Tuesday, February 15, 2005

comparing mobile phone plans.

Given my mobile phone predicament, I am looking into finding a new supplier of access to mobile phone networks. This is not very easy.

Mobile phone networks all essentially offer the same product*. The service telcos are selling you is simply access to a network that allows you to transmit digitally packaged information to other users of the network.

However, telcos go out of their way to "package" the services they offer in different ways, to preclude effective comparison of services between the market players. For instance, some companies sell you access in 30 second increments (that is, you pay for 30 seconds of network time, even if you talk for only 10 seconds) whereas others sell it to you in 1 second increments (I also found one company selling it you in 26 second increments). Contract lengths also vary as do the rates for different times of the day, rates to phones on different networks, flagfalls, and prices for texts and other, somewhat peripheral services.

Another device to included to deter effective comparison of the services offered is the inclusion of “credits” in the deal - that is you pay a minimum monthly access fee and then you receive a certain amount of “free” calls per month. Of course, the real value (how long you can talk for) of these “free” calls will with the call rates applied (that is, $10 of “free” call time at 10c per min, is worth the same as $20 of “free” call time at 20c per min).

And of course, this is not including the problems arising from the coupling of network access and the phone handsets!

The stated reason for this product differentiation is to allow people to find the plan that best suits them. Spare me.

It is to prevent effective comparison of an essentially homogeneous product that allows the telcos to charge an uncompetitive price well above their marginal costs. Now this is one of the reasons these babies are pulling in such nice profits.

So what do you do?

Well, Choice have a reasonable overview of how to initially approach the situation, although it gives you no idea about how to set about constructing a quantifiable comparison.

These guys have a “calculator” of some sort, where you need some data from previous bills and enter it in, and it can give you a list of plans that are good for you. But it doesn't actually allow to compare how much a bill under one plan will cost under another plan, and doesn't incorporate the value of handsets into the comparison. If you are keen/angry/anal/bored then you could use their "browse plans" thingo to create a dataset that you can then wack into Excel and then develop a set of equations to estimate costs, and then actually have a quantifiable ranking of the best plans suited to your consumption pattern**.

This all being said, I know that;
(a) This is a comparative static assessment and consumption patterns are likely to change so as to reflect consumer optimisation under different plans; and
(b) This is terribly boring, but I spent ages last night making up that spreadsheet and I wanted to write about because I think that it works, and the plan that I am choosing is not bloody vodafone (who I am not going to dignify with a link).
(c) I should probably get out more - that is why I am going to see Debbie Does Dallas: The Musical, at the Atheneaum theatre tonight.

* I know this is a slight simplification, as there are some substantial differences between services offered - for instance, there are different areas covered by different networks.


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