UK subscribers overpay on mobile contracts, study finds

Three-quarters of mobile subscribers in the UK are paying an average of £195 too much every year on their contracts, the Ofcom-approved price comparison site Billmonitor has said.

According to Billmonitor's national mobile report, UK mobile subscribers waste around £4.9bn a year, or around a third of the country's annual retail mobile revenue. £2.62bn of this is wasted on contracts that include more minutes or texts than are needed — Billmonitor says this represents an average 44 percent overspend.

£1.53bn is spent on out-of-allowance charges levied on those with too small a tariff, and £740m is wasted on poor optimisation of contract length or the 'free benefits' that come with some tariffs, Billmonitor said. The company also suggested that people were not good at estimating the amount of data they would need to use each month on their smartphones.

"It's notoriously difficult for people to estimate their real data usage, as different mobile internet behaviours have very different data usage requirements, with no easy-to-grasp real world corollaries," Billmonitor said. "Who knows the difference between reading an e-mail (10kb), visiting a website (1.5-2MB) or watching YouTube (roughly 3.8MB for every 5mins) on a mobile? If it's hard enough for customers to estimate their real calling usage, how much more difficult to estimate data?"

Billmonitor got its statistics from analysis of 28,417 anonymised phone bills. Interestingly, the research showed that people in the UK spend around £1.36bn each year on roaming calls, texts and data usage — £443m on data roaming alone.

"Fewer post-pay customers (23.6 percent) use data roaming but the distribution of spend mirrors that for roaming calls," the company said. "The top five percent spend £564.84 a year, while the 95 percent majority ironically spend five percent of that amount — just £29.64."

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