3 paying customers to take the service!

[3GScottishUser]

Yes indeed.....they have shifted the focus from ThreePay (which I suspect has not been fertile ground for them due to unlocking, general dissatisfaction and competition from Fresh, EasyMobile and 02) to contracts.

The woeful Motorola c975 can now be bought on Talk & Text 600 for £60 for a year on a 12 month contract! www.e2save.com offer the brick with cashback making the line rental free for 10 months, making thee total cost just £60 (2 x £30/month). There are other deals around like 12 months 1/2 price and free cheap cosnsumer products but the 10 month free line rental deal from the e2save (a CPW company) site seems the keenest.

The c975 looks tempting but in realality its a shrunken version of the a-835 without bluetooth or irda. It feels heavy, dated and has a battery hunger that barely allows it to function for a day. It feels cheap and nasty and in your pocket looks and feels like 2 Nokia 3310's sellotaped together!

3 UK appear to be trying hard to work with what they have available to sell. Its unlikely 3 will make many friends with this device and look set to loose lots with just £60 guaranteed in the kitty for a full 12 months service, calls, texts - oh and there is the not so small matter of the dealer commission and the handset cost.

I wonder how 3 UK can justify deals like the above? Is it a better proposition than offering it on ThreePay? They used to get £50 for it as a Threepay handset but there was no guarantee that any top-up's would be purchaced and it could be bought and box split or used as an unofficial upgarde.... loss potential about £120/deal. (£150 handset cost - £50 paid by customer + £30 dealer margin). On contract re the above (£150 handset cost, £100 dealer commission - £60 paid by customer) potential loss = £190/deal over 12 months. I suppose the logic is that contacts have a value as some customers will remain after the minimum period ends and contracts can be bartered and sold. So it looks like 3 are now looking to build a larger contract base and are prepared to gamble that a substantial number of the 'bargain hunters' prepared to put up with less fashionable kit will remain and deliver a better return than those previously attracted on ThreePay.

Interesting...... we shall see how this strategy works. My own opinion is that when something costs so little and feels so dated it's easy to discard, same sort of situation 3 had with the cheap deals they offered ThreePay customers with less than reliable NEC products.

PS: Your girlfriend might ask (if your phone is in your front pocket) 'Is that a Motorola c975 in your pocket or are you just happy to see me?'

[Ben]

Mhmm... of course, it's the retailer paying customers to take the service, not Three directly, but with the end user paying just £60 for a phone and a years line rental + inclusive minutes and texts it's hard to see where the money's coming from.

For a year of supercheap mobile telephony, even on other networks, e2save seems to be the way to go.

[3GScottishUser]

Indeed, the cost of the handset, customer support, advertising/marketing and dealer commission would more than wipe out £60.

Some folks will be tempted by the price but overall is this a strategy that will make any sense in the longer term for a company that is dependent on interest and sales of additional services?

Are £60/year customers likely to be fertile candidates for income?

What do you think?

[Ben]

What I don't understand is how e2save can afford to give that much cashback. I assume that it's heavily weighted on statistical analysis of how much cashback will actually be claimed. I'd imagine that all independent retailers get similar levels of commission, whether it's e2save or P4U, so surely that'd mean Three are paying oodles of commission whether the stores give it as cashback or not? Yet people strongly deny that Three gives any more commission to dealers than the other networks?

These cashback deals must be practically scams to work... it's too late in the day for Three to be driving acquisition that hard, e2save in particular must be doing some very careful maths to make all this balance out.

[chaslam]

I have recently brought a C975 as sort of a back up phone. I have to say I am more impressed than I was expecting. Truth be told though I wouldnt buy it on contact. But then again paying only £60 for the year, you could buy a much better phoen to replace it, like a E1000 or A1000.

[3GScottishUser]

"I assume that it's heavily weighted on statistical analysis of how much cashback will actually be claimed."

Never!!!!

CPW don't take chances. They will be paid for every single connection and the cashback will be calculated on 100% take-up. Anything less would be suicide!!

Multiples like CPW (which e2save are a subsidury of) account for the vast majority of connections and they can demand very favourable terms when offering to promote deals. It can often be more cost effective for a network to subsidise deals like the above rather than spend cash on costly national advertising. This appears to be what 3 is doing presently.