This piece first appeared in The Daily Telegraph on 19 February  2000
The text here may not be identical to the published text

Look beyond the signals in mobile phone fashion

upgrading problems

A mobile phone may be for Christmas but it certainly is not for life. No sooner is the box in the rubbish than a newer, higher technology, cooler model hits the shops and the 49.99 handset you bought is suddenly on sale as the 9.99 bargain basement offer. So if your phone is looking a bit of an old dog, what will it cost to replace it?

The networks have a dilemma with upgrades. A new customer who pays a monthly bill will already have cost them around 100 in subsidy on the handset. So the last thing they want is to subsidise a newer model before they have recouped their investment from profits on calls. On the other hand, with contracts allowing customers to change networks without penalty, someone who wants to upgrade can do so most easily by becoming a new customer of another network, getting the subsidy again. They can even keep their number though that may cost up to 35 transfer fee. So when a customer asks to upgrade, the network or service provider has to subisidise them again or risk losing them to a rival.

So most service providers will offer deals to customers who want to upgrade but the generosity of the deal depends on how valuable they are as a customer. The longer they have been with the network and the more they spend each month the better the terms of the upgrade. Sometimes it costs nothing above the price of the new handset. And of course the shop will be very keen to sell the hands-free kit, the in-car charge, the leatherette case and all the other accessories which, oddly, will not be portable from the old phone.

Once the new handset has been bought, it takes a minute to open the back of the old phone, remove the small SIM card, and pop it into the new one. The only problem is if the old phone is really old or really cheap and has a large, credit card sized SIM then there will be a delay while the service provider sends a new, small one by post. The SIM card contains details about the customer and should still keep all the favourite numbers on the phone book.

Why upgrade?

Newer phones have features that old ones do not. Some phones, especially on Orange and One-2-One networks, work mainly in the UK and just a few other countries. Newer models called dual band can be used abroad in more than a hundred countires, as can most GSM models on BTCellnet and Vodafone. There is even one tri-band phone which will work in almost any country in the world which has a mobile network, including the United States of America.

Other developments include facilities to send text messages, bigger memories for familiar phone numbers, and the ability to dictate short notes or even dial numbers as you speak them. But the newest technology of all is called WAP Wireless Applications Protocol and it allows a whole raft of new services through your telephone handset.

What is WAP?

Wireless Application Protocol called WAP is the next big thing in mobile communications. It is a way to get mobile phones communicating directly with the internet. So using a WAP phone you will be able to get the news, check the weather, deal with your finances, check on a theatre booking. Not all of these applications are currently around. But they are coming soon. Already Bank of Scotland and Woolwich are offering banking through a mobile. Woolwich has a pilot with 100 customers and will soon offer the scheme to all the customers of its OpenPlan banking service which allows customers to deal with their accounts over the internet using a home computer. From April they will be able to do it through their mobile as well.

Bank of Scotland is offering a similar scheme and says all its 3 million customers will be able to use it soon. The one snag is that each of them has a deal with one network Woolwich has chosen Vodafone and Bank of Scotland has picked BTCellnet, though this is likely to broaden out as the service develops. No details on costs are available, but the new services are designed to keep us on the phone longer, talking not to people but to computers. The BBC is developing a system also with Vodafone which will send news headlines and stories direct to the mobile screen.

Most of these services are in their very early days. And currently only one handset the Nokia 7110E can actually receive WAP signals. By one of those strange retail coincidences, everyone sells it at the same subsidised price of 129.99. So keen are some networks to grab customers onto this new technology that they will not make any extra charge for the upgrade.

Pay As You Go customers

The real losers in the upgrade stakes are the growing number the majority now of new customers who choose a Pay As You Go phone with no monthly bills who buy vouchers to pre-pay their calls. They lose out in two ways. Identical handsets are far more expensive with Pre-pay a Nokia 420k costs 19.99 on a monthly billing contract but 99.99 on pre-pay. Secondly, the cost per minute of their calls is far higher, ten times the cost in some cases. And they also cannot upgrade. Instead, they must become a new customer, on a monthly contract, and they cannot keep their phone number.

19 February 2000

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