Why is cell phone service not getting cheaper?

Mobile phone contracts: Are cheap providers automatically worse?

More and more providers are vying for the favor of smartphone users - many of them lure with low tariffs, offer a similar amount of data volume and telephone units as expensive contracts. How can that be?

Surely there is a catch somewhere: Hidden fees? Worse network? Bad service? These are questions you ask yourself when you see offers for particularly cheap cell phone contracts. You can often save a lot of money with them - and still be easily accessible. The answers to questions about tariffs at bargain prices.

Why can some tariffs be so cheap?

There are three network operators in Germany: Telekom, Vodafone and Telefónica (O2). Providers of low-cost tariffs do not operate their own network, but buy capacities from one of the three companies on favorable terms in order to put together their own tariff packages. If you book such a package, you may have to make compromises, explains Thomas Michel from the telecommunications portal "Teltarif.de": "Some of the network operator's services are not available to customers of the small providers."

Are the networks worse for customers of the low-cost providers?

The networks are not generally worse for them - after all, network coverage remains the same. However, there are differences in access to the LTE networks: While in the O2-Networks of Telefónica are all equal, customers of low-cost providers in the networks of Telekom and Vodafone have no access to the LTE network (for example with Congstar) depending on the provider and tariff and may only be able to use the UMTS network, which is somewhat slower for data transmission use.

However, "only" UMTS does not necessarily have to be bad. Because in the expansion of the networks there can be big differences between UMTS and LTE, between town and country and of course between network operators. Oliver Griess from the North Rhine-Westphalia consumer center therefore advises: "Before signing a mobile phone contract, you should check which network the provider is using and what network coverage is." This can be done online, for example, on the network operator's website.

Is the customer service worse?

On this point, low-cost providers differ from network operators in one point in particular: They have no shops, but usually only sell their tariffs online - which is one of the reasons for the low prices. Basically, the service is heavily dependent on the provider. "Of course the network operators have a premium claim," says Daniel Pöhler from the consumer portal "Finanztip.de". This also includes good service. Nevertheless, there are also prominent examples of poor customer service among network operators. Therefore, a low price is not necessarily responsible for poor service.

Are there any hidden costs?

"As fair as it is: Before signing a mobile phone contract, you should read the fine print," says Oliver Griess. Because calls from Germany to other countries could possibly result in high charges - in principle for all tariff models. A specialty of the cheap tariffs, on the other hand, is the so-called data automatic with data flat rates. When the high-speed volume is used up, the surfing speed is not simply reduced, but new high-speed volume is automatically booked. But these are usually only small amounts of data for a relatively large amount of money.

Daniel Pöhler therefore advises against contracts with data automation that cannot be switched off. "The usage behavior of smartphone users is changing rapidly these days," he explains. For this reason, many users find it difficult to estimate whether the monthly data volume of their contract will be sufficient for the entire term of the contract.

What should you watch out for with the notice period?

The maximum minimum term that may be contractually stipulated is 24 months for mobile phone contracts. The notice period may not exceed 3 months. But there are also many tariffs with shorter contract periods and notice periods. Customers are not at a disadvantage, says Pöhler: "On the contrary: With short notice periods, you can change quickly if the tariff no longer suits you." Conversely, the fact that the customer is terminated by the provider hardly happens at all.

Price examples for cheap tariffs

What a cheap tariff is always depends on the individual user behavior: network coverage, telephony and surfing behavior must be taken into account. Daniel Pöhler from the portal "Finanztip.de" is currently finding tariffs in the O.2-Network with an all-network flat rate and two gigabytes of LTE data volume with automatic data control that can be switched off for around 10 euros per month (as of February 2018).

If you are looking for particularly low tariffs in the Telekom or Vodafone network, you can choose the prepaid tariffs of the network operators with the required tariff options. "This gives you a good cell phone network at a fair price," says Pöhler. In the Vodafone network, for example, an all-network flat rate and three gigabytes of LTE data volume are currently available for a good 20 euros a month.