Vodafone's letting some customers escape contracts, but it doesn't have to
Vodafone's introducing changes to out-of-plan charges this August, and it's giving customers who could be particularly affected by new pricing an opportunity to ditch their contract without penalty. The carrier's revised pricing model is pretty simple: come August 10th, every multimedia text you send and every minute you're on the phone beyond your monthly allowance will add 45p to your bill. In some use cases, like video calling a friend on a rival network, the new flat rate will be cheaper; but, in several more instances, 45p is higher than the charge currently in place. For most customers, the changes are likely to go unnoticed, but in a strangely altruistic move, Vodafone is reaching out to those at risk of being negatively affected and giving them the option to exit their contract, no questions asked.
We say altruistic because Vodafone is under no obligation to offer customers this out, since the changes to out-of-plan charges aren't the concern of telecoms regulator Ofcom. As you may be aware, Ofcom introduced rules last year that meant customers on any mobile network could bail on their contract scot-free if the monthly cost of that agreement was increased during its term. Vodafone has to obey those regulations, of course, but it's also the only major carrier in the UK that doesn't include an inflation clause in its contracts. An acceptable caveat under Ofcom's rules, the inflation clause allows pricing to rise mid-contract, but only once a year in line with the Retail Price Index (currently 0.9%).
As part of its "fixed-price promise," Vodafone has decided to take the spirit of Ofcom's regulations and extend it those who'll be most impacted by the impending changes to out-of-tariff charges. The provider is looking at the last three months of activity on every customer's account, and essentially recalculating their bills as if the new pricing for over-allowance charges was already in effect. All customers with revised bills that would see them out of pocket by more than the Retail Price Index are being contacted by SMS and informed that since their usage history puts them at risk of higher bills, Vodafone's giving them until July 28th to walk away from their contract.
All credit to Vodafone here, because while the move might inspire brand loyalty, it doesn't make much business sense. Not only is Vodafone passing up free money by letting customers who regularly exceed their allowances leave, but the option is also open to abuse. For example, let's say you're four months into a new, £50-plus per month iPhone 6 contract and Vodafone profiles you as an at-risk customer. Well, you can jump ship, handset and all, with no repercussions. Vodafone hopes the people it's reaching out to won't dump their contracts, of course, because a smaller subscriber base is the last thing you need when you've just launched a new broadband offering for existing customers.
