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Is The Age Of Free Mobile Phones Set To End?

As the EU Commission again takes a look at the European mobile phone market there is now a real danger that the age of the free contract phone may be ending. The Commission has suggested a number of price reductions which will cut the profitability of the major mobile phone networks and take away the opportunity to subsidise handset prices to aid take up.

Among other pricing elements the Commission has been looking at the way in which mobile phone companies co-operate on cross border calls, the so called roaming charges. The suggestion is that these roaming prices are too high and the networks are raking in over £1 billion a year between them. There are even calls for the caller and the recipient of the call to be charged, a situation which is common in the US.

If any of the suggested changes are introduced into the UK market they have the potential to change the market set-up overnight. Subsidies will end on many handsets, call charges in general will rise and pay as you go customers may bear the brunt of the changes. Either way it looks as though the mobile phone market as we know it will be changing over the next few years.

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