Mobile Phone Networks

In this guide we investigate, score and rank the ethical and environmental record of 15 mobile phone networks.

We also give our Best Buy recommendations and give a price comparison.

About Ethical Consumer

This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

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What to buy

What to look for when choosing a mobile phone network:

  • Is the brand run by a co-operative or its users? We stress the benefit of co-operative ownership in our ranking system. Companies that are accountable to their consumers and members are often more transparent.

Subscribe to see which companies we recommend as Best Buys and why 

What not to buy

What to look for when choosing a mobile network:

  • Do they pay their fair share of tax? Avoid those companies who score a worst Ethical Consumer rating for the likely use of tax avoidance strategies.

Subscribe to see which companies to avoid and why

Score table

Updated live from our research database

← Swipe left / right to view table contents →
Brand Score(out of 20) Ratings Categories Positive Scores

Our Analysis

This guide looks at 15 mobile phone networks. The Big Four (O2, EE, Three, Vodafone) have their own mobile network infrastructure. The other 11 operators are called ‘Virtual Mobile Network Operators’ (VMNO) as they provide services by ‘piggy-backing’ on existing infrastructure.

Apart from the very top and bottom of the score table, there is not much to separate most of the networks. Ecotalk is the standout ethical brand, whilst three brands – Three, Tesco and ASDA – languish at the bottom of the table. The remaining 11 networks are separated by only a few points.

The major issue in the industry is tax avoidance, of which much more below.

We have focused on Vodafone, once synonymous with tax avoidance, and Lycamobile. They appear near the top of the score table, but this position belies their still dubious tax practices.

What’s changed?

In one sense, not a whole lot has changed since we last looked at mobile phone networks two years ago. The Big Four (EE, O2, Vodafone, Three) continue to dominate the market overall and EE still has the biggest individual market share (23%).

But look further down into the minor placings and there have been some changes and rearranging:

  • The People’s Operator went bust in February 2019.
  • TalkTalk mobile remains in name only: they are no longer accepting new mobile customers and instead are offering existing mobile or broadband customers access to special deals with their network partner, O2.
  • The Phone Co-op is now owned by the Midcounties Co-operative, which means its Ethiscore drops from 12 to 5.5.
  • There are two new virtual operators on the scene: Sky and Ecotalk. The latter is run by renewable energy supplier, Ecotricity, hence the ‘eco’ in the name.

In our rating system, companies that have a licensing relationship (such as piggy-backing) with another company will lose marks in categories where the partner company has received major criticisms.

For example, Telefónica (which owns O2) lost whole marks under Habitats and Resources, Human Rights, Workers’ Rights, Political Activities, and Anti-Social Finance. Therefore, the networks using O2 to provide mobile services (Lycamobile, TalkTalk, Tesco) lost an additional half mark in each of these categories.

In the same way, companies using the EE network lost additional half marks under Pollution & Toxics, Human Rights, Arms & Military Supply, Political Activities and Anti-Social Finance.

Who piggybacks on whom?

The table below shows the networks used by each VMNO and what effect this relationship had on the network’s Ethiscore.

Virtual Mobile Network Operator Service provider Negative Effect on Ethiscore
ASDA EE Nil - ASDA-Walmart's own Ethiscore is 0
BT Mobile EE Nil - BT owns EE
Ecotalk EE -2.5
Lycamobile O2 -2.5
TalkTalk O2 -2.5
The Phone Co-op EE -2.5
Plusnet EE Nil - Plusnet is owned by BT which owns EE
Sky Mobile O2 -2.5
Tesco Mobile O2 Nil - company is a Joint Venture between Tesco and Telefonica
Virgin Mobile EE -2.5

Tax avoidance

Vodafone

Not long ago, Vodafone was synonymous with tax avoidance. In 2010, it was accused of making a ‘sweetheart deal’ when it handed over £1.2 billion to settle a row with HMRC over its Luxembourg arm.

In 2014, UK Uncut protestors targeted Vodafone for paying no corporation tax since 2011. In 2014, it made a profit of £59.4 billion in the UK but paid no UK corporation tax for the third year in a row. The finger was pointed at the company’s Luxembourg-based subsidiary, Vodafone Procurement Company (VPC), which the company claimed to use for centrally managing strategic procurement and to ‘leverage scale and achieve better prices and terms’. Critics pointed out that the company “funnelled revenues through the country to avoid tax in Britain”.

Vodafone’s initial response to these accusations was to complain that the protesters didn’t understand tax, that the company was a major investor in the UK (such as in 3G and 4G infrastructure, from which Vodafone directly benefited) and a major source of direct and indirect employment.

