Vodafone congratulate O2 on dropping Phones4u

Vodafone rushed in to congratulate O2 on its move to drop Phones4u, describing it as a means to ‘optimise their supply chain’. A new era in mobile phone retailing has been ushered in with the power being moved away from the retailers to the mobile phone networks. In the past the networks have relied on the retailers to sell their mobile phones and contract to the public, this obviosuly put them in a weak position. So over the last couple of years the networks have been actively developing their own retail operations by buying up high-street stores, building full e-commerce websites, and learning the tricks of direct-response advertising in the national press and online.

Now they are less reliant on retailers the networks are also able to impose tougher terms and lower commissions. In Sept 2006 Vodafone took the next step in their plan by agreeing an exclusive deal with Phones4u which excluding the market leading retailer Carphone Warehouse from selling its mobile phone contracts.

Vodafone’s commercial director, Ian Shepherd, said: ‘We’re not surprised to see others change their distribution strategies as they also seek to optimise their supply chain, following the lead we set six months ago.’ Traditionally, the reason to use a retailer rather than going direct to a network is to obtain free impatial advice about which mobile phone deal is the best in the marke place. This is no longer possible because neither Phones4u nor Carphone Warehouse are able to sell all the different networks and therefore their impartiality has been eroded.

The Carphone Warehouse may have lost Vodafone, but it has recently managed to secure a new deal with Orange, but this was only possible after CPW agreed to a new set of stringent new terms. Less money will be paid up front to the retailer, with the bulk of commissions now hinging on how much money customers spend with Orange Mobile Phones and how long they stay on the network.

Sources claimed that Orange was concerned over connections coming through Carphone’s online and off-the-page channels, where the quality of customers is believed to be significantly less than those coming through stores.

Orange have said: ‘Increasingly, I will reward and work with channels who deliver us value, not just volume.”

Who will be next to put pressure on the retailers, 3 or Virgin Mobile?



Website blunders costs 02 £100,000

The mobile phone network 02 gave away hundreds of free mobile phones in January 2007 by mistake, due to a blunder on their website. The mistake cost 02 approximately £100,000!

News about the website blunder spread like wildfire via email and internet forums, which resulted in hundreds of orders being placed in a very short period of time. Visits to the 02 website took advantage of an out-of-date link which, when coupled with a certain combination of keystrokes, resulted in a prepay phone being added to an order at no extra cost.

02 sent out about 500 handsets for free before the error was spotted, the handsets including Motorola W220s (see below) and Samsung E900s and X830s.

motorola 220

An 02 spokesman said: ‘The orders were made via an out-of-date link to our online shop for a Sim-only tariff that was no longer available. A few hundred phones had already been dispatched before the fix was in place, but all other pending orders were stopped and as no payment had been made, they were not fulfilled.’

02 is currently the leading mobile phone network in the UK with over 18 million customers; with many more customers in other countries.

Orange Mobile Phones

02 bans Phones4u

02 Mobile Phones announced this morning that from April 1st Phones4u will be banned form selling its contract mobile phones. This is clearly a response to the deal struck between Phones4u and Vodafone earlier this year, which gave Phones4u exclusive rights to sell its mobile phone contracts on the high street, effectively excluding Carphone Warehouse.

The Vodafone deal hurt Carphone Warehouse, the UK’s leading mobile phone retail, in fact its shares dropped significantly on the day the news was announced. We can only assume that this new deal was initiated by CPW as a clear sign to Vodafone and Phones4u that there will clear penalties if they try to mess with them. The 02 deal is a good move, and the city has responded well to the news, shares in Carphone, were 3.6 percent higher this morning.

In the long term this may well be a bad decision for the retailers because it weakens their position as an “independent” source of advice and mobile phones. How can a retailer give you impartial advice if they can’t recommend a particular leading network because they don’t sell it? As the retailers become more reliant on a smaller number of networks their bargaining power is reduced. Look at the Tesco example, manufactures need Tesco’s massive customer base more than Tesco need a particular brand of coffee on their shelves. This means that Tesco have the power to impose their own terms on Coffee suppliers and can squeeze down prices. But Phones4u are now incredible dependant on T-mobile, which T-mobile know and can exploit by reducing commissions and imposing tougher terms and conditions.

