Why does the same product cost so much less from mobiles.co.uk

[Dubz]

Hi,

I'm due a phone upgrade and i'm looking at the iPhone 8. I checked the options on the O2 site and the best offer was about £37 per month over 36 months, total cost £1332. I can reduce the term to 24 months and pay £150 up front and it comes down to £39 per month, total cost £1086.

From mobiles.co.uk I can get the same phone and contract with O2 for £150 up front and £24 per month over 24 months, total cost £726.

I can't really fathom how the exact same product costs £360 more when i buy it through O2. I called customer services to see if they could do a better deal but they can't, the guy just told me about how O2 have the overheads of network and customer service etc etc. But i'm buying a contract from O2 so it's using their network and their customer services right??! 

Basically it seems i'm paying extra for the luxury of a refresh contract which yields me no apparent benefit since i don't regularly upgrade my phone or make changes to my contract. Is that right? The deal from mobiles.co.uk just seems to good to be true given how expensive O2 is?!

Cheers

Dave 

[MI5]

All the above is true, plus, O2 will pay a commission to third parties that sell a contract, so mobiles.co.uk will use some of that commission to reduce the cost to you and entice you in.

[Dubz]

So O2 will pay a third party a commission to sell a contract to me despite the fact that i'm an existing customer with an existing contract? They won't offer me the same contract themselves but will subsidise a third party to undercut their own prices? Nothing about this makes any sense to me.

[MI5]

You're not factoring in the thousands of contracts that these 3rd parties sell every month though......

[Dubz]

But surely it would make sense to offer better rates to existing customers who are being 'tempted away'. I would have paid more for the convenience of not having to mess about with a 3rd party but not to the tune of £360

[Dubz]

I'm going to end up buying the deal from mobiles.co.uk, so i will get the contract for a good price and O2 will pay a commission to them for selling something they could easily have matched themselves?!

I DON'T GET IT! If it's viable to pay 3rd parties to sign people up to cheap contracts why is it not viable to sign them up yourself?!

[TallTrees]

Hello @Dubz 

I always consider these to be business "anomalies" the unexplained.

I never bother to understand them ~ there are mountains of these "out there"

Do the best for yourself, get the best deal bearing in mind coverage and all

that.

Best of luck and kind regards TallTrees 

[Bambino]

@Dubz  If you're not interested in Refresh, or any of the other 'perks' that O2 offer by buying directly, then buying through a third party is the way to go.

[MI5]

If you are eligible for discounts you can get up to 50% off with Family Plan so could work out cheaper that way, but if not, just go for the cheapest deal.

[pgn]

And if you're working in the right sector, don't forget O2 Open, @MI5.

But even with that, the 3rd party contract can work out to be the better deal 😉