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back to article O2 offers incentives to end phone upgrade insanity

UK mobile phone network O2 is to pay customers not to upgrade their handsets - a move that turns the usual approach to phone sales on its head - all in the name of going green. O2 said today it will give customers £95 call credit and donate £10 to the Energy Saving Trust (EST) charity if they agree to keep their current handset …

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Vodafone offer a rebate

Last week Vodafone offer to pay £100 back into my bank account if I didn't upgrade. I'll probably still replace my phone coz I think it's S**T, but if I wasn't so pissed off with the phone I'd probably go for it.

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How much?

The last 'free' upgrade I got from O2 I sold for £150 on eBay.

But as nothing is really free I saw it as just recouping what O2 was going to overcharge me in the 12 months that the contract was going to run for!

£100? I guess I will have the upgrade if it is worth more.

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JP

Give me a phone...

Which lasts 3 years, and I'll think about keeping it for that long. Seeing as battery (or, when I'm careless when travelling, charger) replacements seem to cost about half the price of a new phone, I'd rather take the upgrade!

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Anonymous Coward

Finally, a sensible idea from O2

It is nice to see O2 are making some reasonable offers to customers who would like to cut back on the Carbon Emissions.

I know the manufacturers won't be best pleased but maybe they will stop bringing phones out nearly every week it seems! This way it will make the manufacturers think about every phone release before just chucking them out like on a conveyor belt system!

At least O2 are providing the option and not forcing it.

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Silver badge

Good on 'em!

I have to say, I'm quite impressed by the move, considering how much phone retailers normally push the "upgrade, your phone is no longer fashionable" philosophy.

I buy PDA-phones, and I keep them for a long time. I'm up for renewal, and I was thinking of going with O2. £95 credit for doing what I do anyway sounds pretty good to me, and if it encourages others to hold onto a handset that is probably quite adequate for their needs, then well done O2. Let's hope other retailers follow suit. Who knows - we might even make a dent in the fashion-obsessed phone trend.

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nice try

Nice idea, now all we need are some handsets that actually last more than a year...

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Half-life of mobile phones

This is all well and good. Admirable in fact. Someone is actually trying something. There is one flaw however, and it's not O2s fault - the half-life of your avaerage phone isn't much more than about 18 months.

One can only hope that O2s idea has some sort of 'get out' clause that allows you to change your phone if it dies completely through no fault of your own (in a bucket of water, down the toilet, etc.)

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Interesting, but not news.

At least one other network has been offering a similar incentive, but not trumpeting it in the same way:

When I called to renew my T-Mobile contract last month and to haggle over a new handset, the agent made an interesting suggestion that hadn't occurred to me: how about I keep my current handset and pay less for my monthly package? The cheapest contract they offer is Flext 20 at £15 a month, recently dropped from £20. The T-Mobile staffer said I could pay just £8 a month for this, if I didn't want a new phone.

Over the 18 month contract period that's a saving of £216 on the original price of £20 a month, and a £126 saving on the reduced price of £15 per month. True, I don't get it up-front, but this way I'm less susceptible to the kind of impulse purchasing that occurs when I have £100 burning a hole in my pocket!

NB - I don't work for T-Mobile; just a long-time satisfied customer.

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Yep

My missus got a call about this on Saturday, they've just given her £100 to keep her Nokia N91 (which she loves for it's 4G MP3 disk) so she's happy.

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Old idea rehashed

It's a bit cheeky; I told O2 i was quite happy with my Nokia 6260 (don't laugh) when my contract initially expired 18 months ago. I renegotiated the contract, told them i didn't want an upgrade then, and landed myself with a nice £100 credit then.

It seems to be an old idea, paraded around with new bells and whistles in today's push for greener lifestyle.

It's a start, it will please a lot of environmentalists, and the consumer should have a better deal in the long run. Hell, for a low user, the £100 will pay for half the new contract term :)

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Anonymous Coward

Would be nice if manufacturers did the same...

The mobile phone manufacturers have been doing various dirty tricks that encourage upgrading.

Poor build quality is one, making a phone unlikely to last much longer than 18 months.

Firmware cons is another. Often a phone is released with buggy firmware or just plain stupid functionality. Some of this never gets fixed in a firmware upgrade: you'd have to purchase a new model with almost identical features with the old problems fixed and new ones added.

For example I've got an older phone which runs Windows mobile 2003 and is buggy as hell. There is a model with almost identical specs which runs WM 5 and there are new similar models that run WM6.

There is no firmware update to WM5 or WM6 for the older models and never will be even though the hardware is quite capable of supporting it.

This has almost become the accepted way of doing things: imagine the uproar if the same happened with PCs.

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I wonder if....

Will they be checking the IMEI, or just whether you buy an upgrade deal through them?

If they don't check if your IMEI changes, there's nothing stopping you buying a new cheapo phone every time they die... I imagine 95 pounds would cover an el-cheapo Nokia quite nicely and still have change left over. And you only need to do that *if* the phone dies.

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Economics

In countries like the UK where the MNO (Mobile Network Operator) subsidises the cost of your phone, they need to make back notonly the running costs of the network and your number and services, but also recoup the cost of your mobile phone (which you've probably got for free).

The actual cost of your "free phone" that the MNO pays out to the Manufacturer can be anywhere between £50 and £400+, depending on the handset, even excluding VAT and taking into account bulk unit ordering discounts (a single MNO in the UK may order anything up to 40,000 units of a single model of handset in one go to meet future anticipated demand). That average handset cost to the MNO is around £250-£300 and is increasing as time goes on due to the ever-increasing technical complexity (and therefore R&D and manufacturing costs) of mobile phones.

The more an MNO can persuade it's customers to keep their phones for longer via cashback, credits to your account or extended term contracts, the more money it saves.

In some countries I believe that it is illegal for the MNOs to subsidise the cost of the handset. You pay the full-on handset only cost of the phone as if you'd bought it directly from the manufacturer, but you then pay a lot less over the duration of your contract as the price of your monthly tariff is not covering the cost of your phone.

Personally, I'm still using my Sony Ericsson P910i that I've had for two-and-a-half years; the battery life isn't quite as good (I need to charhe it every 2 or 3 days now). Apart from that it works perfectly, despite me having dropped it down two flights of stairs and under a bus since I got it.

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