Virgin Media O2 UK Launch Smartphone Overpayment Calculator
Mobile operator O2 (VMO2) has today continued their campaign against abuse of airtime contracts that cover the cost of both your handset and mobile plan, which can leave some consumers overpaying for mobile phones they already own, by launching a new online calculator to help check if you’ve overpaid for your Smartphone.
A few months ago VMO2 published the results of a new survey, which suggested that “millions of consumers” in the UK were overpaying for their mobile phones by as much as £530m each year (here). This reflected the fact that some bundles of both mobile handsets and mobile tariffs (airtime contracts) will continue to charge consumers for the handset, even once your minimum contract term has ended.
In fairness, many of the operator’s primary rivals, such as EE, Three UK and Vodafone, do offer split contracts (i.e. separate contracts for the handset and airtime). But VMO2 was quick to point out that these plans aren’t always the default, and they even conducted a secret shopper survey to show that some of them (e.g. EE’s Flex Plans) can be hard to find and join (here).
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Naturally, this is all a bit of clever marketing, since O2 customers have been able to benefit from split contracts for more than a decade (O2 Refresh). The latest salvo follows that trend by announcing the launch of their new online overpayment calculator for consumers.
The new tool wasn’t live at the time of writing, but the idea is that you input some basic details (e.g. mobile operator, upfront cost, current device, monthly bill amount and contract start date) and it tells you whether you’re “at risk” of overpaying for a mobile phone that you already own in the future.
“The calculator helps to put the power back into consumer’s hands by outlining the potential impact on a person’s finances and then clearly outlining and the simple steps they can take to save hundreds of pounds on their mobile phone bill,” said VMO2.
Gareth Turpin, CCO at VMO2, said:
“Charging consumers for phones they already own is just plain wrong – yet millions of us are being swindled by other operators that do just this.
Since we first exposed this issue in May, consumers with other operators have spent more than £100m paying for phones they already own. Now, armed with our new easy to use overpayment calculator, we’re putting clear information into consumers hands, helping demystify bundled contracts and exposing just how costly they can be if no action is taken.
The other operators could help stop this with three simple steps – provide split mobile plans; introduce automatic roll down to an airtime only plan; and provide clear information once a phone has been paid for. We hope they’ll join us in doing the right thing for their customers.”
In an ideal world, mobile operators would automatically roll down customers onto an airtime-only version of their plan at the end of their minimum term. However, in absence of any tougher action from Ofcom, the best defence is often to ensure that you’re fully informed about the contract you’ve taken out and know when to switch or upgrade to avoid overpaying.
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Naturally, we don’t expect this tool to be perfect (take it with a big pinch of salt), and it’s clearly designed to promote O2’s own plans. The demo we tried was fairly basic and didn’t spell out its calculations, while the notes in VMO2’s announcement warn of caveats: “Calculations based on information provided by the user and specific agreements/ discounts not accounted for. Monthly handset repayment calculated by taking the phone RRP at time of purchase, less any upfront cost, divided by the contract length. RRP data provided by independent third-party.“
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and Linkedin.
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Incredible that O2, who introduced a 17.3% price hike this year are boasting about not overcharging.
And indeed that they’re part of VMO2, who are under regulatory investigation for the accusation of making it difficult for broadband customers to leave. So throwing stones at other operators questionable practices doesn’t seem so clever.
It works so slow on my mobile… What a crap
Charging consumers for phones they already own is just plain wrong – yet millions of us are being swindled by other operators that do just this.
LOL, so what have they been doing for years then?
Got away from paying stupid prices for phones years ago. sim only these days and not going to change back to having a phone from one of these providers.
If You as a consumer don’t know when your contract is up to either leave or move down to sim once handset is paid then more fool you. Of course all networks should follow o2s example by automatically dropping to airtime but to lay all the blame at the door of the networks is pure folly.
Yes they do a ton wrong including reintroducing roaming, mid contract price hikes and general appalling customer service but I do believe if consumers run a contract for another 12 months after the minimum term then that is their fault
@Jim, I do agree with you that people should keep an eye on their own contract, but sadly sometimes things can be forgotten about, the only contract I have these days is my broadband and I have put it on my phone calendar when the contract is close to the end. I did that with other contracts I had. but some people don’t think that way.
My problem with mobile phone networks is the way they get people to update after a couple of years and starting the process all over again.
I can’t see myself ever do a contract again for a mobile phone, sim only is the way for me, no contract well unless you can call a month a contract.
Someone at work likes to show off his latest phone every couple of years, also he has to have the latest high end Samsung, I think now he has realised that I really don’t care what he has, my Oppo does what I need, if I wanted a high-end phone I would buy one outright.
Whilst SIM-free is usually better value, it isn’t always as for some handsets it’s actually cheaper to buy on contract rather than outright, when the makers will discount to MNOs far more than they will through wholesale/retail channels.
I’ve got a Samsung on contract at the moment, and it would have worked out materially more expensive to buy outright (from the the cheapest trustworthy online source).
VMO2 do have a point though – operators who continue to charge the full rate after fixed term deserve to be called out. If Ofcom weren’t useless, slow, toothless, and in the telcos pockets the practice would be banned.
Some responsibility on the customer aswell to keep an eye on their contracts and also read the actual contracts themselves as someone who has worked for mobile phone providers alot of misunderstandings about
customers actual contracts could of easily been solved by simply reading your contract! The amount of customer I use to get saying they was never told this or never told that, and 9/10 they placed the order online without contacting anyone in the company itself!…yes you was told yoh chose to ignore!….save yourself alot of issues if people actually start reading what they are signing up for!
Why should it be the responsibility of the customer? How about the b*****s don’t rip people off?
Whilst you and I may be engaged with the market, able and willing to switch at the drop of a hat, there’s many people who aren’t in that situation, – often the elderly, those with metal health issues, life challenges like disability or caring responsibilities, those holding down multiple poorly paid jobs to get by. Indeed, human intelligence has a distribution, some people simply aren’t that bright. Why should all these groups be ripped off?
Cheaper to get a unlimited sim only and buy a handset outright from argos.