iPhone Attracting Switchers to O2 Network

[MacRumors]

TimesOnline.co.uk reports on the apparent success of the iPhone launch in the U.K.

The iPhone reportedly sold "tens of thousands" of units on opening weekend. According to the article, two thirds of Apple iPhone customers were switching from a rival network to O2. With a saturated mobile phone market in the U.K., this sort of subscriber switching could be a big win for the iPhone carrier, though it reportedly came at a price:

The desperation of the main networks — Vodafone, Orange, T-Mobile and O2 — to gain an edge over each other triggered a fierce battle for the rights to market the iPhone. The losing players maintain that the O2 deal is not economic. The Spanish-owned group is thought to have agreed to an ongoing share of revenues with the Californian giant of up to 30 per cent.

Article Link

 

[samh004]

I guess time and eventual revenue reports will tell if it was a good deal or not.

 

[jmmo20]

Telefonica O2 can afford it.. they have an immense profit in its main market, Spain, by ripping customers off.

They're also in South America where they can do whatever they well damn want.

It's very curious seeing how this company in a foreign market behaves differently. I lived in the UK for many years and although O2 is not the best network, it's not the worst either. And they have good deals (not the best either, but you should see the tariffs of Telefonica Movistar in Spain).

 

[bartelby]

Telefonica O2 can afford it.. they have an immense profit in its main market, Spain, by ripping customers off.

They have a lot of motorsport sponsorships to pay for😀

 

[BufferOverflow]

How is the deal at all not economic? So you give away 30% of revenue from these new customers, that's still 70% of profits from switchers which is a damn sight larger than 100% of nothing.

Also consider their existing customers like me. I was paying £20 a month over 12 months and had a free W880i from them. They were only making a little over the cost of the phone from me. Now I'm on £35 for 18 months and they haven't subsidised a thing.

Sounds like O2 are laughing

 

[OllyW]

How is the deal at all not economic? So you give away 30% of revenue from these new customers, that's still 70% of profits from switchers which is a damn sight larger than 100% of nothing.

Also consider their existing customers like me. I was paying £20 a month over 12 months and had a free W880i from them. They were only making a little over the cost of the phone from me. Now I'm on £35 for 18 months and they haven't subsidised a thing.

Sounds like O2 are laughing

Remember, revenue and profits aren't the same thing.

 

[LeviG]

of course o2 are going to say that they've sold '10's of thousands' of iPhones, they can't exactly go out saying they had a poor showing but the question is how many have or are going onto the o2 network 🙄

Now clearly its not as good as they were expecting otherwise they would be shouting out the numbers already - and the question is how long will this sales 'boom' last, the uk has been hearing about this phone for 11 months so most people can buy in the first few days of release as they've had plenty of time to save.

I'll be sticking with vodafone but the iphone makes a very good bargaining tool 🙂

 

[SteveJA]

Switcher

As one of those switchers to O2 I consider myself a good catch for them. 11 years ago I joined Mercury One to One. Which then became One to One. Which then became T Mobile. So I'm pretty loyal.

You should have heard the T Mobile customer service operators beg me to stay. At one point they offered me my current deal for just £5 a month. I said why haven't you ever offered me that 5 years ago for 6 years loyal service!

I haven't regretted the switch for one moment. I love my iPhone and I can live with O2.

This post was written on my iPhone... Not that I'm addicted or anything!

 

[0098386]

I'm getting sick of Vodaphone now and Virgin haven't changed much since I joined them (2001 I believe), except the times they give out free/super cheap txt periods.

I'd really love to hop onto o2 right now.

 

[robpow]

You should have heard the T Mobile customer service operators beg me to stay.

I had the opposite with Orange, they asked no questions and just said the PAC code will posted in a couple of days. I was expecting a battle with the phone rep, retentions, supervisors etc but the call was over in half a minute!

Matt

 

[Spanky Deluxe]

How is the deal at all not economic? So you give away 30% of revenue from these new customers, that's still 70% of profits from switchers which is a damn sight larger than 100% of nothing.

Also consider their existing customers like me. I was paying £20 a month over 12 months and had a free W880i from them. They were only making a little over the cost of the phone from me. Now I'm on £35 for 18 months and they haven't subsidised a thing.

Sounds like O2 are laughing

You hit the nail on the head. O2 is laughing all the way to the bank right now.

I'm getting sick of Vodaphone now and Virgin haven't changed much since I joined them (2001 I believe), except the times they give out free/super cheap txt periods.

I'd really love to hop onto o2 right now.

You want an iPhone. You *need* an iPhone. Its calling you. 😉

 

[Cloudane]

I'd switch to O2 just for EDGE, which is being rolled out pretty quickly, because I'm sick and tired of waiting for decent 3G coverage.

This is a complete reversal of my previous thoughts towards them, which was that I'd never switch to O2 because they're the slowest at rolling out their 3G network!

I've just basically given up on 3G now.

This is a great thing for O2... having the biggest market share is extremely important to the mobile networks (they're similar to the supermarkets in that way). What remains to be seen is whether people *stick* with O2 after their contracts are up, or if they unlock and go elsewhere.

 

[Spanky Deluxe]

I'd switch to O2 just for EDGE, which is being rolled out pretty quickly, because I'm sick and tired of waiting for decent 3G coverage.

This is a complete reversal of my previous thoughts towards them, which was that I'd never switch to O2 because they're the slowest at rolling out their 3G network!

I've just basically given up on 3G now.

This is a great thing for O2... having the biggest market share is extremely important to the mobile networks (they're similar to the supermarkets in that way). What remains to be seen is whether people *stick* with O2 after their contracts are up, or if they unlock and go elsewhere.

