Is This the End of Prepay (General Comments...)

Member Name: tonybone

Product:	General Comments...
Date:	01/03/02 (120 review reads)
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Firstly I could not find an area for this topic so put it in general.

After reading a couple of opinions on here as to the current announced price rises I thought I would try and explain exactly why this is happening.

I have been involved in Mobile Telecommunications on for many years and can remember when handsets where £400 at least I can also remember when P.A.Y.T came out and the cheapest handset was around £150 and the calls 50p per minute.

There has been lots of press recently about Vodafone’s price rises expected to be around 40% this is happening for a number of reasons.

I feel the main reason for this is the export of their phones at the minute why you may ask I will explain.

At the minute Vodafone subsidises their equipment quite heavily, as do the other networks this is so they can attract new customers quickly. This has worked well over the last couple of years and now nearly every one has a mobile. But now they have a problem and that is exporters they have realised that they can by a handset here and export it abroad and resale it for a large profit. This in effect means that Vodafone is subsidising the growth of networks in countries such as Ghana, Nigeria and Egypt. You will also find many handsets been sold in places like Hong Kong where people will pay more and there networks have not been subsidising.

The networks tried to remove this problem by locking their phones to their network but his only worked in the short term and the software to unlock the phone quickly became available. This then caused another industry to set up the phone unlockers who now make a tidy profit writing and selling software to unlock the phones.

I believe that because of the cost of these handsets never been used on our Networks plus the cost of putting software to lock them on them Vodafone + One 2 One (up to Now). Have decided to up the price of their handsets so there is no longer any profit in
exporting.

My second reason for the price increase is the customers who never use their phone these people buy their phone and make about £5 per calls a year. These are the customers the networks are also fed up of (even thought they would not admit it openly) they cost the networks money as they buy subsidised handsets then never give the network any profit. Also they will probably swap their handset after a couple of years so the network is paying again.

I believe that you will find all the networks will higher handset prices on Pay as you talk also calls my also rise. I have heard that One 2 One are going to pass their Pay As You Talk business to Virgin to get rid of the problem all together.
You see also the networks now have what they want a massive customer base who all use mobile and as you know it’s very hard to go without one once you have had one so they will be hopping to push people to contract. This will then give them a regular income (your monthly line rental).

I think over the coming months sim free handsets will become much more popular due to them not been locked to a network. Also by buying simfree you have a much wider choice of handsets.

I hope this helps people to understand why the price rises are happening.

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