Exclusive offer just for you
Last month they were trying to flog me a mobile contract. The "savings" compared to what I was currently paying just didn't add up.
This month, Virgin Media are trying to get me to sign up for their Big Bang Bundle. Just what would I be paying compare to now?
Get it now and it's all yours for just £25 a month for a year (then £32 after that), plus £16.99 a month for a Virgin Phone line.
|Item||Cost Now||New Cost||Extra Expense|
|152 Mb/s Broadband||£41.00/month||£41.00/month*||£0.00|
|Line Rental (18 months)||£0.00/month||£16.99/month||£305.82|
|Cable TV (first 12 months)||£0.00/month||£25.00/month||£300.00|
|Cable TV (next 6 months)||£0.00/month||£32.00/month||£192.00|
|TV License (1.5 years)||£0.00||£218.25||£218.25|
|Cheap DECT Phone||£0.00||£16.00||£16.00|
|22 inch TV||£0.00||£129.00||£129.00|
* If you upgrade any aspect of the service, standard pricing will apply to that upgrade.
So, as well as paying the same as what I'm paying now for my broadband because the "exclusive offer" is only for "up to 100Mb" broadband (which although included in the price, I am still in the 12 months contract for 152 Mb so there would probably be a penalty for a speed downgrade), it will cost me an extra £1,161.07 (including the TV, TV License, and a landline telephone).
If I were to exclude the TV and telephone purchase, then that would be an extra £1,016.07 in costs over those 18 months, or an average of £56.45/month more than the £41.00/month that I'm currently paying (and would continue to pay) for the broadband.
So, an exclusive offer that I'm not interesting in, that would increase my expenses by 137%.
I have never bought a TV. I don't watch broadcast TV.
In the last 6 months all of my calls have been over SIP (£1.00 at most), my mobile (SIP2SIM) has cost £19.83 (average of £3.31/month), and my Three 321 SIM which I use mostly for text messages has had £0.21 of its balance spent (if it truly never expires, that tenner may last 23 years).
(£1.00 + £19.83 + £0.21)÷6 = £3.51/month total in telephone usage costs.
What did that badly targeted Virgin Mobile leaflet claim last month? That it would save me £5.00 per month. The small print mentioned that saving is compared to someone not already a Virgin broadband/phone/TV customer taking up the offer. It also mentioned that the "offer" would increase every year by the rate of RPI inflation.
You read that right. Inflation! In January 2013 I posted my Cheap Telephone Calls article. Let's take a look at the SIP prices in that (Least Cost Routing) compared to present.
|Calls To||LCR 2013||LCR 2015||Inflation/Deflation %|
|UK 01/02/03||0.5 pence/minute||0.49 pence/minute||-2.00%|
|UK Mobiles (major networks)||2.352 pence/minute||1.568 pence/minute||-33.33%|
|UK 0870||1.764 pence/minute||1.47 pence/minute||-16.66%|
|UK 0845||3 pence/minute||3 pence/minute||0.00%|
The one thing missing from that table is… inflation!
How can the likes of Virgin, O2, and EE justify price increases in line with inflation when the SIP providers are clearly seeing a deflationary effect on call costs?
The most obvious answer would be to increase profit margins. Whether it be spectrum bidding, a recalculation of spectrum fees, investment in newer technology, or that company you outsource support to making your support staff redundant and replacing some of them (so a reduction in total number of worldwide support staff) with cheaper labour in South Africa and India, you have to increase prices so your shareholders get better and better returns.
When your aim is to maximise value for shareholders, you invariably disregard value for customers. In a competitive sector, that could mean losing customers to competitors.
Alas, the UK's MNO (Mobile Network Operator) sector is not competitive. With Three buying O2 mobile, we will only have 3 networks: Three, EE, and Vodafone. Ditch O2 for the better value Three and the profits from your bills will end up going to exactly the same shareholders.
Customer churn is another thing that the UK MNOs rely on. Unless there is a mass exodus it doesn't really matter because those switching from other networks for a better deal will typically be paying less than they were but more than existing customers. In fact, in 2013 O2 claimed that a low churn rate makes their customer base the most valuable in the market.
To put that another way, customer loyalty means more money when someone wants to buy your company, and it means people are willing to pay more for your shares. With only three or four (infrastructure) networks, however, even if you switch networks you will sooner or later end up back where you started, paying more than before you left.
I mention infrastructure because sooner or later the MNOs are going to start losing customers to MVNOs (Mobile Virtual Network Operators). Although the MNOs will still be getting money from the MVNOs for the underlying infrastructure, they probably won't be getting as much money as they would were the customers contracted with them directly.
