What price for my loyalty (mobile phones)

I originally signed up with my current mobile phone provider when they were known as BT Cellnet, before I switched to their pay as you go service called BT Cellnet U, which was then renamed Genie, then they demerged from BT and became mmO2. That name was finally shortened to the company we know today as O2. As you can see we have a relationship that goes back a fair way, to be precise I have remained a loyal customer for over 9 years.

In a saturated market such as mobile phones loyalty is very valuable to the providers so when I called O2 today to tell them I was thinking of switching to Vodafone it was to be expected that they would try and offer me an improved deal to retain my custom.

For years I had remained on a £10 per month deal which included unlimited free text messages and 50 off-peak minutes per day. This was great but as my mobile phone usage changed I found that the peak calls I was making were costing me around £5 per month in addition to my line rental.

So a couple of months ago I called O2 and asked them to switch my tariff to one that included 200 anytime minutes and 200 free text messages for £15 per month which had the added bonus of 1MB free browsing allowance each month. This was on a rolling 30 day contract which gave me time to search around for an even better deal.

This search led me to a deal with Vodafone which basically offered the same calls and text allowances for £15 per month with no contract. The bonus was that if I signed up via the cashback site Quidco I would receive £90 cashback after 4 months.

I then called O2 to tell them that I had found this great deal with Vodafone and was thinking of leaving. As expected they asked for the opportunity to try and come up with a new deal for me. After a few minutes on hold they came back offering a 18 month contract with 200 anytime minutes and 400 text messages for £10 per month (the usual price is £25) plus they would give me a £150 credit on my first bill.

This effectively means my total line rental charge for the next 18 months will be £30, or in other words £1.67 per month. In total this represents a £240 saving over the next 18 months compared to the tariff I was already on and all I have given them in return is a commitment to remain a customer for that time.