UK Prepay vs Contract: A complete joke!

The pre-pay (pay as you go) in the UK is an absolute joke, I have been looking at what is on offer and it really flocked me off. I checked my email today and in it was a weekly email from Martin Lewis (of Money Saving Expert), and it was details about the cheapest pre-pay provider here in the UK. As the podcast team reported a few weeks ago from the 1st of September ASDA are the cheapest provider at (8p per minute and SMS at 4p).

My rant comes in two parts: –

1. Why can MVNO’s such as ASDA and IKEA (the second cheapest provider) provide such good call value, yet their host networks Vodafone and T-Mobile are able to put UP prices a few months ago to 20p a minute? I know that the MVNO’s must be putting the price close to the wholesale price as the possibly can to get market penetration, however your average ‘normob’ is losing out. The other thing is that out of contract my call price is 20p; however Ewan can vouch that on Vodafone it can be up to 35p. It infuriates me that as contract customers we are being charged up to over 4 times the rate as a prepay customer on a MVNO on the same network.

2. It is actually cheaper to ring Poland, USA, China or Australia on Lebara (who uses Vodafone) at 4p per minute then it is to ring my next door neighbour at 10p per minute on Lebara. I know the ethnic MVNO’s use VOIP for the international bit of the call, however I think it is ridiculous that is cheaper to ring the other side of the world then it is to someone in the same country.

It’s not all negative there is a real hope that there will be a price war (hopefully the traditional MNO will be forced to join in) now that the cheapest pre-pay providers are the virtual networks.

Hopefully those of us on contract will not be left out as well. (Well I can dream can’t I?)