Swedish Consumer Agency mandates total contract phone cost disclosure. Forgets to include data plans
In what is probably a first for the mobile world, the Swedish Consumer Agency (Konsumentverket) has just announced that it is now requiring operators to fully disclose the total cost of phone contracts.
It’s long been on the minds of ‘those in the know’ in this industry that ‘free phones’ given out by your friendly local operator aren’t free at all. In fact, their cost is hidden inside that of your monthly contract. And you’re only told how much that will cost you each month, since that’s a low enough figure to seem acceptable. Many think that if more consumers would learn the total cost of a contract upfront, they’d perhaps choose to go prepaid and buy their phones outright.
I don’t think so, but I can’t be against more transparency, which is basically what the Swedish Consumer Agency is asking for. The mandate applies to phones, PDAs (!), as well as tablets sold with contracts from mobile network operators.
However, strangely the Agency has decided not to make the operators include data plan costs in the ‘total cost’ they have to disclose. So while we’re one step ahead with the whole transparency thing (at least in Sweden), there’s another important step just waiting to be made. The Agency has said that these regulations may be changed or expanded in the future – yet why it chose to do a good thing, but then not do it 100% is beyond me.
Still, those who hate operator-imposed long-term contracts and the ‘free’ phones they bring should be happy today. Maybe this will turn into a trend, at least in Europe, and then they’ll be even happier.
I think that most people, when presented with the option, will still get a ‘free’ phone or smartphone, despite the fact that they’ll end up paying dearly for it in the long run. It’s just a matter of psychology (though I’m no expert). Paying a lot upfront seems worse than paying a little bit every month for the same thing. Especially if you don’t know for sure how much those included minutes cost, and how much of what you’re paying each month is for the phone itself. Also, some people just can’t afford (or don’t think they can) to pay the ‘full’ cost of a phone when getting it.