New Info On Mobile Rainbow (merged)

ChrisJBarnes · 5 February 2006 at 3:10PM

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Msols Limited has asked us to clarify it's not currently trading and not undertaking any marketing activity.

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HI i got an email back from mobile rainbow and they said this if it helps ,as i asked them the following questions. if anyone knows whether they are any good please let me know.

hi- i'm just about to take a contract out with mobile rainbow. however, before I do so, I need you to answer the following questions. If you need more info, then I will be subscribing to the Video Talk and Text 700 12 month contract with a free LG U880.

1) What is your companies registered headquarters address please
2) The full address needed for which I need to send my cashback claims to.
3) The full terms and conditions for the cashback
4) I also would like to know how you can afford to pormote this offer- it's just other companies say that they wont pricematch your deal, because they would be making a loss!! How can you afford to do this?
5) Once I get the phone, how do I register it so that the contract starts?
6) what can I use my free minutes on (0800 numbers, 0845, abroad?) and do i get double for the first 3 months?
7) How do I pay for the insurance?
8) You claim to be one of 3's approved retailers. What does this mean?
9) How long have you been trading for?

10) on a slight less technical matter- how can I choose what colour of the phone I am ordering (!!!)

thanks
chris barnes

Dear Mr. Barnes,

Please find the answers for your queries below:

The address of our company’s registered headquarters is:

Room # 11 Parade House

135, The Parade

High Street, Watford

Hertfordshire

WD17 1NA

This is also the address where you are need to send your bills for the cash back claims.

2. The cash back amount is divided equally in the 6th, 9th and the 12th month & is credited into the bank account directly within 30 days of the receipt of the bill from your side each time. The bills and the completed cash back vouchers should be received by us exactly within 30 days of the date on the relevant airtime bill. Any claims made after the required span of time would not be considered eligible for the redemption money.

In case of two packages, please attach the cash back vouchers separately for each of your phone. It is requested that you send us the required documents through special delivery as we would not be responsible for lost items or late arrivals.

Please note that we also accept a print of the online bills and photocopies of the original bills but duplicate vouchers are NOT ACCEPTED. Also, the amount is always credited to the sole account holder’s bank account & no third party entry is allowed.

To qualify for the cash back:

1. You must have cleared all your outstanding bill of your account.

2. Do not downgrade your monthly tariff plan before the minimum term of your contract.

3. Contract must be in continuation with no line disconnection due to non payments or arrears.

3. All the deals offered on our websites are promoted on an equation of “No gain, No loss”.

4. You are going to receive a pre-activated handset. So, all you have to do before you start using it is get it charged completely.

5. The free minutes can be used to call up any network (including landlines), anytime within UK but that excludes premium and non-geographical numbers (08… numbers).

6. The insurance is free for the 1st three months and then the premium is just £5.99. Payment for the insurance premium from the 4th month onwards will be taken through direct debit.

7. There are many dealers who connect customers to ‘3’ network on their behalf for pay monthly phones and we are one such authorized retailers of ‘3’ network.

8. We have been into the business for 4 years now and 1 year since we launched our website.

9. Please let us know the colour of the LG U880 (black or silver) that you are interested in by calling our customer services and we will send you the desired coloured handset.

Please call us on 0808 160 0027 and we will be glad to assist you.

Thanks & Regards

Customer Support

Mobile Rainbow

Part of Msols Ltd.

p5x · 5 February 2006 at 4:38PM

thanks for that, I don't quite understand reply #3 though, why would they bother selling them if they didn't make anything from them? I assume they didn't factor the comission they recieve from the mobile networks into the "equation"

Anon · 5 February 2006 at 4:57PM

They would have to factor the commission into the equation as otherwise they would not be able to offer the cashbacks in the first place - that is where the money is coming from (as it is with any of the retailers offering cashbacks, including the big companies such as CPW, The Link, 4u etc). Sometimes retailers may offer these at a no gain/no loss (in the individual deal - or indeed at a loss) as I understand that they may be chasing a volume sales commission bonus, plus according to the industry stats, I understand that only around 30-40% of claims for cashback go through (either due to people forgetting, or not sticking to the T&Cs) and therefore they have done the sums to know how many people are likely to take up the offer and therefore, overall, how much profit they will make after paying back any eligible cashbacks. Some of the less reputable retailers (and I am not for one minute saying that Mobile Rainbow are, as I have no experience of them) can put these offers out there as they have no intention of paying any cashback due to the way they have structured their terms and conditions (some were featured on Watchdog and others are being investigated by Trading Standards). There must be something in the individual deals as otherwise the retailers could offer all at 12 months free, knowing full well that they would not have to pay out, therefore as it is only on selected phones/tariffs there must be something in the commission that makes these offers viable (though if someone one the inside wishes to give an insight, it would be enlightening). Information is available online from one of the largest distributors, Hugh Symons (now part of CPW - this months information online at http://www.hughsymons.com/documents/hscm/pdf/2_2006_hscm_pdf_febv3.pdf), which shows how much handsets cost, commissions available to retailers etc but I feel sure this must just be part of the picture as for most of the deals you cannot see how retailers can make any money (even when not offering these headline promotions).

