Consumers paying millions too much for mobile phone plans

Investigation finds some consumers are significantly overpaying for mobile plans.

20sep consumers paying millions hero

Telcos are earning millions of dollars in extra revenue from selling mobile phone plans that don’t meet customers’ needs.

Consumer NZ chief executive Jon Duffy said the mobile bill report, released today by the Commerce Commission, showed one in four post-pay customers were paying too much.

About 25 percent were spending $139 a year more than needed to cover their usage. Another seven percent of consumers were paying as much as $584 extra a year.

“Telcos are earning millions extra in revenue from selling plans to these customers that are too pricey for their needs,” Duffy said.

A major problem consumers faced when choosing a plan was weighing up the confusing array of options.

“Creating confusion has been a long-standing marketing tactic in the industry. Telcos rely on it to reduce the likelihood consumers will shop around,” he said.

Consumer NZ’s research shows just 33 percent of consumers think it’s very easy to compare mobile plans. Only 38 percent think it’s very easy to switch companies.

Duffy welcomed the commission’s investigation into telcos’ pricing.

“Telcos know when a customer isn’t on the best plan and is paying over the odds. They should be required to tell their customers this and not just sit back reaping the gains.”

The commission is also calling on telcos to provide consumers with easy access to information about their usage and spending.

Duffy said this data was crucial for consumers to tell if they were being sold a product that was much more expensive than they needed to pay.

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George V.
21 Sep 2020
Skinny $9 for 28 days

I use Skinny and pay $9 for 28 days. I don't use my mobile a lot but it is more than enough for me.

Barbara E.
21 Sep 2020
2 Degrees Mobile

My family have been with 2 degrees from the outset, and we are extremely happy with our choice. We are all on monthly plans (normally $30 per month but only $25 with a Gold Card) I use my phone regularly as a mobile hotspot ( our internet is not that good) and I have never run out of data or minutes. Minutes and data do not expire until a year after purchasing. Wouldn't go anywhere else.

Bernadette L.
20 Sep 2020
Landline & Mobile

We recently changed both our mobile plans with unlimited talk minutes which was all we required and changed our Spark Landline to a landline with our internet provider. We saved $107 per month, well work the exercise.

Paul W
20 Sep 2020
Prepay the best

I'm not sure why people are obsessed with having post pay plans which cost way more than prepay. My last couple of year working I opted for Prepay at $16 / month with Skinny. The company was on $99 / month plans with Spark. Apart from marketing type who live on their cell phones, the tech people only used about 10% of the $99 month plan. I would always have lots of minutes left. At Home now all of us are on Skinny prepay. The only advantage of post pay is buying the phone interest free over 12 to 36 months.

Rob
19 Sep 2020
Warehouse Mobile

We use both use Warehouse Mobile at $12 a month each, which gives us 200 minutes, 500 GB roll-over data and unlimited texts. They often throw in extra data, and extra packages if needed are only $4. When roaming I buy a local SIM for my dual SIM phone.

Mark H.
19 Sep 2020
Warehouse Mobile is also the cheapest for me

I don't make many calls (receive way more than I make) and I don't send many texts (maybe a dozen a month on average) so I pay for calls and texts as I go (8c per text, 8c per minute) and just buy a 500MB data bundle each 31 days for $4. I spend under $60 per year.

All my apps are set to auto-update only when Wi-Fi is avaiable, which is every day when I'm at home. I can use data as much as I want and never exceed the 500MB per month.

John H.
19 Sep 2020
Mobile prepay plans compared

The claim, by Rob, that you are getting 500 GB on the Warehouse monthly prepay is obviously a typo error. (it should read 500 MB) Nobody offers 500 GB for $12 a month !

Warehouse mobile uses the 2 degrees network, so does not have the fast speeds that Spark/Skinny & Vodafone give.
Have tried all three networks, and tested the speeds on them all, with the popular site, Speedtest by Ookla.

Best place to check out comparative cheapest deals on NZ mobile plans is at
https://www.glimp.co.nz/mobile/compare

Diane B.
19 Sep 2020
Mobile plans

I pat $16 a month to Skinny, never run out of phone calls, texts or data when travelling

Anthony
19 Sep 2020
Telcos and overcharging mobile users

As a mobile only user I still don’t need even the “cheapest” monthly plan, and so opt for a $12/month prepay. But this means when roaming I can’t use my data but have to pay exorbitant fees for roaming data. Now I discover I can’t use the eSIM option on the phone I am about to buy unless I have a monthly plan, and so my cost will increase from $12 to the cheapest monthly plan costing $40. As a comparison it’s cheaper for me to use a UK SIM on a UK plan even in NZ, and the only thing stopping me is the cost to friends and family to call me.

Neil R.
19 Sep 2020
Shop Around

There are many better deals than $40pm. My Orcon deal is $20pm and a $5 discount if I have other Orcon products such as Broadband