Telephone Company Dirty Tricks

Posted by CJD on January 4, 2013

Telephone calls are commodities – with exceptions, they’re mostly the same whoever you get them from.

(Telephone Services are different of course; they’re definitely NOT all the same and it’s a mistake to choose a telephone service simply on the basis of their headline call prices – but then you knew that.)

Pure commodities are typically sold on price alone and, in a perfect world, the price of the commodity falls to its cost, plus just enough profit to sustain the business providing it. If anyone gets greedy and tries to increase the price, the customer moves immediately to a lower priced competitor.

Businesses generally hate commodities because, unless you’re a monopolist or a cartel price fixer, they can only make small margins on them and so have to sell bucket loads to make enough to buy caviar and fast cars.

So every commodity business tries to make theirs NOT a commodity business. Petrol stations do it by bagging great locations, they position themselves on main highways and intersections and they sell milk, chocolates, newspapers coffee and cheap flowers for your mother. Gas and electricity companies produce hundreds of confusing contracts so you can’t easily compare prices.

But telephone companies are the best at this game of obfuscation, the three card trick; which cup is red ball under now and where is the shill?

They’ll sell you ‘unlimited’ packages that are always limited by ‘fair use’ policies, they’ll bundle all kinds of services together so that you can’t compare competitor’s offerings, they do special time-limited offers and three months free deals, they have fiendish pricing mechanisms that make call prices look cheap but aren’t.

I could do a whole blog about these practices alone, such as marketing a relatively low pence per minute charge but having a high fixed fee per call – yes BT, that’s you – or charging per minute instead of per second, or showing a low pence per minute but charging a high minimum charge per call. But that’s maybe for another day.

Today I’m ranting about fixed contracts.

Well actually, for once I’m not grumbling and for once I’m congratulating Ofcom on their recent, rather sensible, announcement that they plan to prevent telephone and broadband providers locking customers into long term ‘fixed’ contracts then putting their prices up half way through.

They have had thousands of complaints about this practice and it’s is so obviously unfair that it’s a wonder Ofcom have taken so long to sort it out – but it’s not at all a cause for wonder that the legacy phone services don’t feel even a tad of guilt by trying it on.

Anyhoo, it looks like ‘fixed’ contracts are on their way out – or at least the customer will be able to get out of fixed contracts that turn out not to be fixed.

I wonder what their next filthy trick will be?

Info here:

Voipfone, of course, is an honest company; no tricks, no traps and no contract at all.

Have a great year.

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