Energy retailers don’t face a unpredictable costs of doing business you say? LOL. I wasn’t comparing energy and telecoms, I was saying there’s another business that also has costs of doing business that can fluctuate wildly based often on the latest dispute between Russia and America or EU or whenever Saudi Arabia sneezes. Energy retailers have figured out how to survive with these variables and the fact that their prices are heavily regulated, means it’s possible to do so, especially where telecom prices aren’t as heavily regulated.
I don’t begrudge businesses being able to raise their prices if their costs of doing business go up.
What I don’t support is the fact that them raising prices by 3.9% every year is not considered enough cause for me to be able to terminate the agreement without penalty, simply because every single one of them bakes this into the contract.
I don’t know what the tories have to do with it. My council tax went up over £200 compared to last year. The previous year, it also rose by 4.5%.
The only way out is to sell my home and move at the cost of a 2.5% stamp duty charge when I buy (and all the considerations of finding a home at a location suitable for work and family), so I’m captive and the only risk to the folks running the council is that my one in 200,000 vote might go against them :).
It’s the same sort of situation with the Telecoms. It doesn’t matter what kinds of excuses you can spin up for them, we’re captive to a great extent, because they provide an essential service, and regulators haven’t decided whether to regulate them more.
Yes, these are all costs of living, and I don’t have the leverage to transfer these costs to my employer. Telecos have the power to impose these terms on me because my options are limited. I understand how the business justifications for the design of the pricing structures is. It’s not because PAYG is more expensive to provide than contracts. It’s designed to maximise revenue: Pay a lot more, OR sacrifice your flexibility for a small discount that we can still continually erode year over year with CPI adjustments. What you gonna do about it? All our peers are doing the same because that’s the mathematically optimal pricing strategy, and you’re gonna get weary of calling year over year to haggle for a better deal, because it’s not worth your time to contest the latest 40p increase in your bill.
They have to do this because our system demands perpetual growth, measured every 3 months. So, they have to design their products in a way that gives them the leverage they need to borrow the sums they require to game the system so that they report growth every 90 days (as you have adequately described)… the end result is we’re on a perpetual treadmill of rising prices, fuelling rising costs of living fuelling higher levels of debt in both individuals and government… no wonder we’re toying with the idea of totally divorcing the creation/expansion of money supply from the reality of production capacity – we’re already well underway on this journey.
Now if you’ll excuse me, I’ll go back to earning some money so that the government can take 43% of it (I know the math, I didn’t make that number up).