A piece by Conor Pope in the Irish Times Pricewatch column recently, which I referred to here, also brought to mind something which I tried to highlight in a recent interview I did with the Sunday Times personal finance editor, Niall Brady. (No link yet).
Firstly, have a look at the quote in Conors piece from a Pricewatch reader:
“I pay O2 a monthly fee for unlimited calls to landlines and mobiles, which is fine,” he writes. “However, I have a very high usage on the phone during the day. I have to ring a lot of business and Government agencies which are now only giving out lo-call numbers.”
He says that if he just rang a normal landline he would incur no costs when ringing these numbers, but, because he has to ring numbers which start with either 1850 or 1890. The reader says that he has to “pay O2 a monthly fee” but that calling landlines “would incur no costs”.
Doesn’t make a whole lot of sense really, does it?
And therein lies the beauty, for mobile phone operators, of the “inclusive minutes” packages that they’re all selling.
Say you have a monthly package that charges you €50 for unlimited calls in a month.
If you use the 400 minutes in the month, then you’re paying 12.5c per minute. They’re not free – you’re paying for them. If you make 4000 minutes of calls in a month, then you’re paying just over 1c per minute for the calls – far better value for the money you’re paying. And obviously, if you’re using only 40 minutes per month, then you’re paying €1.25 per minute for your calls. But all the time you’re still paying.
Many of us will have pay monthly packages that charge, for example, €55 for 350 minutes in a month – using the O2 Clear 350 as an example. If we use our 350 minutes every month, the best value for money we’re getting is 15.7c per minute.
If you go over your 350 minutes, you’ll be charged the standing rate of 25c per minute.
But if you don’t use your full 350 minutes per month, you’ll end up paying even more per minute for your calls. Using only 100 minutes means you’re paying 55c per minute, and only using 200 minutes means you’re still paying above the standard rate at 27.5c per minute.
Of course, the above calculations can be clouded by the fact that you get “inclusive texts” as well – but these calculations are exclusive of that to make the point.
The point – just because minutes are inclusive doesn’t mean they’re free. How you use the minutes you’re paying up front for determines how much value for money you’re getting from your mobile package. The more minutes you use of your allowance, the better value for money you’re getting.
It’s worth checking whatever package you’re signed up to – what you’re using versus what you’re paying for. You should be able to get all this information from your bills – either paper or online.
Check out the average cost of what you use, versus what you’re paying for. If you find that you’re paying for more minutes than you normally use, then it might actually make sense for you to change your monthly bill pay package, or even to move to pay as you go, depending on your usage and average cost.
Just something to think about.