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Monday, December 18, 2006

An online shopping trip

The James Bond Sony Ericsson 3G K800i is a hot phone this Christmas and is available for £245/ SIM free from Expansys. Expansys is one of the cheapest online sellers of SIM free handsets.

Of course, every operator will give you the phone for “free” if bundled with a contract. I’d thought I’d examine various websites to look at the levels of commitments required and where the biggest bargain can be found.


It is interesting that currently the cheapest way to acquire the handset is through Carphone Warehouse (CPW) on a Virgin Mobile £30/month tariff (200mins talk and 300 texts). CPW offer a £15/month cashback deal bringing the net cost to £15/month. This is far cheaper than Virgin Mobile is themselves offering.

On O2, a CPW cashback deal is cheaper than buying through o2 website. However, O2 do have the exclusive Silver K800i as featured in the film rather than the black model usually offered. It is also noticeable that the cheapest O2 package offers a different bundle than the CPW offer. Interestingly, buying through O2 allows the purchaser lots more options in terms of add-ons, although none of them are 3G related.

On Orange buying direct rather than through CPW definitely has an advantage. First of all it is far cheaper and includes options like a Magic Number which allows unlimited calls to a specific Orange Mobile number. Orange also offers a 3G option which is MobileTV.

T-Mobile also beats CPW on price. They also include a real 3G option – Web ‘n’ Walk – which is unlimited internet access for £7.50/month. I think it is a real value for money 3G option which leverages the network and the functionality. It makes zero sense to me selling an advanced 3G handset and only using it for voice, text and posing functionality.

3UK is very interesting because it is the only operator who activity encourage people to use 3G services with 25 mins of video calling and 5 free downloads included in their standard bundle. It is noticeable that they promote this on their own website but CPW don’t bother mentioning it. In fact, 3UK is so much cheaper on their own site, it beggars the question whether CPW is actually selling any 3UK contracts. I know for a fact that CPW has been uneconomic since Easter and doesn’t sell the latest and greatest 3UK offer, the X-Series. Although, Vodafone received the media attention when they withdrew from CPW, 3UK effectively withdrew much, much earlier.

Vodafone is not available through CPW and as my cyberbuddy, Martin Geddes of Telco 2.0 has pointed out, it is not simple to plough through the options offered by Vodafone. Mind you, courses are available to help you through the various options. Flippancy aside there is a serious point behind the Vodafone options and that is people do want choice: some want the cheapest price, some want more or basic services and some want advanced 3G services. In fact, one of the reasons given behind the Voda decision to terminate CPW is that CPW were not prepared to change their systems to offer the full range of Voda options.

This to me is the greatest challenge that CPW faces – the way they present sales. Any glance at their website indicates to me that their strategy is to sell to the “bargain hunter”. Admittedly, these bargain hunters make up a substantial proportional of the mobile community, but I suspect that they are less profitable to the networks than even the casual prepaid user. As the mobile market evolves CPW runs the risk of pricing the bargain hunters out of the market for anyone else but the lunatic fringe. There is no way that Virgin Mobile has the lowest unit costs on the market and anybody has to question how they can appear to be the cheapest in the contract market. Either they know something that no other operator understands or the new owners are pursuing growth at any cost.

In fact, the biggest challenge facing all the online properties is that the web is not the cheapest place for contracts. The dirtiest not-so-secret tip in the cellular industry is that the cheapest way to get a handset with a bundle is to ring your existing network and threaten to churn unless they match the best price in the market. Obviously, having decided on your handset and knowing the cheapest online price improves your negotiating position.

Mind you “Busillis, Tele Busillis” doesn’t quite have the same ring to it as “Bond, James Bond” and I prefer Vino Collapso to Vodka Martini’s. So I guess I’ll have to stick with my W810i for the time being…