

And if you use 118 or 0800 numbers so much that a price rise would unduly affect you -- increase your bill by 10 per cent, say -- then you should be able to shop around. (Vodafone wasn't able to say what percentage of its customers this kind of rule would apply to.)

Equally, you shouldn't be able to dodge your responsibility to pay for your expensive smart phone.

The networks are terrified of becoming mere utility providers -- faceless, entirely interchangeable commodity providers like water companies. They're desperate to retain every possible edge they can, which includes obscuring the full cost of your phone and effectively charging you a high rate of interest for it.

My advice is to take the power into your own hands by buying your phone yourself and shopping around for the cheapest SIM-only service you can find. Phone companies don't want that to become the norm.