review payg again

[Anonymous]

hi 

i re-join o2 as all my mum is on o2 pay monthy. as on the 26th of may the mins and text and more data sound good but there 3000mins & 4000 text sound not enought if you top up £25 go to £30. giffgaff offer unlimted text & mins 6GB for £20. maybe just review it before it too late 

[la7]

the thing is we are not taking about a £5500 car but a only a mobile phone sim card lol and the genral public want it as cheap as chips no loss to me but i can imagine the amout of people jumpin ship,

[Anonymous]

yes but if o2 want keep o2 Customer i am sure they review it again

[la7]

Trust me they won't they do not care what a few customers think, Vodafone has price changes soon on payg and the new Vodafoen priceplans will put o2 to shame with their low data allowance

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@Anonymous wrote:

yes but if o2 want keep o2 Customer i am sure they review it again

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[PhoneDoc]

There's no one size fits all approach, whether it's a car or a phone tariff.

For people who want the cheapest price possible, those plans do exist on virtual networks for them to take advantage of. They have lower overheads, hence the lowest prices.

At the same time, there are people who may not be as tech savvy, and prefer a physical shop to visit, quality phone support and a reliable brand. These services cost money, hence the higher prices. They're also in demand, otherwise there wouldn't be over 450 O2 stores, nevermind all the other networks.

Both of these may be phone tariffs, but they shouldn't be equated as exactly the same product. The same way as a Vauxhall Corsa and BMW 3 Series are both cars, that will take you from A to B, they're not exactly the same product either. There'll always be a market for both, and you're not forced to choose either, but you're not going to get a 3 series for the same price as a corsa. The same way a cake is going to cost more from Marks and Spencers than from Greggs. The same way a seat for the same route is going to cost more on British Airways than Ryanair.

[Beenherebefore]

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@PhoneDoc wrote:

For people who want the cheapest price possible, those plans do exist on virtual networks for them to take advantage of. They have lower overheads, hence the lowest prices.

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But it's the main networks that allow those virtual networks to charge those low rates by selling them network capacity "cheap as chips"........so why not increase the charge to virtual networks and reduce your rates to your direct customers ? 

[MI5]

If you're not happy with what's been offered just move networks. It is payg we are talking about so no tie ins.

[PhoneDoc]

@Beenherebefore that assumes that phone networks are a lot worse off because of virtual networks, which I don't think is the case. For every customer a virtual network gets, the host network still gets paid more and more. They may receive less revenue per customer than through their own sales channels, but at the same time, all they're providing is the infrastructure for these people (rather than expensive things like stores and customer services etc). People are still using and indirectly paying for O2's network, but other than ensuring they remain connected, O2 (or other networks) have no responsibility towards these customers. It's a win-win situation.

If networks were to increase the charges to virtual networks, and simulataneously lower their own charges, virtual networks would be too uncompetitive to remain in business - they'd essentially be shutting down a host of different companies. There'd also be a shortfall of money, with fewer virtual networks, and tariffs below market value, who's going to pay to keep the host network up and running?

That being said,  many people prefer the quality and dependability that comes with direct sales. They like a physical shop to visit, good quality customer services and a well integrated ecosystem. That costs more money, hence the higher prices.

It's also worth pointing out, that as virtual networks grow and become more unwieldy, their overhead inevitably increases, and their prices can become increasingly uncompetitive relative to other virtual networks. They're not too much of a threat in that regard.

All in all, there's choices for everyone out there, and everyone has different needs. As I was saying though, you can't have your cake and eat it - pay virtual network fees and demand host network-quality support and services.

[Beenherebefore]

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@PhoneDoc wrote:

@Beenherebefore that assumes that phone networks are a lot worse off because of virtual networks, which I don't think is the case.

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Correct.....the VNs have more buying power than a direct customer which is the only reason direct rates are higher.

The balancing of revenues between high volume/low value VN business and low volume/high value direct business is the key.

Now who do you think contributes the most to network infrastructure improvements ?

P.S.  your theories seem to be taken directly from a dissertation 

[PhoneDoc]

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Beenherebefore wrote: 

Now who do you think contributes the most to network infrastructure improvements ?

P.S.  your theories seem to be taken directly from a dissertation 

Hahaha I'm glad these educated guesses seem to be reasonably valid in that case!

I preferred to use analogies in case members didn't get the terminology, but that's exactly right. Networks rely on high value / low volume sales, and as a result can offer a better quality of service, which many people are happy to pay for. MVNOs and resellers operate on a low value / high volume basis, it works because their overheads are a lot less - but in general, service may not be the same quality and it can be more cumbersome to resolve issues, as you may not be a customer of the host network.

Now that's a good question. I think there's just too many different sources of revenue to even hazard an educated guess without knowing exactly how many customers each sales channel has and the phone network's net profit for each of them. Direct customers likely bring in more gross profit, but between stores and customer services and other support teams, they cost a lot more to manage. And this is just for consumers. Who knows the revenue and costs involved for the millions of small, medium and national businesses that have contracts with the major networks, and to what extend they contribute to the infrastructure.

It all comes back to my original point, you have to compare like with like, mobile network with mobile network. Fully fledged networks are never going to be as cheap as virtual networks, or as cheap as resellers. They're different businesses with different costs and different levels of service. At least there's something out there for everyone though!