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Vodafone ups price of pre-pay calls through charging by the minute

Vodafone is now going to charge its pre-pay customers by the minute for calls instead of by the second, meaning higher bills for those customers not on contracts.

Calls for pre-pay customers on Vodafone cost 25p a minute, so under the new charging arrangements if a customer calls for one minute and one second they will pay 50p.

Vodafone said the change would come into force on 1 August, telling customers via a short text message that it would "simplify" charges. On its website Vodafone said, "No more complicated pricing by the second. Just clear, straightforward per-minute charges."

Understandably some customers have taken to social forums to complain about Vodafone taking them for fools - it is, after all, a straight price increase.

Vodafone defended the change, saying in a statement, "We believe that by offering propositions with a generous allowance of minutes, we continue to offer our customers great value. Many of our competitors already offer price plans charged in this way."

That's true. Customers with Orange or T-Mobile - part of the EE network - are already charged on a per-minute basis. But O2 and Virgin Mobile still charge by the second, with a one minute minimum charge.

Vodafone, like all other operators, is trying to drive customers onto more profitable minimum contracts - usually of two year's duration - with the carrot of a smartphone bundled into the package of more minutes, unlimited texts and mobile Internet data allowances.

Notwithstanding Vodafone's planned increase in calling charges for pre-pay customers, recent research from the OECD (Organisation for Economic Co-operation and Development) showed that mobile customers that get "free" or "subsidised" smartphones with mobile contract packages may be paying more than simply buying the phone separately and then buying a pre-pay service to support it.

The OECD looked at 12 countries for its research, including the UK, and found that users with bundled phone and service contracts could be paying $10 to $20 (£13.90) extra per month.

A number of operators have ended smartphone subsidies for customers who choose to go on a pre-pay service, although those that still describe "subsidised handsets" as part of bundled service contracts should describe the phone as just that - "bundled" - as customers are still paying for it, said the OECD.

The OECD said that where extra costs were present in bundled service contracts, the customer should be made aware of them. For instance, in Australia and Italy, operators disaggregate the cost of the handset device in their monthly bills to customers, "which empowers consumers by revealing the associated cost of a smartphone".