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View Full Version : Why is it mobile operators always charge you at the start of a contract?


ChristopherW
28-10-2007, 06:49 PM
It's something I've wondered about, and for some reason I can't quite get my head around billing cycles, initial payments and various operators (had contracts on O2, T-Mobile and most recently 3). At least O2 unified their billing cycle and the direct debit date so you didn't have to constantly budget for two individual billing cycles!

One thing all the networks do is charge you an initial amount though - just seen the "first payment" from H3G on my bill. T-Mobile was like this, and so was O2. Why do they need to extract an initial payment when you pay your bills in arrears? The more I think about it the more I get confused, but by my way of thinking they take this money from you and then you don't get it back at the end of your contract, right? (because you're always paying 28 days in arrears, so in effect you're paying 19 months of a contract for 18 months of service).


.... This of course could just be me getting overly confused about something that's really simple, you'd think that having had 3 contracts I'd have a better understanding of how they work their billing cycles! Someone please enlighten me or correct me, because it's driving me nuts.

themaddoctor
28-10-2007, 07:07 PM
The answer is that you get charged the line rental up front (you will usually get the bill for this within 2 weeks of signing up, its just the calls, texts, data etc that are in arrears (eg you get billed after a month).

ChristopherW
29-10-2007, 01:59 AM
So if I've been charged the £28 within the first couple of weeks (which I have), does it then work on the principle that when the next bill comes, it's the out-of-allowance usage for month 1 and the line rental for month 2 (and the next bill is ooa usage for month 2 and rental for month 3 and so on)?

themaddoctor
29-10-2007, 02:21 AM
So if I've been charged the £28 within the first couple of weeks (which I have), does it then work on the principle that when the next bill comes, it's the out-of-allowance usage for month 1 and the line rental for month 2 (and the next bill is ooa usage for month 2 and rental for month 3 and so on)?

Yes you are correct and when you get your final bill (after giving 30 days notice) you only pay for any other charges on your account but no line rental.