Why 3rd party providers cheaper than main provider?

aviii

I upgraded with EE thinking they gave me the best deal.
later i found the same deal with a 3rd party provider to to be cheaper.

same phone, same network, same deals - expect the monthly payment was £11 cheaper...

i tried to see if EE would give me this same deal - but they basically said if i was not happy to return my phone and sign up with the 3rd party..

why would the third party ( car phone warehouse) be cheaper? does anyone know why EE would not match it?
i guess they are still getting my business, however i am very tempter to change providers

mobilejunkie

Er... because the network pays commission to third parties, who can choose to use some of it to reduce the cost to attract business; it is also the dealer who then supplies the phone, which they may buy cheaper. The network's role is to provide the service so some are happy to farm out at least some of the marketing to third parties. Changing networks won't make much difference. Also, the best deals are through dealers using cashback contracts. Sounds like you're an amateur so that might not be the best way for you.

Frozen_up_north

The best deals are usually to keep your phone and go SIM only. Buying a phone on a 24 month finance deal is not cheap.

The networks and high street shops love to upgrade customers... 2 years of income for them at your expense.

Guys_Dad

I, too, have often wondered why networks charge more that the 3rd parties, to whom they have to pay a generous commission.

Seems nuts to me.

System

It's the same reason all the networks have cheaper MVNOs.

They set a higher price for those that don't want to switch around or want the 'assurance' of the network - whilst also getting those that shop around via retention deals and third parties.

It's called Price Discrimination in economics.

username

The other reason you may see better prices from dealers is that the network sometimes offers bonuses/connection targets to dealers and they use those to susbdise the costs of the devices and/or offer cashback.

It is often prevalent on new connections which is why you may see more aggressive on new connections than on upgrade packages on the dealers' website for the same phone and package.

EE probably would not match it for a number of reasons - perhaps there is an exclusivity clause not permitting EE to openly offer such tariffs that dealers have (and vice versa), or the available 'spend' on the account was not enough to bring the price down.

Once upon a time if you caned the data with certain operators, you would not be entitled to any or very little discount, no doubt, this was down to the costs of sustaining heavy data usage. Also, a lot of heavy data users rarely made calls and so didn't generate much revenue in respect of termination charges. Whereas, if you used the phone more, or went over the bill or roamed etc, there would be slightly more room for manoeuvre.

aviii

Martin Lewis made getting mobile deals easy - I spoke to EE upgrade team who could not help, next day i spoke to returns teams and again did not help - basically tell me to go else where.

yet how did Martin Lewis security guard who only had his contract for two years manged to reduce his monthly contact from £41 to £15..

did he name drop as thats an amazing reduction.

keith1950

Probably because he was out of the minimum term on his contract yet still paying the original tariff and has changed to a SIM only deal to get a good price.( No new phone ).
Everybody seems obsessed about getting a new phone after two years when they could get a greatly reduced tariff instead by going SIM only.

mobilejunkie

Sounds like he was paying too much in the first place.

[Deleted User]

Experience with mobiles.co.uk cancelled my order because I failed a credit check but couldn't say why I have had mobile phone contracts for years. Checked on their website and the deal is no longer available.

System

craigr98 wrote: »

Experience with mobiles.co.uk cancelled my order because I failed a credit check but couldn't say why I have had mobile phone contracts for years. Checked on their website and the deal is no longer available.

Its not just your history with mobile phones that is taken into account. The reasons are the same as for why people can't get loans or credit cards - poor credit record, defaults, late payments, high levels of debt, not being on the electoral roll at the address they want to use...