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Quick question: will Vodafone price match to keep a customer?
I'm due an upgrade end of March and out of contract in July. I fancy a BB Z10 and phones4u are offering it free, with 600 minutes, unlimited texts and 2GB interweb for £33 a month as a web exclusive offer.
I'm no rocket surgeon but if a third party supplier can offer a BB Z10 on Vodafone at almost a tenner a month less than Vodafone's own price by "eating into their margin" then either the margins are too great, Vodafone are profiteering or the guff about the cost of maintaining infrastructure etc is just guff.
phones4u can provide the phone, on the network that is paid for and maintained by Vodafone, at less than Vodafone wish to provide the handset for, because Vodafone can sell the service to PFU at such a discounted rate AND still make a profit..
Reckon I'll be requesting a PAC...
You don't need to be a rocket surgeon (a mixture of a brain surgeon and a rocket scientist?) to understand the economics of running a chain of shops and of building and maintaiing a massive capital intensive nationwide mobile phone network. I've explained several times on the forum about the concept of ARPU and why networks do not price match dealers.
I'm well aware of the principles of ARPU.
Separate the mobile network from the retail network.
Your retail competitors have the same costs as you on the high streets.
You sell airtime and contracts to your competitors based on the cost to you of your network and a profit margin.
I'm sorry, but to use ARPU as an excuse for higher prices is bogus. Quite frankly, you ought to be able to offer better prices direct to customers than your competitors can.
Analogy time. My friend runs a pub. It is tied to a brewery. The brewery charges him rent. He pays £85 for a barrel of the brewery's beer. The brewery sells the same beer to his competitor, one mile up the road, for £60 a barrel. He then loses customers to his competitor who is selling the same beer at 30p a pint less.
Does that sound like good business practise?
First of all please stop 'you' and 'yours' in relation to the network as I am nothing to do with Vodafone but I'm a customer just like you - as my signature makes clear.
Secondly, your analogy is accurate up to a point. But there are lots of examples of dealers being able to undercut the direct selling operation of the service provider itself. I'll give you two such examples - cruise holiday companies sell cruises direct to the public but travel agents will almost always undercut them in price. How? for the same reason that P4U and CPW can undercut Vodafone - the subsidise the price out of their commission. Another example is in the printing industry where print brokers nearly always undercut the direct sales force.
Another factor to be borne in mind is that phone dealers don't source the handsets from the same sources as the networks. We have seen multiple instances on the forum of customers who have ended up with Samsung Galaxy S3's and Notes that are not UK models but have been sourced in Eastern Europe. There is nothing wrong with the handsets as such but they were not meant to be sold in the domestic market and presumably were cheaper to buy.
I've always been happy with Vodafone, their coverage is as good as anyone's where I live.
I was on a bit of a wind up but I shall be shopping around when the time comes.