This can be compared to BT Retail (and similar) line rental. BT Wholesale run the infrastructure, and their price for a year's line rental has been going down every year recently. The BT Retail and other phone and broadband companies, however, have been raising line rental prices (and call rates) because they only care about making money for shareholders.
Would you be happy with a 20% increase in line rental when the cost charged to your provider for that line has decreased? How about if they then try to justify the price hike because they want to compete with other price-gouging competitors? The fact is landline line rental from the companies with most of the market share have reached parity with not much between them (around £16.00/month).
Quad-play (or more accurately, quadruple-pay) is where you sign up for a "deal" that ties you in for a year (or more) with a single provider for your landline, broadband, TV packages, and mobile phone.
Had I not left Sky Broadband, I would now be paying a "supplement" for not also having their phone line, and another "supplement" for not having their satellite TV.
I expect now they are launching an MVNO those that said it was a "discount" for taking out multiple services will soon discover a "£2.00 supplement for not having Sky Mobile" on their monthly bill.
Who cares if Sky Mobile never existed when you signed up? O2 customers signed up for O2 Broadband, not Sky.
Broadband companies are seriously not understanding a segment of the market: some of us just want broadband.
I don't want to pay more for a landline because I don't have your broadband, and I don't want to pay more for broadband because I don't have your landline. I also don't want to pay more just because I have no interest in watching your (or anyone else's) TV.
Local Loop Unbundling
Not that many companies now allow you to have your landline with a different provider if you have broadband. Instead of only dealing with one telecommunications company that owns all the landlines, we now have a situation where Full LLU means not only do you have to take your landline from your ISP but you also have to pay a fee to migrate to another ISP's Full LLU.
And that is assuming it is possible to migrate your line. In some cases the only way to migrate to another ISP without having a new line installed (another added expense) is to go via BT (and a 12–18 month contract) before switching. Oh, and the old line will continue incurring line rental until you cancel (and pay a broadband cease fee and a line cease fee).
That is why I had my phone line with Post Office Home Phone and my Broadband with O2—neither could secretly take over the other service, nor could the Post Office unbundle my BT WLR line on to TalkTalk's network.
Unfortunately, bundled services (and minimum term contracts) are the way things are going. Something most consumers ignore when switching everything to the same provider are the fees for switching again.
For example, if you switch from BT to TalkTalk you probably won't be charged for switching, but if you subsequently wish to switch to Sky you might be looking at a cease and re-provide fee of £120 back to a BT line (and broadband) package for 12–18 months before getting a MAC code and switching to a Full LLU Sky package.
Alternatively, for the same price, you can get a brand new line installed every time you switch provider. Of course you will probably have to pay both a broadband cease fee and a landline cease fee to cancel your old line.
Shared Metallic Path Facility
SMPF is what my broadband used to be. Unlike Full LLU (MPF), this is considered Partial LLU—your landline is with a "BT" provider (BT Retail/Post Office/Plusnet) and your broadband with another provider.
The reason I went down this route when I originally wanted broadband is because O2 didn't require you have your landline with them, and the Post Office had a rolling 30 day contract and a good price on new line installations (I paid for the line to be installed).
I could have migrated my landline to another provider at any time, but I wanted to keep my "BT" (WLR) line so if I ever switched provider I wouldn't have to deal with Full LLU migration (cease and re-provide).
An advantage of SMPF LLU is that MAC codes exist, wheras MPF LLU has no real process of migration.
|Provider||MPF LLU Available||SMPF LLU Available||BT SMPF (MAC Codes)|
|Tesco (now TalkTalk)||✓||✗||✗|
As far as I know the above table is correct at the time of writing. Although EE and Plusnet are on BT's 21CN network (and thus MAC code migrations work), EE do not offer SMPF LLU broadband (you must have your landline with them).
While that sounds OK, the problem with having both landline and broadband with the same provider is that something like Tesco or Post Office might happen: you might quietly be moved from the BT network with SMPF LLU to the TalkTalk network and Full LLU.
As EE do not offer broadband only, none of the providers in the above table (other than BT/Plusnet) offer SMPF LLU broadband. Switching to MPF LLU could work out expensive if you later want to migrate to another ISP.
While MPF to MPF migration is possible, the process is not simple and will probably incur a fee.
A SIP DID (Direct Inward Dialling) is a telephone number provided by a company that then routes calls to that number to you over SIP.
When I left Sky Broadband and Post Office Home Phone I didn't have any worry about my landline phone number because I use Sipgate for a SIP DID (Watford geographical number—+441923…) so those that I had given my "landline" number too can still call it even after moving to Virgin.
