So, big bad telecoms firms are to raise prices:
So, a simple question. Who is it that is ratcheting inflation upwards? Is it multinational corporations, such as these, or nurses, teachers and rail workers?
Isn’t the answer obvious?
And what is the government doing about this base of monopoly power? It is asking very nicely if they might not increase their prices so much, knowing full well that they will be ignored.
The actual report Spud has lifted this from:
Official figures on Wednesday are expected to show that inflation fell to about 10.2% in January, although it will remain among the highest rates in four decades.
Some telecoms providers also use the retail price index (RPI) measure of inflation, which is typically higher. Many firms are set to increase prices above inflation, with some adding up to 3.9 percentage points on top of the official rate.
BT and Vodafone add 3.9 percentage points to the rate of the December CPI. Virgin Media is pushing through an average 13.8% rise, although customers will have a month to decide whether they want to leave.
This week O2 will reveal the scale of its price rise, which is based on January’s RPI plus 3.9 percentage points. Given RPI in December was 13.4%, a typical customer could be facing a 17%-plus annual rise. The company said the real increase would be closer to 9-10% as it applied to calls and data only, not the significant cost of payments for handsets that are part of bills.
The contract says RPI perhaps plus a bit. So, that’s what the companies are using, the contractual terms.
But perhaps RPI is the wrong inflation rate to be using?
Retail trade union Usdaw is again calling on the Government to take immediate action to tackle the cost of living crisis, as inflation continues to grow and wages are devalued by rising prices. The Retail Prices Index rate of inflation increased to 12.3% today and the Consumer Prices Index reached 10.1%. Usdaw argues that RPI is a more accurate measure of inflation, particularly as it includes housing costs.
Uh, maybe not then. As far as I know Spud doesn’t have any consultancy agreements with Usdaw. If he did no doubt he’d soon put them right.
The company said the real increase would be closer to 9-10% as it applied to calls and data only, not the significant cost of payments for handsets that are part of bills.
It’s whatever year this is (2003?) – you don’t have to pay through the nose for an expensive phone on contact.
Just get a cheap Motorola or Xiaomi for about £150 off Argos if you’re trying to save cash. Then you can get unlimited minutes and data for about £25/month (cheaper for limited plans) on a SIM only deal.
The great thing about Moore’s Law and Chinese manufacturing is that mobile telephony and internet is now so ridiculously cheap, even remote African bushmen are getting in on the fun.
Unlike with electricity, the market was allowed to fix the problem of consumer tech being unaffordable – everybody thinks I’m a boring middle aged nerd when I tell them the phone in their pocket is more powerful and versatile than a 1980’s supercomputer that would’ve cost millions. But it’s true.
Mobile telephony requires huge amounts of electricity. Not just the central sites and their megawatts, but 20 thousand cell sites at tens of kW each.
And what has happened to electricity prices recently?
But don’t worry, when Net Zero makes the lights go out, the cell sites go off also, so no one will know. Don’t expect to be able to call 999.
RPI is no longer a national statistic.
True, but the reason it still exists is because half a trillion of gilts are still linked to it…..
I paid about £25 for my mobile phone, and the monthly calls bill is about five quid.
Steve,
“Just get a cheap Motorola or Xiaomi for about £150 off Argos if you’re trying to save cash. Then you can get unlimited minutes and data for about £25/month (cheaper for limited plans) on a SIM only deal.”
I don’t understand why anyone spends more now. The cheap phones have a ton of storage (I never run out), are responsive, plenty of battery life. Most of what you’re doing is being delayed by the network, or the server you are talking to, not the CPU on the phones. Resolution is good enough (how does anyone notice 4k vs 1080p on a phone?). The only difference is the camera, and even that is very marginal now. And no-one really cares how good your photo of the Taj Mahal is. It’s being at the Taj Mahal that matters. Anyone who is serious about photography still uses a dSLR for all sorts of reasons, and if you ever see someone talking about how they shot something with an iPhone, it’s mostly a marketing gimmick.
Honestly, you’ve got £500 burning a whole in your pocket and “slightly better phone” is your first choice instead of good Cognac, a slap up binge at Rules or a threesome with a couple of Romanian slappers? What is wrong with people?
The first question is whether retail trade union Usdaw gives inflation-linking to its own employees and, if so, which index it uses.
BoM4 – idk either, budget Android phones have been good enough for 99% of users for about 10 years now. Also the “premium” end of the market used to cost about £350, now you’re looking at a cool grand for the latest overspecced fondlephablet that takes 50 megapixel photos of your cat.
Which is a lot of money to play Bubble Witch 2 on the toilet.
But revealed preferences would seem to disagree with you BoM4. There are any number of people on expensive contracts because it’s the only way they can get their hand on the latest model phone & being seen using anything less would, they consider, demean them.
Which is basically the phone manufacturers’ & service providers’ marketing strategy.
Those purveyors of expensive P’sOS Apple have been playing this one for decades. And exalted economists such as Spud Murphy falling for it. Not to mention most of those who would consider themselves your governing class.
Those purveyors of expensive P’sOS Apple have been playing this one for decades. And exalted economists such as Spud Murphy falling for it. Not to mention most of those who would consider themselves your governing class.
But the governing classes can kit themselves out with the latest Apple tech while the taxpayer picks up the bill.
If you don’t want companies using their monopoly power, then I suggest the best soluion is to not give it to them. The reason why there are so few companies is that the barriers to entry are enormous. For mobile phones, spectrum is licensed via auction, so unless you have access to lots of capital, you can’t even start. And then you have all the regulations.
jgh
Too much! £15 (Tesco), I put a tenner on the PAYG about once a year.
Lost power to my area for 12 hours recently, the cell service still worked for about 6 hours so I assume battery backup.
. . . now you’re looking at a cool grand for the latest overspecced fondlephablet that takes 50 megapixel photos of your cat.
It’s the least you should do for your cat.
100mpx medium format with studio lighting for the gilded pedestal is more appropriate.