I've been really pleasantly surprised with Edge. Its a lot faster than I was led to believe by disgruntled 'yanks'. Yesterday I really wanted to listen to a particular song but I'd forgotten to add that album to my iPhone. I was walking around town and really wanted to listen to it. It wasn't a problem though because I found it on YouTube and streamed it over Edge. 🙂

GPRS is horrendously slow though but that was always a given. Browsing on my iPhone is significantly faster than it was on my Nokia N80, which was 3G.

I've been an O2 customer for about 9 years now, since the days when it was still BT and I've never been disappointed with the level of service. In the mean time I've run concurrent phones on two occasions, once with Three (which was a complete and utter waste of money - terrible call quality and coverage (although this was in 2003)) and once with Vodafone through Singlepoint. It took me years to even cancel that one, they refused to stop billing me loooong after my contract expired.

I think the plan is that most people with an iPhone will want to stay with an iPhone and so will stay with O2 for at least as long as its exclusive to them (5 years I think). Personally, I'm also used to getting a new phone every year (have fought to stay on a 12 month contract until now). I'm pretty sure the deal will be the same over here with O2 as it is with AT&T, if you buy a new iPhone its not a problem but you start a new 18 month contract. You don't get 18 months added on to what you have left, it just starts a new 18 months. So we're free to get as many generations of iPhones as we want but we'll always be locked to O2.
I never had any plans to move away from O2 and right now I don't have any plans to go back to Nokia so that's fine by me.

 

[Cloudane]

I've been really pleasantly surprised with Edge. Its a lot faster than I was led to believe by disgruntled 'yanks'. Yesterday I really wanted to listen to a particular song but I'd forgotten to add that album to my iPhone. I was walking around town and really wanted to listen to it. It wasn't a problem though because I found it on YouTube and streamed it over Edge. 🙂

Same here, I've seen it in action on my dad's iPhone and it's a very reasonable speed. The built in (Google?) Maps app is blazing. I don't know what people are complaining about, and I've seen plenty of rants about EDGE too. In fact whenever I try to load any kind of reasonable size page on 3G (Three network) it's slow, I'd say easily slower than what I saw of EDGE. Maybe it's just that 3's network is crap (wouldn't surprise me).

The main application for which 3G has a decent edge (arf) is for video. I've had a Three mobile for as many years, and the only time I've ever messed around with video downloads has been when I've been bored sitting through a football debate in the pub, or waiting for a bus or something... always a noisy environment, never usable. The rest of the time I'm sat in front of a PC. That said, if EDGE can even stream Youtube, then that's quite impressive and even less of a selling point for 3G.

 

[0098386]

I wouldn't complain abuot the speed. I'm on a 512kbps connection shared between 2 active computers and 1 semi-active Xbox 360. It becomes a nightmare when everyone gets home from school and work. Course if I was used to blazing fast internet it might be different, but then I'd just see that I was browsing the internet and sending emails from the moors and all would be fine.

(which would be an excellent place. The signal up there is as strong as anything! probably get near the peak EDGE speed).

 

[bmarker]

Note for the Americans. Mobile plans work differently in the UK than they do in America. Calls between networks cost a lot more. In the US I never worried about what network somebody was on when I called them. When I was working in the UK I picked O2 because most of my co-workers had O2.

Getting even more people on O2 with the iPhone will attract people to O2 even if they don't want an iPhone.

 

[MacsAttack]

of course o2 are going to say that they've sold '10's of thousands' of iPhones, they can't exactly go out saying they had a poor showing but the question is how many have or are going onto the o2 network 🙄

Now clearly its not as good as they were expecting otherwise they would be shouting out the numbers already - and the question is how long will this sales 'boom' last, the uk has been hearing about this phone for 11 months so most people can buy in the first few days of release as they've had plenty of time to save.

I'll be sticking with vodafone but the iphone makes a very good bargaining tool 🙂

An interesting point that was made elsewhere was that in raw numbers the sales are not as high as in the US, but as a percentage of population in UK and Germany it was looking much higher. I also think the timing is wrong - in the UK at least. With Christmas just around the corner people are not going to run out and buy what they hope they are going to find under the tree on December 25th. Come January - that will be the time to decide just how big a success the iPhone has been in Europe.

Also - unlike the US - this was not the chance to be the first to get the iPhone. Some of the sparkle has worn off, and those who really-really-really wanted it got an unlocked one from the US anyway. I'll bet a big percentage of the 144,000-odd unlocked iPhones we were hearing about went outside the US.

Now - if you'll all excuse me... I'm just off to buy an iPhone 😉

 

[LeviG]

An interesting point that was made elsewhere was that in raw numbers the sales are not as high as in the US, but as a percentage of population in UK and Germany it was looking much higher. I also think the timing is wrong - in the UK at least.

Don't forget though the UK has a higher number of mobile phone per head (iirc its more than 1 per person) to start with, alot of people have more than one phone too. I still stand by my view that its priced wrongly (phone but mainly tariffs) and the question of what happens after 18months (ie unlocked etc) still makes me think that the UK maybe a little more wise with their money to start with - plus all the true early adopters got imported ones.

 

[mac.edd]

Has anybody considered waiting till the iphone is released in France? I seem to remember that there is a French law preventing a phone from being tied to one operator, is this correct or has managed to wrangle out of this? Orange France has stated that the iphone will be launched on the 29th so could also hop on a ferry or train and pick an iphone from France and bring it back to the uk and thereby have it 'officially' unlocked. Just an idea😀