Nav: Home

Market competition sets tone for lower cost of UK mobile phone contracts, research shows

July 26, 2019

Healthy and competitive markets - and not stringent regulations - help dial back the cost of mobile phone contacts, according to new research.

Consumers in the UK benefit from comparatively cheaper bills than many of their counterparts abroad because regulations over contract length and costs are kept to a minimum.

Instead, market competition, where companies vie to offer the best deals to customers, provides the most effective way of keeping prices down and promoting a good service.

A team of law experts from the universities of Warwick and Exeter conducted the new study by comparing the strength of regulations of several countries worldwide.

While factors such as geography can also play a role, the research team found that consumers face higher bills and costs - and have less choice over which provider to select - when contracts are tied up in greater amounts of regulation.

The experts suggest that keeping regulations to a minimum creates "friendlier markets" for both providers and consumers, which can lead to significant price decreases.

Dr Timothy Dodsworth, from the University of Exeter Law School said: "We have found competition should be a key part of the mobile phone market, as it means companies must provide the best service for consumers in order to stay in business. It is part of the reason the UK has some of the lowest bills in the world.

"Smaller businesses find it harder and more expensive to function in a highly regulated market, and strict regulations mean only a few top companies dominate it.

"This means there is very little competition, and therefore no real reason to lower prices and improve services."

Academics examined the way mobile phone contracts were regulated in Germany, Britain, USA and Canada for the study.

They found regulating mobile phone contracts can discourage new companies from entering the market, and so reduce competition and choice for consumers.

While in Europe the length of contract is now determined by the EU, Canada has introduced more regulations in an attempt to manipulate the market to be more competitive.

However, this meant that companies with no flexibility to reduce or adjust fees and costs, meaning contract prices have stagnated - compared to price falls in many other countries.

"Adverse effects can also be seen in Europe though.", Christopher Bisping from the University of Warwick explained, "Before the EU introduced a sector-wide maximum length of 24 months, there was a range of different contract lengths available, allowing consumers to to pick whatever length best suited their needs."

The USA is thought to have the least regulation of mobile phone contracts in the world, but official statistics are not kept.

In the UK the regulator Ofcom has introduced new rules around contract length but has taken the decision to not introduce other regulation because it considers there is enough competition in the market.

Dr Dodsworth said: "Ofcom are acting in a sensible way by letting the UK market balance itself, and this should remain their policy if consumers are to have the best service. Examining other countries show if you try to regulate how contracts are renewed or the initial commitment period this has a knock-on effect on the price people pay or has other unintended consequences."

In Canada prices for consumers with lower than average consumption rose by roughly 16 per cent after the introduction of the "Wireless Code" legislation in 2014. However, for average consumption users, the cost remained steady between 2013 and 2014, and higher than average consumption contracts (CAN$80 and above) dropped from an average price of CAN$93 in 2013 to CAN$80 in 2014.
-end-


University of Exeter

Related Science Articles:

75 science societies urge the education department to base Title IX sexual harassment regulations on evidence and science
The American Educational Research Association (AERA) and the American Association for the Advancement of Science (AAAS) today led 75 scientific societies in submitting comments on the US Department of Education's proposed changes to Title IX regulations.
Science/Science Careers' survey ranks top biotech, biopharma, and pharma employers
The Science and Science Careers' 2018 annual Top Employers Survey polled employees in the biotechnology, biopharmaceutical, pharmaceutical, and related industries to determine the 20 best employers in these industries as well as their driving characteristics.
Science in the palm of your hand: How citizen science transforms passive learners
Citizen science projects can engage even children who previously were not interested in science.
Applied science may yield more translational research publications than basic science
While translational research can happen at any stage of the research process, a recent investigation of behavioral and social science research awards granted by the NIH between 2008 and 2014 revealed that applied science yielded a higher volume of translational research publications than basic science, according to a study published May 9, 2018 in the open-access journal PLOS ONE by Xueying Han from the Science and Technology Policy Institute, USA, and colleagues.
Prominent academics, including Salk's Thomas Albright, call for more science in forensic science
Six scientists who recently served on the National Commission on Forensic Science are calling on the scientific community at large to advocate for increased research and financial support of forensic science as well as the introduction of empirical testing requirements to ensure the validity of outcomes.
More Science News and Science Current Events

Best Science Podcasts 2019

We have hand picked the best science podcasts for 2019. Sit back and enjoy new science podcasts updated daily from your favorite science news services and scientists.
Now Playing: TED Radio Hour

Erasing The Stigma
Many of us either cope with mental illness or know someone who does. But we still have a hard time talking about it. This hour, TED speakers explore ways to push past — and even erase — the stigma. Guests include musician and comedian Jordan Raskopoulos, neuroscientist and psychiatrist Thomas Insel, psychiatrist Dixon Chibanda, anxiety and depression researcher Olivia Remes, and entrepreneur Sangu Delle.
Now Playing: Science for the People

#537 Science Journalism, Hold the Hype
Everyone's seen a piece of science getting over-exaggerated in the media. Most people would be quick to blame journalists and big media for getting in wrong. In many cases, you'd be right. But there's other sources of hype in science journalism. and one of them can be found in the humble, and little-known press release. We're talking with Chris Chambers about doing science about science journalism, and where the hype creeps in. Related links: The association between exaggeration in health related science news and academic press releases: retrospective observational study Claims of causality in health news: a randomised trial This...