O2 Slashing Handset Subsidies (read: Raising Phone Prices)

fiish

I was out in town today and saw some signs that confirm this report:

http://www.mobiletoday.co.uk/O2_slashes_handset_subsidies_on_top_end_phones.html

Basically O2 is trying to lead the market in cutting subsidies, making top end phones more expensive for us, and really, IMHO, trying to get us consumers to pay more for less. This policy is applying to upgrades/retentions as well so the deals might very well start getting worse from here on. As reported and I saw in the shops, N95 8GB will now be available for free on the £75/month tariff only, as opposed to the £35/month it was before.

I agree with the report that with strong demand for the iPhone O2 are in a good position to do this, and the iPhone and its O2-exclusivity is part of the reason the other networks are offering good deals anyway.

Incidentally, I also saw a Vodafone shop advertising this fact with the tagline 'O2? O dear!'

digp

they're getting greedy - prob would never have happened under Peter Erskine.

gaming_guy

fiish wrote: »

Incidentally, I also saw a Vodafone shop advertising this fact with the tagline 'O2? O dear!'

i saw a load of photocopied sheets saying that in my local vodafone store the other day.

apparantly the price rise was because of all the troubles with the (rather rubbish ) iphone 3g crashing the credit check system - more here (4th post down)

digp

"The move this week was triggered after O2 saw its customer acquisition budget drained from the huge demand for the 3G iPhone."

Llyllyll

digp wrote: »

they're getting greedy - prob would never have happened under Peter Erskine.

Where's he gone and who's taken over then?

digp

It may be Matthew Keys (not too sure) but Peter Erskine has definitely left:

from http://www.o2.com/about/erskine.asp

Peter Erskine. Non-Executive Director (56)




Profile

Peter Erskine was appointed to the Board in 2001 as Chief Executive Officer. He joined the Company from BT where, since March 1993, he held a number of senior positions including Director of BT Mobile, President and Chief Executive of Concert, and, from 1998, Managing Director of BT Cellnet. Prior to joining BT he was European Vice President of Sales and Customer Service for Mars and Senior Vice President Sales and Marketing for UNITEL. Mr Erskine is also a member of the Advisory Board of the University of Reading Business School.
Following Telefónica’s acquisition of O2, Mr. Erskine became Chairman and Chief Executive of O2 and also joined the Board of Telefónica, S.A. as an Executive Director.
Mr. Erskine stepped down as Chairman and CEO on 1 January 2008 and re-joined the board on 1 February 2008 as a Non-Executive Director.

Woby_Tide

digp wrote: »

they're getting greedy

not really, the concept of expecting a free phone with a contract is a very English thing, in most other counries you'd always be paying upfront for at least part of the handset, sounds more like they are standardising throughout their mrkets

Hasty1991

Woby_Tide wrote: »

not really, the concept of expecting a free phone with a contract is a very English thing, in most other counries you'd always be paying upfront for at least part of the handset, sounds more like they are standardising throughout their mrkets

...more like it's the one sweetner that gets people on a contract. Otherwise we'd be like other countries, far less obsessed with the actual phone, and just paying for what we have to.

...but they WANT us to be on contract, don't they

fiish

Well if the manufacturers have raised prices on the handset then the increases will eventually hit us the consumers.

On another hand, previously 'luxury' features such as touch screens and GPS have filtered down to mainstream models, and the top of the line models do that with fast performance to boot, so we can't really argue we're not getting more phone for more money.

Plus in the current economic climate where those affected by inflation are cutting costs here and there, the mobile is a logical lifestyle item to cut back on. It's cheaper and better (in terms of freedom) to go with SIM only, especially since phones tend to last longer (well many models do anyway) these days.

Those left buying top end handsets are generally less sensitive to pricing - fair play to the business if they want to take advantage of that.

epz_2

fiish wrote: »

Well if the manufacturers have raised prices on the handset then the increases will eventually hit us the consumers.

i think the bill of materials for the n96 is significantly less than the n95 so its not the manufacturers.

proplusplus

I think it might be better just to buy direct from manufacturers as Nokia have realised they can do.

Nokia are offering the handsets direct, then they probly take a cut of the sign-up commission from the networks.

proplusplus