02 is currently the UK’s leading mobile phone network, it has more mobile phone customers than all other networks, T-mobile, Orange, 3 and Vodafone, so its will be sadly missing by Phones4u. Also 02’s recently launched tariff is stronger than ever so it’s a bigger than expected blow for Phones4u. Also 02 range of phones is extensive, it includes: Nokia E60, the Nokia N91, the Motorola V3x, the Motorola V3i, the LG Chocolate Sony Ericsson W950i. They also offer several exclusive handsets, which are well equipped with the latest technology such as 02 XDA Atom, 02 XDA Neo and 02 XDA Stealth.

I wonder who will be next to following the 02 and Vodafone example.

02 mobiles
Orange Mobile Phones

02 roaming deal is being extended

02 Mobiles recently launched roaming deal is being extended to cover a total of 31 countries. The new service is to be called My Europe Extra. This service is ideal for frequent travellers and will please many because it abolishes the charges for incoming calls, regardless of which network the call is received on.

In addition, the costs to the UK from aboard are being set at a much more reasonable flat rate of 25p a minute (a 70% discount over standard 02 mobile rates). To qualify for this cheaper price user have to subscribe to a twelve-month contract at a cost of £5 per month. However, any customer can take advantage of the service on a month-by-month basis for £10 per month. There is also an option to reduced service, which is only useable in one country, e.g. Spain. For example regular visitors to Spain can subscribe for £2.50 a month (for 12 months) or £5 for any given month. They would then pay only 25p a minute to make calls and nothing to receive calls. Seems like a good deal to us!

Originally launched in July 2006, My Europe Extra has been meet with a mixed response. Many customers do benefit from cheaper calls, but other believes the service should be a standard non-paid for service.

Sally Cowdry, Marketing Director 02 UK, said: “People want simplicity and transparency with the flexibility of using their mobile phone whilst travelling. They also want to keep costs down. Our ‘My Europe’ proposition offers customers significant savings on roaming calls within Europe and a simple pricing structure that makes it easy to work out call costs so there are no surprises when the bill arrives.”

02 is currently the leading network in the UK with over 18 million customers; with many more customers aboard so this change could potential effect a hell of a lot of people.

Orange Mobile Phones

02 Mobile Phones

02 Mobiles is the UK’s leading provider of mobile services to both businesses and end-users. Not only does 02 lead the field in voice services they also offer services including text, media messaging, games, music and video, as well as data connections via GPRS, 3G and WLAN.

02 was originally launched in the UK in 2001 after it demerged from BT. The 02 Mobile Phones company was previously called BT Cellent but is now officially called 02 PLC, which is listed on the London Stock Exchange. 02 UK is part of the wider 02 group, which is a subsidiary of Telefónica S.A. There are many successful companies with the 02 Group, these include: mobile network operators in the Czech Republic (Telefónica 02 Czech Republic) and the Isle of Man (Manx Telecom). 02 also owns 50% of Tesco Mobile and Tchibo Mobilfunk (Germany). 02 Airwave, is a secure digital communications company, which provides its services to the Police, Ambulance and Fire services.

02 mobile UK are based at the company’s HQ in Slough, and also major offices in Bury, Glasgow, Leeds, and Preston Brook. The famous 02 brand and visual identity was created by Lambie-Nairn, a design consultancy. Their idea was the position 02 as an essential service which is absolutely necessary to life like air, hence the name 02.

02 is a very successful company, it’s turnover for the y/e 31 March, 2005 was £6.7 billion. As said previously, 02 is the leading mobile phone network in the UK, as of the 31 December 2005 02 had 16 million in the UK alone. In addition, 02 have 10 million in Germany and 2 million customers in the Republic of Ireland. In total 02 have 27.4 millions customers

In UK 02 have some very strong competitors, these include: Orange, T-Mobile, 3, Vodafone, and more recently Virgin Mobile. 02 also expanded into the broadband market by purchasing the broadband company BE There, which offers 24 meg broadband.

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