MSE News: Tesco Mobile to sell the iPhone

fiffio

if tesco come out with the same tariff prices as 02 and Orange then whats the point of them having the iphone?

with vodafone selling the iphone in the new year the only way this makes sense for tesco is to undercut them and bring in new customers otherwise people will stay on the network they are on and upgrade to iphone at the end of their contract.

I reckon the tariffs may be similar ie £28-£30 a month but the additional price on the phone may be slightly cheaper as tesco may be able to subsidise the cost of the phone?

Just doesnt make any sense for tesco to offer the exact same prices as they dont gain anything from it and the customers they would be looking to keep are mostly low end anyway.

I have read about possible a possible overstocking of the iphone 3g so maybe this has been factored in as Tesco usually buy in bulk at discount rates? Maybe they can offer the 3g on payg for slightly cheaper than the others?

Wallhart

Tesco have said they wont be offering a much cheaper handset. The difference will be the contract. I'm assuming this means clubcard vouchers or possibly mins and ntext but cant imagine o2 allowing them to do that

fiffio

its not a case of 02 not allowing them to do things etc!

the venture is 50:50 owned and tesco have a contract to use the 02 network etc for x many years and this will not change now they have the iphone.

Okay 02 will get a fee from Tesco for this but i reckon Tesco can charge what they want tariff wise and offer the phones they want without having to worry about what 02 is going to raise. (an example being that Tesco getting the iphone was a completely independant negotiation from the one 02 had with apple years ago.)

I'd be more worried about apple price fixing but as Tesco have fingers in so many other revenue streams they can afford to even break even on the phone to get more mobile customers signed up and increase market share. They are upping the number of Tesco mobile shops in the stores by over 50% next year....

The want to bring some of the Tesco value to the iphone so it will likely be a cheaper package but by how much is the question.....

Wallhart

Fair enought but I have read that they will not be competing on the handset price. (From the mouths of Tesco apparently) and that it would be on the contract. So it could be duration, number or txts and mins etc or maybe clubcard pts

gjchester

fiffio wrote: »

if tesco come out with the same tariff prices as 02 and Orange then whats the point of them having the iphone?

Quite simply if someones on Tesco (or Virgin or any other virtual network) and wants an iPhone they have to leave and go to currently O2 or Orange. By these carriers offering the iPhone they hope the customer won't leave.

As has been mentioned tarrifs and prices are set by Apple so there's very little chance of a price war.

Take Ipods.

Tesco sell ipods, 64gb Touch is £298.97, 4gb Shuffle is £59, 8GB Nano is 114.97. Re refurb 8gb Nano is £88.97

Apple Store prices are 64gb Touch is £299, 4gb Shuffle is £59, 8GB Nano is £115. Re refurb 8gb Nano is £85.

You may save a few pence on an Ipod buying in Tesco rather than direct from Apple, hardly a price war on over them, although you'd get a few pounds back in clubcard points too.

Apple have always controlled prices of the hardware they sell, they have it, you want it and they charge.

Oneday77

Tesco do offers like spend £50 in store get £30 off any phone and clubcard points. SOo things like that will make the iPhone cheaper to some. Not to mention if enough networks join the race and the prices don't change is there not a law against price fixing? Look at the big fine BA got when Virgin grassed them in for Transatlantic flights being fixed
It is about time the networks were investigated for things like that. Also Apple hardware tends to be the same price everywhere as once it's sold teh company doesn't make much more from you. With a phone networks make more on extra expenditure on your bill and Apple sells you apps, jailbroken means no warranty for 18-24months till contact is up. So a risk many people won't take means Apple has a bigger audience to sell to.

property.advert

I'm not sure suppliers can dictate end user prices to sellers in the UK/Europe !

fiffio

gjchester wrote: »

Quite simply if someones on Tesco (or Virgin or any other virtual network) and wants an iPhone they have to leave and go to currently O2 or Orange. By these carriers offering the iPhone they hope the customer won't leave.

As has been mentioned tarrifs and prices are set by Apple so there's very little chance of a price war.

how many people are paying £30 a month on a contract with Tesco? Tesco's main customer base are low end low volume users who are unlikely to pay whats required for the iphone and if they were then they will have done so over the last few years!

I imagine the tariff prices are set by apple to an extent but not 100% as tesco can choose what margin above this that they want (Hence orange prices dont match 02's exactly. It may be worth Tesco having little to no margin to increase market share and drive poeple into thier mobile shops and supermarkets.............

Snakeeyes21

Id like to know why the competition commission hasn't looked in to apples dealings with the the mobile networks yet

RevTheory

Snakeeyes21 wrote: »

Id like to know why the competition commission hasn't looked in to apples dealings with the the mobile networks yet

because the european competition commission have ruled it legal, and because EU is more powerful then UK, our comission havent got a say in the matter