The following year, however, Vodafone became the first multinational to publish country-by-country financial data and it now provides narrative explanations for subsidiaries based in jurisdictions on Ethical Consumer’s list of tax havens, including the Cayman Islands, Jersey, The Netherlands, and Luxembourg.

This means it now receives our best rating for ‘likely use of tax avoidance strategies’. Our rating is based on a company’s policy on its operations in tax havens. It needs to have a narrative as to why it has operations there. It also needs country-by-country reporting which provides revenue, tax, investment and employment data for each country that a company operates in so you can see, to a certain extent, what’s happening in each country.

However, this doesn’t mean that Vodafone is now paying corporation tax.

It’s just more transparent and better at explaining its tax affairs. In its ‘Tax and our total contribution to public finances 2018’ report Vodafone explained why it paid “little or no UK corporation tax” in 2018 despite making a profit of £168 million.

image: fair tax protestors vodaphone tax avoidance sign vidaphone tax dodgers
In 2014, UK Uncut protesters targeted Vodafone for paying no corporation tax since 2011.

Vodafone says it had to deduct in excess of €500 million for the interest costs on its UK debt from £10 billion it borrowed to pay the UK government for its 3G and 4G licenses. It then had tax relief on the €1.3 billion it spent in 2018 on building and upgrading its networks and services. “The UK remains an expensive and highly competitive country in which to do business; it is also one of our least-profitable markets anywhere in the world”, claims Vodafone.

The jury is still out on whether the leopard has changed its spots. It still receives third party criticisms for potential tax avoidance practices. For example, a report in December last year by Shareholders for Change analysed Vodafone’s tax report for 2018 and found that there was a potential for profit shifting to low-tax jurisdiction countries.

“The largest share of Vodafone’s profits (38%) are generated in two conduit [low tax] jurisdictions, Luxembourg and Malta, where the group has just 325 employees (out of a total of 108,271 employees worldwide).

Whilst Vodafone should be applauded for being a leader in tax transparency, the data shows how this multinational has chosen to structure itself to minimise taxation in countries in which it operates. This has likely resulted in significant revenue losses for the UK (and other countries’) tax authorities. This is particularly detrimental for developing countries, as they rely on corporation tax receipts more heavily than developed countries do.”

In May 2018, the company was challenging the State of India in an Investor-State Dispute Settlement (ISDS) over a $1.8 billion tax bill. Also known as corporate courts, ISDSs are international courts through which corporations can sue states for loss of future profits if laws are changed.

ISDSs usually meet secretly, are presided over by corporate lawyers and provide no right to appeal once a verdict has been made. The dispute dated back to 2007 when Vodafone acquired India-based telecommunications company Hutchison Essar Ltd. through a Cayman Islands-based subsidiary. Indian tax authorities claimed the underlying assets of the shares transferred derived value in India and slapped Vodafone with a 120 billion rupee ($1.8 billion) tax bill. At the time of writing the outcome of this was still pending.

Lycamobile

Lycamobile was embroiled in a £26 million tax dispute in 2017 with HMRC over VAT. Lycamobile’s accounts also revealed that it paid £72 million to another part of Subaskaran’s business network, based in the lowtax jurisdiction of Madeira, which the company said was for phone airtime.

In 2012, it had paid no corporation tax for three years. The HMRC is currently trying to fine Lycamobile £8.2 million for the tax it thinks the firm owes “for the financial years 2012 and 2013 combined.” Lycamobile has set aside £10.5 million.

Our Tax Avoidance rating

We rated the networks in the Anti-Social Finance column for their likely use of tax avoidance strategies. Only a quarter of them got our best rating, with half of the companies covered getting our worst rating.

Best – Ecotalk, Phone Co-op, Vodafone, Lycamobile

Middle – O2, Giffgaff, TalkTalk

Worst – Virgin, BT, EE, Plusnet, ASDA, Sky, Three, Tesco Vodafone and Lycamobile still get third-party criticisms for tax avoidance and therefore a full mark in the AntiSocial Finance column.

Why is the Phone Co-op a Best Buy?

For twenty years, The Phone Co-op was an independent consumer co-operative owned by its members. In June 2018, it merged with Midcounties Co-operative Society, a Midlands co-operative retailer.

Midcounties is the largest independent consumer co-operative in the UK and is a member of The Co-operative Federal Trading Services, a buying group owned and controlled by each of its member societies but managed by The Co-op Group.

Midcounties picks up the usual supermarket negative marks for selling things like non-organic meat, products with palm oil in, and animal-tested cosmetics.

That accounts for The Phone Co-op’s drop in score from 12 to 5.5. But it also picks up positive marks because it follows The Co-op Group’s policies in areas such as environmental reporting and supply chain management and use of toxic chemicals.

