Hidden cost of telephone calls increasing

27/11/2008

The hidden cost of telephone calls has increased over the course of 2008. This is according to a report produced by the Swedish Post and Telecom Agency (PTS). The longer charging intervals is the main reason behind the increasing cost.

Charging by second increments, as was the previous established practice, has almost completely disappeared and been replaced by a much longer time interval. In practice, this means that consumers pay for a longer period of time than the actual duration of the call. It is mainly the charging interval for mobile telephony subscriptions using a pre-paid card which has become longer compared with last year.

The duration of the charging interval has a great impact on consumers’ total monthly cost for mobile telephony. The cost for a call lasting for one minute and one second is nearly twice as much when comparing a charge per minute with a charge per second. Other hidden costs that have increased over the course of 2008 include the opening fee for subscriptions, opening charges and charges for paper invoices.

“Consumers are accustomed to mainly looking at the charge per minute. Hidden costs make it more difficult for consumers to foresee the amount of the bill and to evaluate various offers. This is why we are continuing to strive for the operators providing clearer information about prices and terms,” says Stefan Williamson, head of the Market Analysis Section at PTS.

The report also shows that prices for electronic communications services are not changing as much as they did a few years ago. One of the reasons is that the operators are compensating for slightly lower charges per minute with hidden costs. Information from PTS’s price report will be used as a basis for PTS’s regulatory work, which is intended to provide consumers with a wide range of services at satisfactory prices.

Read a summary of the report

For more information please contact Stefan Williamson, head of Market Analysis, tel. 0708-114 053 or PTS's Press Office, tel. 08-678 55 55.

The Swedish Post and Telecom Agency (PTS) monitors the electronic communications and postal sectors in Sweden. The term ‘electronic communications’ includes telephony, the Internet and radio. The Agency works with consumer and competition issues, efficient utilisation of resources and secure communications. Read more at www.pts.se.