Yep, the ecomony is f......reefalling!
You can’t say our coverage of the up-to-minute Mobile stories isn’t there, be it devices, services, or Industry news – IntoMobile is always on the case! We even cover wider news that pertains to given countries/economies, and how that affects Mobile – in this case it’s the UK, and the measures that are due to be taken in the next Government budget…
As you might know if you keep up with (Inter)National news, the UK Govt is planning to implement a Value-Added Tax (VAT) cut from 17.5% to 15% – a drop of 2.5%. VAT is the tax that is added to (most) items that are being retailed in the UK – certainly most consumer electronics goods fall in to this category.
Interestingly, the analysis from experts has shown that for the average person, the cuts might not count for much unless you are making big purchases – one example being that if you were buying a new car (a Mini) you might save £300 or so on the retail price. Of course, 2.5% of a small number is a very small number, hence the small savings on everyday items….
The Govt’s thinking is that this cut will free up money for people to spend, hence stimulating the economy – but most people who I have seen interviewed on TV said this was no more likely to make them go out and spend. In fact, people seemed to be looking for savings on utility costs – and in the main energy, and/or Council Tax charges.
As it pertains to Mobile then, assuming we are talking about contract Mobile Tariffs, a small saving on the VAT might have a small related effect – but of course, Mobile companies have long been finding ways to offer significantly larger perceived savings, without actually cutting customer bills e.g. you get 20% more call time or texts for the same money each month.
In these leaner economic times, people have either begun to, or you assume will start, looking to review their utility costs – and the Mobile bill could easily be one of the more significant monthly costs – coming in at anywhere from £20-80, that means about £250-1000 per year!
My take is that whilst the Govt changes may have little or no effect, it will be very interesting to see what the Mobile Operators do to both attract new customers, and keep existing ones – perhaps we should expect even better ‘teaser’ deals in the coming months.
Oh, by the way, that 2.5% cut in VAT is apparently going to cost the Govt £12.5 billion in lost ‘revenues’ to them – nice. Wonder who will be picking that bill up? I’ll give you a clue, the answer starts (and ends) with ‘us’!