We are still recommending The Phone Co-op as a Best Buy because, like Ecotalk, it is an alternative provider in the networks market. Within the co-operative movement, Midcounties has a reputation for being the most active co-op in the group for promoting and developing the co-operative business model. Aside from retail, it runs other innovative businesses co-operatively such as Co-operative Nurseries which now has 45 nurseries across the UK.

Midcounties was also a pioneer of the Fair Tax Mark whilst the Fairphone, our mobile phone Best Buy, is available from The Phone Co-op.

Mobile phone mast made to look like a pine tree. On North Downs near Dorking. Surrey
Mobile phone mast made to look like a pine tree. On North Downs near Dorking, Surrey.

Should I get a 5g phone?

5G is so-called because it is the fifth generation of wireless communication standards. In May of this year, EE, Vodafone and Three rolled out 5G networks in the UK with O2 set to launch their 5G network in October 2019. 5G coverage is currently available in 17 towns and cities on at least one mobile network.

5G essentially means that download speeds will be substantially quicker – you’ll be able to download a film in seconds. It will also have lower latency, the time it takes for something to happen.

At launch, 5G connections will be around five times faster than the best 4G networks, but eventually it will be between ten and 20 times faster than 4G.

In the future, probably after 2023, 5G will enable ‘the internet of things’ – connected infrastructure, turning everything from lamp-posts and roads, to bins and bike racks into smart objects and including the much-vaunted self-driving cars.

Unlike the move from 3G to 4G, the rollout of 5G requires different infrastructure, so new masts will have to be built. But you’ll need a new phone, a 5G enabled one. And your network contract will probably cost more.

It won’t be until 2022 that 5G will take over all of the ‘core network’ functions. Until then, the 4G network is going to still be used for most things other than downloading data even when connected to 5G, including calls and managing connections.

2G and 3G networks are still in operation but they’re expected to be phased out across the UK by 2020 so you’ll have to get a 4G enabled phone then. It will be several years before the 4G signal gets shut down leaving just the 5G network.

So, there’s no point in getting a 5G phone, especially not at this early stage in 5G’s development and if you don’t live in one of the 17 cities currently covered.

Only 41% of rural areas currently have 4G coverage and it’s unlikely that the more expensive 5G technology will make it very far out of urban areas.

More importantly, from an environmental point of view, it only makes sense to get a new phone when your old phone stops working. When that happens, you might want to think about getting a 5G one to future-proof your device.

How to switch provider

It’s now much easier to switch to a more ethical network provider. You used to have to phone your current network provider when you wanted to switch and request a ‘porting authorisation code’ (PAC) to give to your new provider if you wanted to keep the same phone number.

From July 1st 2019, you’ve been able to cancel your contract by sending a single free text (‘PAC’ to 65075 to keep your old number or ‘STAC’ to 75075 get a new one) to your current network and they will send you a switching code. Give that to your new provider and they will switch you within one working day – regardless of whether you have a contract or pay-as-you-go phone.

Once you’re out of your minimum contract, mobile providers will also be banned from charging you for the remainder of your notice period after you’ve switched (which is typically 30 days), putting an end to paying for your old and new contract at the same time.

You will, however, still be charged early termination fees if you leave before the notice period of your existing contract.

There are two sorts of contracts you take out with a mobile phone network:

  • A pay-as-you-go deal where you buy your own phone and pay for each call, text or time you spend on the internet.
  • A monthly contract where you pay a set amount each month, usually by direct debit, and either get a phone ‘free’ or a ‘SIM Only’ deal which you can use with any phone.

Company profile

Owned by Sri Lankan-born tycoon Allirajah Subaskaran, Lycamobile gets the bulk of its income from selling international pay-as-you-go SIM cards to customers wanting to make international telephone calls.

Between 2011 and 2016, Lycamobile made donations totalling £2.2 million to the Conservative Party. The largest single donation was £542,500 in March 2016. It also donated use of a call centre to Boris Johnson during his 2012 London mayoral election campaign.

In 2018, it was revealed that the HMRC had refused to assist a 2016 French investigation into Lycamobile and alleged money laundering activities. The HMRC cited Lycamobile’s donations to the Conservative Party. Lycamobile was the biggest corporate donor to the Conservative party at the time but it has taken no donations from Lycamobile since then. The investigation is ongoing.

Lycamobile was ordered to pay €20 million in bail after its two French companies were formally charged with money laundering in a Paris court.

Want to know more?

If you want to find out detailed information about a company and more about its ethical rating, then click on a brand name in the Score table. 

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