Tesco Mobile is introducing a new ‘capped tariff’ for parents to purchase for their chat-happy teenagers.
The service will allow parents to cap the amount spent on a mobile contract each month but with the combined flexibility to top-up if required. It will be available on all handsets and tariffs on Tesco Mobile, including the iPhone 4S, which it is selling on a range of cut price tariffs.
The supermarket giant says it has introduced the price plan after research it commissioned found one in three teens assumes their monthly phone bill is just £10 or less, but 40% of parents are actually paying up to six times more than that every month.
The ‘capped tariff’ will help parents manage the monthly family spend and encourage shared responsibility with teens, giving them an early and much-needed lesson in financial management.
According to Donna Dawson, a psychologist specialising in personality and behaviour of young people: ‘A capped contract is an option as it sets an initial financial boundary, which teaches teenagers about responsibility and consideration, while giving parents the choice to extend the limit when and if they think it necessary.’
The research was undertaken by Redshift Research and Marketing Services Omnibus in October 2011 on 3,000 UK parents and 1,000 UK teenagers. It revealed that parents pay an average of £28.80 per month for their child’s phone bill with children being given their first mobile phone at an average age of eight.
On this basis, the average British family could end up spending £8,000 in total taking care of their youngster’s phone bills until they leave university.
The move comes as Mobile reveals that Sainsbury’s is throwing down the gauntlet to Tesco Mobile with plans to launch its own MVNO.
Asda has opened just three mobile stores since 2010. It launched its MVNO with Vodafone in 2007 and recently ran a pay-as-you-go trial that saw customers pay £5 for the equivalent of 100 minutes and 100 texts throughout October.
Joe Fernandez