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April 11, 2011

Mismatched contracts fetching UK mobile telcos £4.9bn

Average customer overpaying £200 per year, says report

By CBR Staff Writer

New research has found that UK customers waste £4.9bn per year because they are on wrong contracts.

Fear of penalties for exceeding the monthly allowance and overestimating usage are two main reasons for customers paying amounts that could be avoided.

A study conducted by mathematical group Bill Monitor found that three-quarters of customers in the UK never used their monthly allowance because most of them were on unnecessarily large contracts. The study also found that a third of customers were overestimating their usage, and then paying punitive charges.

Taken together, the two groups were wasting £4.9bn per year or about £194.71 each for such customers, said the report.

Oxford-based Billmonitor studied over 28,000 bills that included data of customers of O2, Orange, Vodafone and T-Mobile covering calls over the last nine months compared against 8,530,118 mobile phone contracts available in the UK on March 2011. The study did not include customers of UK3.

The study found that users were sending an average of 300 texts a month and had doubled their use of data in a year. The report has warned that new trends and different levels of data tariffs could lead to confusion among customers in future.

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Billmonitor, whose comparison system is the only one to be approved by telecoms watchdog Ofcom, said that the average customer spent £439 a year on their mobile phone. Founded by mathematicians in Oxford, Billmonitor is an independent service.


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