T-Mobile UK’s gotten a fair bit of press over the last few days for its new Flext tariffs, heralded as “a new way of charging for mobile” that T-Mobile says is “a move to cut tariff confusion”. Confusing tariffs confound mobile users all over the world, and it’s been a key strategy of MVNOs to offer simplified, easy-to-understand charges for calls. So what’s really lurking beneath T-Mobile’s marketing hype? Very little.
With the Flext plans, a customer gets into a minimum 18-month contract and pays a set amount each month, and receives an allowance for charges — an allowance that doesn’t correspond to what they’ve paid (ie, for £25 pounds, you get a £60 allowance; if you spend £35 you get a £180 pound allowance). Charges are then billed against that allowance, so users don’t have to buy a plan that says they get X minutes and Y text messages per month — they’re only charged for what they use.
Which sounds exactly like… pay as you go, but with the lovely added bonus of an 18-month contract. But unlike prepaid, what customers don’t use at the end of the month appears to be lost, despite the carrier’s MD’s saying that with typical tariffs, “Many customers are actually leaving money on the table, not using up all the minutes they have paid for.” It’s also hard to see how keeping track of the pound-value left in a month is any easier than going “oh, I’ve got 200 minutes and 30 texts left”.
Really all T-Mobile has done is make it look like they only have one tariff. But instead of changing their prices (or changing the number of bundled minutes and texts, as they’d done before), the “allowance” a user gets changes depending on how much they spend. How, exactly, is that any simpler? The only value here is that prices may have dropped, but things really haven’t gotten any simpler, or much more flexible.
The beauty of this, though, is that it’s all relative. Since their competitors’ tariffs aren’t any more straightforward, T-Mobile can tinker a bit, send out a press release, and suddenly they’re the consumer champion. This isn’t tariff reform, it’s marketing. And if this is the best an incumbent carrier can do, it’s not going to do much to slow down churn. Well, after that 18-month contract is up, anyway…





It makes T-Mobile’s billing systems a whole lot easier. Rather than piss around with bundles of minutes etc for each subscriber, they can just make a single posting of X pounds or less to the account at the end of the month.
Not sure what the impact on the finance systems will be though? It will give a false picture of turnover, but maybe that’s what they want…
[...] Are simple, straightforward tariffs too much to ask for? Orange is now the second UK operator in about a month to revamp its tariff structure, following T-Mobile, and it’s the second one to embrace complexity. What do the operators have to hide in making things so confusing? [...]