Sunday, November 02, 2008

Optimor, a business for our times

The last thing consumers are going to give up in these times of frugality is their mobile phone. Their link to the world.
But, they will certainly want to spend less on these phones.
Currently European users spend about £100bn annually.
Could they spend a lot less?
Ofcom logoImage via Wikipedia
Ofcom estimates that only 23%% of us are on the right tariff and Optimor estimates that we could save about 32% ie £3.3bn (UK Only!)per year IF we were on exactly the right tariff.
Every year 33% of us switch operator - in an attempt to save money.
That's 22m UK switches per annum (8.6m contract users).
The costs to the operators of this churn has been variously estimated but clearly runs into many billions.
Of course, there are price comparison engines which will encourage you to switch based on some fairly superficial evaluation of the minutes you use, the texts and the Mbytes handled (do you have a clue how many of these are whizzing through the phone?)

TAG has been working with a group of Mathematicians from Oxford University led by Prof. Chris Holmes and the founder, Stelios Koundouros, himself a Phd in Maths from the other place (Cambridge) to develop the world's most powerful algorithm for analysing and forecasting usage (of mobile phones, expenditure of all kinds) and comparing it with the literally 10's of thousands of tariffs out there. The company is called Optimor.

The service, which will monitor your phone bill automatically every month - after you give it access to your on-line bill - will recommend the best tariff, provides tips for future usage and generally ensure that you are spending no more than you need.

The service, code named Karoosh (apparently Japanese for death through overwork!) will be released in private beta in the coming few weeks. If you can't wait and want a play with the Alpha, go to the Karoosh blog

My own bill analysis showed me that I can simply save over £200 per year - the regular comparison sites which simply asked me for my minutes and texts would have sent me to a more expensive tariff than I currently have.
Karoosh independently test 38,279 plans & add-ons across the major UK operators.

The telco industry's reaction to Karoosh (or whatever it will be called in future) is going to be interesting. It seems to me that the operators would do better to help consumers find the right tariff within their own network rather than keep fighting for users to switch from another network to theirs.

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  1. It definitely sounds like a great idea, however the restrictions imposed by mobile carriers (ie 18 months contract and downgrades of your tariff allowed only after x months, if at all) might prevent some people from being able to take any action in the short term.
    To put in other words... mobile carriers' generally poor services and deceiving tariffs will keep ruling the business, or am I missing anything?


  2. You are right Fabio, carriers do not make it easy to swap or downgrade. You can understand that to an extent. After all they do subsidise the handsets. However, despite this, 22m users DO switch every year.
    Optimor will aim to maintain a relationship, through the provision of useful information, to the user throughout their contract and they will switch if necessary or shift to a lower plan when allowed. Optimor's goal will not be to encourage switching but to help optimise users tariffs.