Mobile phone companies serve a bill alert though email or via SMS when you are about to exceed your plan limit. Many of us feel that this makes things better for us. However, just the opposite may be happening, pointed researchers from University of Toronto Mississauga. Bill warnings can be more costly because cell phone companies adjust their plans and fees accordingly to maintain profits. They found that while some consumers do benefit, others either decrease or stop usage, end up with more expensive plans or continue to underestimate their usage and choose the wrong plan.
Matthew Osborne, assistant professor of marketing at University of Toronto Mississauga, said, "Fixed prices go up, free minutes go down and then some of the overage rates drop. But the overall effect is that the average person pays more."
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Nomophobia is the fear of being out of mobile phone contact. The term was coined by the Great Britain Post Office while conducting a survey on the anxieties and difficulties of mobile phone users.
Researchers used monthly billing data for a group of student cellphone customers. In the data and modelling the researchers used, bill shock alerts cost people $33 extra on an average. People who chose to stay on the most expensive plans fared best.
Are Mobile Phones Contagious?
Watching others checking their incoming messages or emails prompt people to check their own mobile phones, reveals expert study. The habit of checking cell phones may be contagious.
The research should lead policymakers to reconsider what measures will actually benefit consumers. It could have application to other services where consumers need to monitor their activity to avoid extra costs, such as banking overdrafts, utility services and even health insurance.
The study appears in American Economic Review.
Source: Medindia
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Mobile phones emit non-ionizing radio frequency waves and operate in a frequency ranging from about 850 to 1900 megahertz (MHz).
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