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Research out today suggests that Brits with Pay-As-You-Go mobile phones are paying a £500 million a year penalty simply by choosing to pay up front.  

According to the ‘Great British Pay-As-You-Go Scandal’ - a report from video mobile network 3 - millions of British Pay-As-You-Go customers are currently the victims of a range of factors, from confusing price structures to entrenched industry practices,  which penalise customers while increasing operator revenues.  

Fortunately, these factors which discriminate against an estimated 36 million Pay-As-You-Go (PAYG) customers are finally being disrupted by a revolutionary pricing structure being introduced tomorrow, which could save Pay-As-You-Go users more than £1 billion per year.

Until now, PAYG customers have been charged up to twice as much per minute for some calls and on average 60% more than the minority of customers (30% of the mobile market) on contract.

The problem has been exacerbated by confusing price structures that have contributed to a situation where 43% of PAYG customers do not know how much they are being charged for their calls.   For example, PAYG customers are typically faced with 8 or 9 different call rates depending on whether the call is peak or off-peak; whether it is to a mobile on the caller’s own network, to a mobile on a rival network or to a land line; and whether it is one of the first or one of the last calls they make that day.

According to Gareth Jones, Chief Operating Officer of 3, "It’s hard to believe that mobile operators have been able to get away with treating 36 million Pay-As-You-Go customers this way.  The third generation of mobile telephony is now here and yet other operators are still clinging to outdated practices which penalise the majority of mobile users by over £500 million per year simply for paying in advance for their calls."

With its new Pay-As-You-Go service, ThreePay, 3 is the first network to combine the principle of equal pricing for Pay-As-You-Go and contract customers with a great value, straightforward and transparent pricing plan.

ThreePay’s vouchers, which last up to one month, are based on ‘bundles’ of call time.  These bundles remove each of the five longstanding obstacles to fair and simple pricing for pay-as-you-go phone users.  

Until now, practices endemic to Pay-As-You-Go tariffs have included:
charging Pay-As-You-Go customers more than contract customers for their calls
charging higher rates for peak calls
charging higher rates for calls to other networks
setting minimum call charges
charging a higher rate for the first few calls made each day

ThreePay on 3 offers all calls at any time, to any network on one simple tariff, so that customers no longer need to examine the small print to calculate exactly how much they pay for their calls.

3 is targeting the 12 million Pay-As-You-Go users currently buying top-up vouchers more than once a month – - typically spending  £15 or more per month - who would be better off switching to 3.  

ThreePay gives customers a choice of three vouchers which last up to 30 days and offer either 100 minutes for £15, 500 minutes for £25 or 750 minutes for £35. This means a ThreePay customer buying a £25 top-up voucher would typically receive three times as many any network, any time minutes as they would by spending £25 on vouchers on a rival network.

Gareth Jones, COO of 3, explained: "3 is a new network, and we’ve taken the opportunity to re-write the old rules.  ThreePay represents a true breakthrough – not just in ending pricing discrimination but in the exceptional value we are offering customers.  It’s time for other operators to follow suit and give customers a fairer deal."

Later this week, 3 will announce a range of price plans tailor-made for those who prefer texting to talking.   

-ends-

For further information please contact:
Ravi Matharu
Lexis Public Relations
Tel: 0207 908 6488
rmatharu@lexispr.com

Notes to Editors:

£500 million.  3 looked at PAYG spend above £20 per month and converted this to a number of minutes this would buy, based on a typical usage profile (source: OFCOM).  We then calculated how much these minutes would cost on pay monthly (contract) tariffs.  The result is a ‘penalty’ at each PAYG spend band, which we multiplied by the number of customers in each band.  The cumulative cost of paying in advance was £573m.  3’s calculations have been independently verified.

£1bn saving.  By offering ThreePay rates only to the 6 million users currently spending over £20 a month on vouchers, ThreePay offers an estimated saving of £1bn per year.  3’s calculations have been independently verified.

Independent quantitative research was conducted by Taylor Nelson Sofres between 23 and 25 January.  1007 adults were questioned across the UK.

Independent mystery shopper fieldwork was carried out by Elucidation between 27 and 29 January.  33 retailers were visited.  

ThreePay:
                             VideoTalk 100 VideoTalk 500 VideoTalk 750
Voucher cost                 £15                        £25                £35

Allocation of minutes    100                 500                 750
which can be used
to call any network,
at any time

Value allowance
for video, calls or texts       £1.50                £1.50        £1.50

About 3
Hutchison 3G UK Limited deliver third-generation mobile multimedia and communications services under the 3 brand in the UK, offering a convergence of media, information and telephony to enable live video calls, multimedia content and entertainment while on the move.

3 services are available from sister companies in Australia, Austria, Denmark, Hong Kong, Italy and Sweden. 3 also holds UMTS licences in Ireland, Israel and Norway.

For further information, please visit: www.three.co.uk

3 facts about 3
3 is a video mobile network - the first and only 'third generation' network to launch in the UK

3 is the only network currently able to offer mobile technology's most unique application - person to person video calling

Using 3G technology, 3 has built a new network that offers customers a combination of access to cutting edge video mobile services and great value voice calls

Published on: 12:00AM on 24th February 2004