O2 UK Calls on Mobile Rivals to “Stop the Smartphone Swindle”

Mobile operator O2 (VMO2) has launched a new campaign today that calls on their rivals to “Stop the Smartphone Swindle” by introducing changes that would prevent consumers overpaying for mobile phones they already own. But EE (BT), Vodafone and Three UK say they already offer such packages.

According to Virgin Media O2’s new research, “millions of consumers” in the UK are said to be overpaying for their mobile phones, as new analysis claims that handset overpayments are costing consumers £530m each year. This reflects the fact that some bundles of both mobile handsets and tariffs (airtime contracts) will continue to charge consumers for the handset, even once the minimum contract term has ended.

VMO2 states that their rivals at EE, Vodafone and Three UK are estimated to collectively have millions of customers on traditional phone contracts that bundle together airtime costs for minutes, texts and data with the cost of the handset. Meanwhile, the operator claims that 93% of Brits are completely unaware they could be charged for handsets they’ve already paid off.

The operator is now calling on their rivals to help put an end to this issue with three clear asks, which would put them on a similar level to the approach that O2 has been taking for many years:

1. Introduce split contracts giving consumers greater choice over their mobile phone bills.
2. Automatically roll down customers onto an airtime only plan at the end of their minimum term to stop handset overpayments.
3. Inform customers once they’ve paid off the cost of the handset at the end of their contracts.

Gareth Turpin, Chief Commercial Officer at VMO2, said:

“We’re calling time on this half a billion-pound problem and urging the industry to step up for consumers and put an end to the smartphone swindle.

As the only operator to have offered split contracts for over a decade; automatically roll down our direct customers once their device is paid for; and ensure customers receive clear handset payment information at the end of their contract, we want others to ensure consumers don’t overpay for their smartphones.

During a cost-of-living crisis, and with older and low-income households most at risk, I’m asking the other operators to do the right thing.”

On the one hand, it is true to say that many consumers are still stuck in a contract where this kind of thing can happen. But on the other hand, EE, Three UK and Vodafone also now offer the option of split contracts, although these aren’t always the default and there’s certainly some room for improvement.

Lest we forget that Ofcom has already introduced (2019) a range of new measures that were intended to tackle issues like this by requiring mobile operators to be more transparent about such plans (here). But this hasn’t completely resolved the issue, and Ofcom are known to be reviewing it, again. The regulator’s End-of-Contract Notification (ECN) system, which was introduced in February 2020, is another helpful tool.