Saving money on mobile costs

For many of us mobile devices are constant companions we can always rely on.

We turn to them when we're feeling lost, bored or just need someone to talk to.

Mobile devices have had a big impact on not only our behaviour but also our bank balance.

A recent Commerce Commission report said nearly all New Zealanders carried a mobile phone and nearly 60 per cent of the adult population owned smartphones.

It said prices for mobile services in New Zealand had dropped steadily especially for low data plans which were now below OECD averages.

For a mobile phone package of 30 calls and 100 megabytes (MB) New Zealand ranked 11 out of 34 OECD countries.

But as soon as data increased New Zealand's ranking slipped.

For 300 calls and one gigabyte (GB) of data, excluding GST, New Zealand prices ranked 17th.

For 900 calls and 2GB of data New Zealand ranked 24th - 190 per cent more expensive than Australia.

And finally for 6GB New Zealand ranked 33 out of 34 OECD countries.

The Telco Users Association of New Zealand chief executive Paul Brislen said that's not good enough.

He put it down to a lack of competition at the top end of the market which was dominated by Vodafone and Telecom.

If 2degrees increased its presence in this space users would see a better price point, he said.

2degrees did offer competitive lower mobile data packages and that had resulted in consumers shifting providers, he said.

Many customers tended to stay with the same provider they originally signed up with which was costing them money, he said.

"If you don't change provider frequently, which most people don't, then you're missing out on a lot of savings."

Users should reconsider a plan at least once a year, he said.

He also advised people not to sign up to a 12 month contract.

"If you're locked in for 12 months they must be offering you something gold plated and worth while to keep your loyalty for that period of time."

Changing telcos these days was easy and customers needn't worry about having to sacrifice their cellphone number in the process.

"If you've got a number you can port it from one provider to the other backwards and forwards as much as you like."

But customers breaking contract should be careful about being stung by early termination penalties.

Customers data usage soared when connected to the rapid 4G ultra-broadband service because they consumed more information which was becoming increasingly content rich.

But telcos hadn't moved the data caps to meet the new speeds, he said.

"You're left with increased usage, increased demand, a much better network, a fantastic experience and then at the end of the day you just get this enormous bill which isn't ideal at all."

Contract customers which ran out of data and continued internet usage could be left severely out of pocket, he said.

For example using 1GB of data at a peak rate of 50 cents per MB would cost an extra $500.

"That's becomes a very expensive app you've downloaded or song that you've bought if it's at 50 cents an MB.

"The phone companies seem to think it's OK to charge at that rate and clearly it's not.

If customers felt they had been treated or charged unfairly and reached a deadlock trying to negotiate with a telco they could go to the Telecommunications Dispute Resolution scheme (TDR).

TDR was an independent dispute resolution service, free for customers of TDR scheme members of which there were 24 telcos.

TDR scheme director Derek Pullen said over the past 12 months it had registered 1765 complaints and dispute resolution rate was high.

"That is for the simple reason that most of the disputes we consider, are resolved relatively informally," Pullen said.

The significant majority of customers who used the service had an outcome either in their favour, or partly in their favour, he said.

The most common complaints received in 2013 were billing and credit issues (33 per cent), customer service (25 per cent) and network or handset faults (19 per cent).

Before it could formally consider a complaint, the customer needed to first take that complaint to the telecommunications provider.

Pullen said mobile device users should be especially careful with roaming charges.

"We regularly see complaints where customers receive bills in excess of $10,000 from roaming. If you don't need to use data on your phone when overseas, turn it off on your phone before you leave New Zealand."

Other advice included:
- Make sure that any provider you sign up to was a member of the TDR Scheme.
- Consider both pre-pay and on-account plans. There could be big differences in overall cost depending on your usage.
- The Consumer "TelMe" website was useful to compare plans and prices.
- When comparing plans involving data, be careful to compare like with like. Some plans quoted per MB, others quoted per GB. There are 1024 MB in 1 GB.
- Consider carefully whether locking into a minimum period plan was right for you. If you terminated the contract early, you were re likely to face early termination charges, which could be significant.
- If you did use data roaming overseas, it's a good idea to turn off automatic updates. Many smartphone apps updated automatically without you knowing, and these could be very data hungry.
- If offered extra insurance cover for a handset by a retailer, consider carefully if it offered any real benefit. These extra insurance policies were often expensive, and may not provide much more benefit than the Consumer Guarantees Act automatically provided.

Brislen said many mobile virtual network operators (MVNOs) in New Zealand could be a good source of competitive mobile service pricing off the back of landline networks.

They offered an alternative in the market but were not widely known about, he said.

"The more people that know about them the better off we all are."

Telcos trying to advertise unlimited text messages was now a rather weak sales point because text messaging was becoming obsolete with the rise of internet messaging such as WhatsApp, he said.

Phone calls were heading in the same direction thanks to such apps as Skype and Viber.

"I expect to see more of this unlimited voice and text but more restrictions on data because that's where the money's to be made in future."

He said customers switching providers could be just what was needed to make telcos operate in the best interest of the customers.

He said people should haggle with their provider to get a better deal.

Telcos could be quite flexible in meeting existing customers demands because it was much easier to keep existing customers than attract new ones, he said.

"You can push them on it. You'll be amazed with what they come up with."

Fairfax Media