Personally, with all these offers, I was skeptical at first but if the business model is good enough/viable for The Link, CPW, 4u and others, then it is good enough for other (lesser known/smaller) retailers as well. However, as I ensure that I fully understand the t&cs before signing up to anything, my concern is whether the company will be around to pay up, which is not as much of a concern with the larger better known retailers.

Anon

Micky · 5 February 2006 at 6:29PM

I'm teetering on the edge of "buying" a LG U880 on Video Talk and Text 700 over a 12 month contract from mobilerainbow, but I don't have sufficient confidence in company's ability to pay cashback. So I'm still using a Nokia 1100 on PAYG.

The usual reason for offering a loss leader is to gain market share, I'm sure that's why Three offered such good deals in 2004 and 2005.

If a supplier is acting as an agent for Three and the inital contract is made using a credit card, isn't there some protection available from the credit card company if the supplier refuses to honour the cashback arrangement?

skip2mylou · 6 February 2006 at 1:15AM

if you're reluctant to try with mobilerainbow, try mobileoutlet as they've got the exact same deal (some kinda fierce competition these 2 companies have going on?!)

i dunno much bout mobileoutlet, but if it's any consolation at all, reestitmutton's site does include some of its deals.

homer_j_3 · 6 February 2006 at 2:38AM

note to mods: I am not trying to sell anything here just to give a bit more insight into how these things work.

I am able to offer mobile phone deals on contract for 3 and orange over the internet through email as I am an agent for a mmobile phone retailer. I know that if I was to offer that phone on the deal mentioned, I would earn about £70 in commission for you to go on the 12 month contract and a bit more if you went on 18 month contract.

Now the issue with the commission to some dealers is that if you default on your bill then the network can clawback the commission it has paid to the retailer.

I do not know how much commission you were offered and I am an agent so not sure how much the gross amount is paid to the people I am agents for, however, there is clearly profit in selling contracts.

The good thing about the people I work for is that they have a no clawback agreement with 3 so this is not an issue for me and therefore I offer my customers a cashback (if needed to seal the deal) based on the fact that I know I can send a cheque when I have confirmation the phone has been connected. No hassle or messing with paperwork..

The best thing about 3 at the moment is you can jump straight into the VTT1100 plan and get 3/6 months half price for £22.50 and after this period drop your call plan down to the VTT700 with no problems or questions being asked. I know some retailers offer these half price deals by asking you to send bills etc but with 3 it is all done automatically - i.e you are just charged 50% of normal tarrif for the first 3 or 6 months and is an offer by them and not a retailer using some of their commission to make the deal a little sweeter.

If you have any more questions, please feel free to ask and I will try and answer.

the_tired_one · 6 February 2006 at 9:37AM

skip2mylou wrote:

if you're reluctant to try with mobilerainbow, try mobileoutlet as they've got the exact same deal (some kinda fierce competition these 2 companies have going on?!)

i dunno much bout mobileoutlet, but if it's any consolation at all, reestitmutton's site does include some of its deals.

I thought they were both the same company.

darrenithell · 6 February 2006 at 10:29AM

The Mobile Outlet and Mobile Rainbow are not connected with one another.

It's a fact that about 35% of cash backs are claimed in full and about 55% of total cash back claimed altogether. This is a factor considered when dealers calculate their offers. Dealers can be paid over £300 per connection, they need to subtract the cost of the handset from this, plus delivery and thier overheads. Then they need to subtract the amount of cash back that is likely to be claimed. It might sound risky but if they are selling large volumes (100s per week) then it should all average out.

Simple example. Not real figures, just to show how it works...

Nokia 6020 on O2 200 with 12m free/£360 cash back
Commission paid by O2: £255+£40 bonus if they do 100+
Cost of phone (bought in bulk): £35+VAT
Delivery and overheads: £15
Average cash back actually claimed: £200
Average profit per sale for dealer: 295-40-35-200 = £40

If they sell 300 of these in a month then that will give them about £12,000 profit. Not bad at all.

squidzin · 6 February 2006 at 10:32AM

ChrisJBarnes wrote:

6. The insurance is free for the 1st three months and then the premium is just £5.99. Payment for the insurance premium from the 4th month onwards will be taken through direct debit.

I read somewhere that Mobile Rainbow used to have a clause meaning that you had to take up the Insurance for the term of the contract. If you cancelled your insurance at anytime you were not eligible for any future cashback.

Does anybody know if they still operate this way?

Thanks

darrenithell · 6 February 2006 at 5:04PM

I believe that was changed shortly after they launched their web site.

bakerrev · 6 February 2006 at 6:00PM

ChrisJBarnes wrote:

Please call us on 0808 160 0027 and we will be glad to assist you.

Thanks & Regards

Customer Support

Mobile Rainbow

Part of Msols Ltd.

Try ringing them up? "Sorry, this number is temporarily out of order"

Fills you with confidence ...

New Info On Mobile Rainbow (merged)

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