Tuesday, 20 December 2011

An Orange Error of Judgement

Did you hear about Orange's 4.34% price hike to contract phones? The increase will be applied in January to all pay-monthly customers who got their contract before mid-September. My parents are each on a £10 a month contract with them, so this amounts to them paying another 43p a month, or £5.20 a year, each. A small increase, but an unexpected one. This is a legal move; in the small print it says that they can increase their prices by the rate of inflation each year (currently 5.4%). But is it really worth their while?

There has been uproar. Over the course of a 24 month contract (which many contracts are these days), customers will be paying almost enough for another month's usage at the price they signed up for. Many people did not realise that there was even the potential that the price would change. I feel that Orange will lose far more than they gain – brand loyalty in a market as competitive as mobile phone tariffs is very hard to build up, so an unexpected and somewhat unfair (although legal) price increase would probably lose them more money in customers leaving than the increased revenues they bring in now.

Are you on Orange? Would you care if this small increase happened to you? I would be annoyed if O2 did this to me, but would probably remain loyal to them unless another company provided as good network coverage in Cornwall!!


saving for travel said...

I agree, Orange will lose far more than they gain.

Sft x

Pamela said...

They'd better be careful. It's not a phone company, but Bank of America caused all kinds of a rukus with their proposed fees, and they had to back down when people started to move their money to new banks--and credit unions.

lizzie said...

They think such a small increase isnt going to make people bother to change. They tried to put a $5 annual fee for using an ATM card recently.
Big protest and they had to withdraw the proposal. Outrageous.
If they wont drop the charge look for an alternative.

Life In The Thrifty Lane said...

Thanks for visiting and for the sweet comment! Merry (Belated) Christmas to you too :)

kernowyon said...

My first "contract" phone - and, because of this scam from Orange - it will be my last (at least with them!)

I could understand it if they bothered to explain things in advance (maybe when I signed up?) but this is a total rip off - and I will not renew the contract.

Very disappointed.