Meet Honest Mobile, the phone firm promising to CUT customer bills

With the price of everything rising, many want to save money where they can.

But when it comes to necessities like food, travel, and our monthly mobile bills, it’s hard to scale back.

We all now know the cost saving benefits of opting for a Sim Only contract – a mobile phone deal where users who have paid off their handset only pay for using the phone.

But even on Sim Only deals, if you’re with one of the big four networks, you’ve probably had a huge bill increase recently – with many dealing with 15 percent price hikes on mobile bills.

Honest Mobile wants to change this. Launched in 2019 by college friends Andy Aitken and Josh Milhill, the company aims to shake up an industry that has long been in need of disruption.

Honest Mobile sells Sim-only mobile phone contracts and piggyback rides on major carrier Three’s mobile network.

Unlike the big cell phone companies, Honest Mobile deliberately doesn’t tie annual price increases to inflation, and in fact promises to lower the phone bills of loyal users.

We speak with co-founder and CEO Aitken about Honest Mobile’s offerings and why its new smart Sim could help millions of Britons stuck without a signal.

‘It’s a scandalous market’

The mobile industry is currently dominated by the four largest carriers – EE, O2, Vodafone and Three – who account for about 80 percent of the market share. They also own most of the infrastructure needed to operate mobile phones.

When these firms raise their prices, as most have done in the past month, users are already locked into a long-term contract and overpaid.

“You could write a sitcom episode about someone complaining about their mobile network and the joke would be funny in any market in the world,” says Aitken.

“Everyone hates their mobile network.”

“Everyone knows that they are constantly being sold to. Nearly everyone had a price increase of 13 to 19 percent at the beginning of this month for no good reason, other than that it was legal.”

The remaining 20 percent of the market consists of virtual operators such as Giffgaff and Tesco Mobile, which have done good business by offering cheaper plans than the big four.

O2-owned Giffgaff currently offers unlimited data for £35 a month, while Tesco Mobile offers it for £25 a month or £22.50 for users of its Clubcard loyalty programme.

The incumbents are already trying to undermine these spirited smaller companies with introductory deals. For example, Vodafone customers pay £16.50 for six months of unlimited data.

Aitken said: “All they’ve really done is differentiate on price so they’ve all raced to the bottom but overall they’ve made a really big compromise like they don’t support 5G or you can’t use your phone . calling abroad.’

The boss of Honest Mobile believes that there is little disruption in the industry and that it is the customers who bear the brunt.

“They try to sell you unlimited data when the average Brit uses four or five gigabytes [a month],’ said Aitken. “They try to encourage you to buy a new phone every two years, even though most customers are now holding onto it for four or five years.

They try to take advantage of you. It’s a blatant market.”

‘The bar is so low’

Instead, Honest Mobile wants to offer customers a better deal. It’s not the cheapest on the market, but Aitken thinks there’s little point in competing on this front.

“We’re not going to beat them on price… Giffgaff is owned by O2, so if it wants to lower their prices further, they can. We don’t want a price war with Tesco because it’s a huge company with big profits that would beat us anyway.’

Interestingly, Honest’s unlimited plan is actually on the cheaper end of the market, costing £25 a month – £10 cheaper than Giffgaff.

It still makes a 30 to 40 percent profit margin on each Sim, but its main focus is on customer support. Aitken is so dedicated to the cause that he even spends some of his time solving customer problems himself.

It’s hard to imagine the chief executives of the four major cell phone companies working a Saturday as customer service representatives, and this focus is probably why Honest’s average response time has been 24 seconds for two years in a row.

“We wanted to have customers who loved us and recommended us,” Aitken said. “That’s where we started. We said if we could build a mobile network that people really like, we’d be on to something because the bar is so low.”

However, the real differentiator is the company’s transparency. If you’ve signed up for an unlimited data plan, but you’re using less than 10 GB of data per month, Honest will warn you and ask if you’d like to switch to a cheaper deal.

Over time, customers with Honest’s loyalty discount can also see their bill drop each month, up to a maximum discount of 30 percent.

One of the big problems for Honest Mobile is that while it may be trying to do things differently, it still operates in a de facto monopoly.

Honest Mobile has just over 4,000 customers, which barely dents the customer base of even the smallest network providers.

Millions of Britons are stuck on 12 or 24 month mobile phone contracts, meaning that even if they want to switch, they’re stuck for now.

There’s also the issue of moving to a largely unfamiliar network, which could put some customers off. But Aitken says this isn’t much of a problem, especially since Honest uses the network of the well-known firm Three.

“I think the challenger banks and fintechs helped with quite a bit of leg work there,” Aitken added. “Years ago, if you had suggested to my dad that you use an app to bank, he would have laughed at you, but now that’s exactly what he’s doing.

“We do the heavy lifting, we do the customer support, the app, the billing, but as for your phone, which is handled by a company with 13 million customers, the infrastructure is handled by a competent infrastructure player.”

New smart sim addresses signal issues

One of the ways Honest Mobile hopes to increase their market share is by launching their smart Sim this summer.

This allows users to connect to all four networks in the UK, rather than just one, to ensure you’re rarely without a signal.

While the government and Ofcom work to increase coverage, large parts of the UK are left with patchy reception.

Aitken says there are 9 million people in the UK who do not have coverage from all four networks or describe how they feel about their coverage as ‘extremely unhappy’.

“There are places where there’s just no signal,” he said.

“Even in central London there are places where if you’re in the wrong seat in a restaurant, there’s a steel beam in the ceiling or something that stops you getting a signal, but the person you’re sitting with does have a signal.

“It seems odd that you can’t jump to whatever network they’re on and connected to.”

Honest Mobile also wants to extend this to the use of your phone abroad.

“If you want to use messaging, maps, Uber or banking abroad and you have the smart Sim, it doesn’t cost anything extra,” Aitken said.

“It means that if you land at an airport in America, you can currently choose whether you pay £6 to the network to turn on your data to get an Uber, or you take a yellow cab, or you buys a local Sim, what a real faff. Now you can turn on your smart Sim and hail an Uber for free.”

The smart Sim, which can be installed as an app rather than a physical card, can run in parallel with an existing Sim and costs an additional £5 to £10 per month.

“It opens up a much bigger market for us because we don’t have to switch people,” Aitken said.

‘We can serve people who already have a 24-month contract. Over time we can build that trust, they’ll see how well the service works and hopefully then we can transition them to the core product.”

Honest Mobile has now received a vote of confidence in the form of its latest £3 million round of funding, which was led by This is Money and MailOnline owner DMG Media’s venture capital arm, DMG Ventures.

With venture capital and the launch of the smart Sim, the number of customers is likely to increase, and Honest is likely to grow its customer base to 50,000 within two years, Aitken expects.

As part of the round, Honest is also giving its customers and supporters the chance to invest through crowdfunding platform Seedrs. See here for more details.

This is part of our new series looking at companies disrupting industries that traditionally lack innovation.

We’ll be looking at some of the most exciting companies in industries we encounter every day that want to do things a little differently.