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Mobile Phone Taxes and Charges

Irish News of the World

Sunday March 15th, 2009

Diarmuid MacShane

Mobile Phone Taxes and Charges

Times are tough all round, with little chinks of light every so often – such as the recent 0.5% drop in mortgage rates. We were told by the Government recently that we’re going to have an emergency budget in early April and signs are that we’re going to be taxed more and experience greater government spending cutbacks.

In the spirit of sharing the responsibility (and the blame?), Fianna Fail and the Greens have opened things up to the other political parties to suggest what they think can be done to improve our lot. Yet it was a member of the Green party who came up with one of the more ridiculous taxation ideas in some time.

In the past couple of weeks, the Green Party Deputy Leader suggested that the Government could impose a 1c tax on every text message sent. This isn’t as original an idea as you might think though. Last December, the residents of Sacramento in the United States voted to impost a tax of 7% on text messages, as well as landline and mobile calls, and even calls over the internet.

However, never mind that Ms. White spectacularly got her numbers wrong – by about €1.3bn in fact – she’s actually going after the wrong people if it ever came to a tax on text messages.

If the Government want to tax text messages, they should tax the network providers. Did you know that it costs effectively nothing for you to send a text message that your mobile provider is charging you between 5c and 12c to send? If there is to be a tax on texts, let the networks pay for it out of their text message profits.

Since I’m talking about mobile phone costs, there have been several developments recently that should help you cut down on your mobile phone costs. As I mentioned a couple of weeks ago, I have recently cut €30 per month off my monthly bill, yet I haven’t changed my usage.

With belts being tightened, it’s being reported in many mobile markets that customers are switching from a mobile phone contract to a pay-as-you-go or pre-paid arrangement with their service provider.

Three of the five Irish mobile companies have come up with new combination type products recently to capture this change in the market – a set monthly pre-paid amount like a monthly contract that can be extended if you wish like, like pay as you go.

Meteor launched a product called Bill Pay Lite where you commit to paying €10 per month. For this, you get 60 minutes included, and free Meteor to Meteor texts, and you only have to commit for a minimum of 30 days.

Three launched a similar product called Best of Both where you pay €25 per month for 100 minutes to any network, 100 minutes to other Three customers and free texts to anyone.

Finally, the O2 Clear plans allow you for as low as €20 per month you will get 50 any network minutes and 50 any network texts. You must sign up for a 12 month contract, but you can break this free of charge with 30 days notice.

Apart from the value available, the beauty of these new products is that you’re tied to a particular company for only 1 month maximum. If you see a better deal elsewhere, then you can move at the end of the month – obviously while keeping your own number.

If you’re a pre-paid customer at the moment, it’s simple to switch providers. Just go along to one of their stores, and you’ll be signed up and ported over in no time.

And what if you’re a pay monthly customer at the moment? Normally, to cancel your contract you will have to pay the remaining commitment to your mobile company as compensation for breaking the contract. If you want to switch plans for the same company, you could just ring them to see if they might give you a deal or discount – no harm in haggling or negotiating.

Otherwise, if you want to move immediately, the cheapest way to do it is to move to the lowest cheapest plan your mobile company provides, and then cancel your contract. Your payout to them will then be as little as possible.

So how much can you save?

The average monthly spend of a pay monthly customer in Ireland ranges from €70 to €100 depending on the mobile company. Anyone moving to even the most expensive of these new types of plans could save themselves a huge amount of money depending on their usage – up to €900 per year if you’re careful.

Even pre-paid customers, with an Irish average monthly spend of between €25 and €35 depending on their mobile company, could save up to €300 per year if they were to switch and stick to the minutes and texts provided in these plans.

10 comments On Mobile Phone Taxes and Charges

  • I don’t think thtext message levy is as fair as the greens think it is. The lion’s share of texting is done by the youth of our society – those without a regular income. They use it, becuase, amongst other reasons, it’s cheap. Texing this is taxing one of the poorest sectors of society. Harly fair, in my opinion.

  • @The Toy Man – I’d probably agree with you. That’s why I, and other commentators in the media, have advocated that if a tax was to be put on text messages, that it should be levied on the service providers and not the end users.

  • What about skype on 3? Best value you can get. No data charges. All you need is credit balance. Call any skype number for free. That literally means if you want to call a mate on 3 mobile with skype is free. Skype chat and windows live is also free. Who needs text when you can chat. Don’t think the government can tax chat!

  • I tried to go onto Bill Pay Lite with Meteor but was told I would have to pay €100 deposit!!

  • @Paddy9 – I’ve had such terrible problems with Three in the past, that I’d avoid them at all costs.
    While Skype is brilliant, Skype via mobile means you’re restricted to only getting free calls to whomever of your friends has the same phone set up with Skype as well.

    The reason you don’t see “chat” on other phone networks is because they don’t yet know how they’re going to charge for it. Once they work out the charging model, then you can be sure that the government will find a way to tax it.

    @annoyed – Is that an actual deposit, or an initial top up? Did you try to negotiate a compromise?

  • Hi Valueirealnd, not sure how long ago you were with 3 but things must have improved.
    Used 3 for the last month.
    Excellent customer support.
    Tech support guy stayed with it for 35 minutes to solve a complex problem with skype.
    You can make free calls to landlines via skypeout using a free software programme called skypephone manager.
    One annoying UK v Ireland ripoff. UK one £10 topup gets 90 days free skype. Ireland 10 Euro topup gets you 30 days…
    Same old BS….

  • @paddy9 – it’s a couple of years now since I was on 3, so fair enough, things may have improved. Though, given some of the posts I’ve scheduled for next week with feedback from other 3 users, it doesn’t look like it’s improved all that much.

    You could check out the Fring software as well – I have it running on my phone on O2 working brilliantly.

  • I am currently doing a tax assignment in college and was thinking about the 1c for every text message initiatice.Having read this article,i sort of agree with that the service providers should pay for this,Could u give me any more information on this matter to add into my project?thanks

  • @shane – this poste is merely my opinion – I don’t necessarily have any further information.

    Please feel free, however, to quote the comments above as long as they are attributed in any work you put together.

  • If it was the service companies who were charged on the income they receive from text messages,they will eventually increase the price of text messages so the consumer will suffer anyway.

    Also since a lot of service comapnies provide free texts,the revenue from tax will ot be as much as if it was the individual being taxed.

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