T-Mobile’s contract customers must pay £75 to upgrade

Contract customers can pay £75 or take a £5 discount and wait until January

T-Mobile’s contract customers must pay £75 to upgrade their handsets in a new scheme designed to stall upgrades and save cash until the new financial year.

For those not wishing to shell out, T-Mobile is offering customers a £5-per-month discount in what is being labelled a ‘Christmas loyalty bonus’.

The inability for customers to upgrade their handset for free has prompted many independent retailers to churn them onto other networks and even, in some cases, churn them off T-Mobile, only to sign them back on as a new customer – a tactic that actually costs T-Mobile more money than a conventional upgrade.

The £75 fee even extends to T-Mobile’s direct channels, but staff at the retailer’s stores said they could use the retention team to negotiate a free upgrade over the phone in exceptional circumstances. T-Mobile will also try and wean the customer onto the Google G1 phone, which is exempt from the restrictions.

T-Mobile staffers have said, as a result of the £75 charge, most customers choose not to upgrade and have money off their contract instead.

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3 is first to announce VAT strategy for tariffs and prepay

Carphone and Orange are also showing the decrease ahead of 1 December

3 has announced it will introduce VAT cuts across all tariffs this weekend, bringing savings to contract and prepay customers ahead of the 1 December official date.

It is the first network to reveal how the tax cut will affect contract and pay as you go customers. Orange will apply discounts early but only on handsets

3 tariffs will still be displayed as normal in store and online but the 2.5% reduction will be automatically deducted at the point of purchase for the duration of VAT cut.

Price cuts will be applied automatically to pay monthly customers’ bills and PAYG customers will receive a credit as they top up e.g. a £10 top up will result in £10.18 credit. The savings will be for new and existing customers.

Meanwhile Carphone Warehouse has already started reflecting the VAT decrease in its stores around the country. However, this is only on hardware as how the tariffs are affected will be dictated by the networks.

How the discount will be reflected on contracts on other networks is still unclear. The 2.5% has been criticised for as being too small to offer a meaningful discount on both contract tariffs and prepay handsets.

Orange has announced it will also reflect the VAT decrease early this weekend but the discount will be on handsets only. Orange’s decrease is on all handsets unless already free with a contract.

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