The myth of the mobile phone deal

Picture the scene if you will, a client who you have worked with for the past couple of years contacts you with a proposition.

• They want to pay you a monthly retainer guaranteed for the next 18 months by direct debit based on the average numbers of hours of work you do for them each month.
• The fee is to be calculated on your normal charge out rate less 10%.
• If they need less than the average amount of work you still keep the monthly retainer.
• If they exceed the agreed number of hours of your time you can bill them at your normal rate plus 50%.

Sounds good doesn’t it – just a few clients like that would give you a solid business base. I can’t imagine anyone who would not accept such a proposition as almost all the risk of that client has gone. Guaranteed income which more than covers the discount on your rates, payment by direct debit so no credit control required, and if they ask you to do more than normal you can charge them one and a half times your going rate.

So what has this got to do with mobile phones? Well if you apply this proposition to the mobile phone industry you will see that you and the majority of mobile users currently subscribe to exactly this type of arrangement.

Mobile phone dealers and the networks are masters at packaging their offering in a multitude of ways but in the end whatever the deal it is set to make them money. They are the masters of the “freebie” – free handsets, free minutes, free texts, goodness they should all be registered charities!

But lets face it nothing you get from them is free. The free handset is paid for by your “line rental” charge as mobile phones don’t have a line to rent. Likewise for your free minutes and texts the fact that they offer you a million free texts per month is because they know that you will actually use 100, so it is a hollow promise.

So what do you do when you want to change your mobile deal?

1. Don’t be blinded by the fancy new handset they offer you for free – you will be paying for this in your line rental
2. See if they will offer you pay-as-you-go terms that will mean you pay for what you use
3. Check your bills and see what number of minutes and texts you use per month on average. If this comes to say 500 minutes and you are being offered 5,000 bundled minutes then ask them to decrease the offer