No PAC code was needed because I stuck with the same SIP DID provider and my physical landline number had not been used for incoming calls for over a year (after my wired landline phone died the only thing that line was hooked up to, other than my ADSL2+ modem, was my fax machine).
Although a SIP DID is not as portable as a physical landline number, they can sometimes be ported to another SIP DID provider. For example, were I to migrate my SIP DID from Sipgate to Aloha Connect, it would cost me £29 to port away from Sipgate, an unknown amount to port to Aloha Connect (prices are available on request), and then (presumably) £1.20/month.
The thing about SIP DIDs is that they are generally much cheaper than fixed landlines. Since geographical landline termination fees for incoming calls still apply to 01/02 SIP DIDs, as long as the costs to transport the call onwards over the Internet (plus staff and infrastructure costs) is less than the termination fee received it is economical for providers to offer a UK number for only £1/month (or in the case of Sipgate, free).
In fact, Aloha Connect's sister site free03numbers.com is even able to redirect incoming calls to 01/02 geographical numbers for free because the termination fee received for 03 numbers is slightly more than the wholesale cost of calling an 01/02 number, "so a small profit is generated to enable this service to be provided free".
A free number plus free redirection to a geographical number, or redirection to a UK mobile (major network) number for 1.5p/min+VAT? 96 concurrent calls (bandwidth dependant) for a deposit of £96 (i.e. as long as you have £96 in your account, you can have 96 simultaneous calls)? Keep your number if you receive and answer one incoming call per month?
SIP DIDs do not require a physical landline and, as long as your provider stays in the business, can give you a number that is yours as long as you keep to the Terms & Conditions. In the case of free03numbers.com that means taking an incoming call at least once a month.
One of my housemates runs a business and, when the business moved premises, he needed the phone number to move as well. Because it was a different BT exchange, he was told porting the number to the new address was impossible.
What did BT offer instead? Porting his number to their expensive (compared to £1/month) VOIP service and charging hundreds of pounds a year for redirecting the number to his mobile phone.
Of course there are downsides to SIP DIDs. Your broadband connection needs to be working to receive calls, you need a SIP server to route calls to your phones, and you need compatible phones (or pay for redirection to a landline/mobile phone). You are also reliant on your provider staying in business and being able to route calls when someone tries to call you.
There are also some advantages. When I was with O2 and Sky, my modem was in modem mode (so my home server gets a public IP address) which meant some outages didn't effect me. Some outages also took out their customers' landlines making their home phone number useless.
For non-LLU landlines BT occasionally also take out the phones connected to BT kit when they do exchange upgrade work. When an exchange catches fire (it does happen) it can also take out the phone lines of MPF LLU customers.
Of course, some of these outages would also affect broadband, but if your SIP DID provider offers multiple forwarding options you can just fire up their app on your mobile phone and use 3G data, or redirect to your mobile number by visiting their Web site, or turn on voicemail, or any other additional features they might offer.
As for outgoing calls, you can (usually) set the caller ID (CLID) to that of your SIP DID accross multiple SIP trunk providers. This usually involves receiving a call to authenticate you own the number (Localphone, netSIP) or no way of using anything other than your DID with that provider (Sipgate only allows you to set CLID to your Sipgate DID, or "suppress caller ID").
In my case that means I can make outgoing calls from three different providers and my caller ID is the same no matter which provider I dial out through. It is also cheaper because I can route calls over whichever SIP trunk provider is cheaper for me for that call and I don't need to buy a DID from every SIP trunk provider I use.
When I used Skype back in 2011, it cost me £40.25 for a 12-month subscription for Online Number (it now costs £42.00 a year) which among other things like their expensive (compared to SIP providers) call charges means paying £3.50/month just for a phone number—plus they don't have Watford numbers available.
Now, something that is beneficial is that some SIP DID providers have interconnects with other providers, and/or offer free calls to DIDs also with the same provider. For example, Sipgate offer free calls to other Sipgate customers and have interconnects with telio.no and Gradwell.com.
That means that some of my outgoing calls could potentially be free if I were to use Sipgate as the trunk (and the Telio or Gradwell dialling prefix if applicable).
Unfortunately, there is no way to determine if a number is with a certain provider. Unless I look at my Sipgate call list on their Web site after receiving an incoming call, and see the icon next to the call showing that number is a Sipgate number, I will just go with Least Cost Routing (LCR) which will assume netSIP is the cheapest way to route the call.
With Localphone it is easy: all customers can get a free iNum (+8835100…) and all calls to iNums are free on Localphone.
Anyway, the reason it can be free to call numbers with the same provider is because they can completely bypass the telephone system. SIP endpoint to SIP endpoint calls via a provider only need to be proxied by the provider, and bandwidth is cheaper than calls over the PSTN.