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Poor treatment of exisiting customers...

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#1
Twisticles

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I just got off the phone with T-Mob.

I posted on here (or modaco) before about my experiences when the Vario II was first released - I phoned up as a 'new' customer for the Vario II on Flext35 WnW and was quoted ?40 for the handset.

I've been with T-Mob since the One2One days, spending around ?60-?80 a month. I've been out of committment for 8 months now, waiting for the Vario II. So when I called to upgrade my price plan to Flext35 Wnw, with a Vario II they quoted me...?240!

Hang on, new customer, ?40 - old customer, spends lots of money, ?240? How does that work. I was mighty miffed.

Since then, due T-Mobiles bizarre customer retention practices, I have decided to move to an O2 business plan, and get the phone of my dreams inluded in a deal from expansys.

So I phoned T-Mob to get my PAC code today...transferred to the 'loyalty' team. Now suddenly they can do a deal for me. "Customer Services aren't able to give bigger discounts to upgrades, you should have transferred to us" they said. "How do I know to ask to transfer to you to get a better deal" I asked. "Well, they will transfer you to us when you ask for a PAC code, or ask to cancel your contract".

"So you only offer discounts to people who threaten to leave?" I asked in disbelief.
"Customer services are unable to offer the discounts we are, you should have asked to talk to us" they repeated.
"And I only get to talk to you if I threaten to leave or cancel?" and the conversation would have gone round in circles ad infinitum.


Anyway, so we get to the deal. (I've already bought my alternative and signed a contract with O2, so even if he offers to give me the phone I'm not staying with T-Mob.)
"I can give you the Vario II on Flext35 WnW for ?90, that is a discount of ?150 off the price you were quoted by customer services".
"Erm, but that is still ?50 more than a new customer"
"Its a great deal, that saves you another ?150"
"Except, if I was a new customer, I'd only be paying ?40 for it"
"But you're an existing customer upgrading, that's why is costs more"

WHAT!?! Why the hell should loyalty be rewarded with higher prices? The guy just didnt want to give me a PAC. He STILL wanted me to pay more than a new customer.

All I can say is, to those enjoying their new Vario II and 18 month Flext contracts...get ready to port your PACs out, coz you ain't going to get a deal from T-Mob when the Vario 4 is available to upgrade...

I just can't get my head around why an upgrade is more expensive than a new contract. Does this make ANY sense to anyone?

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#2
pd.ryder

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Ouch! That smarts!!!
It's the first 'bad thing' I've heard about T-Mob tho'...

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#3
Twisticles

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Ouch! That smarts!!!
It's the first 'bad thing' I've heard about T-Mob tho'...


I think in around 16 months we might be hearing a lot of similar stories, unless TM changes its business practices... :)

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#4
Samsonite

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FWIW, the whole landscape of the mobile revenue streams are likely to change in the not too distant future ..

not that i have ANY inside information but many of the tech sites, The Reg etc, have run articles about how unsustainable the current situation is.

Huge commissions being paid per connection is not smart business sense and it is only as matter of time before the whole house of cards comes crashing down around our ears!! We're doomed, ALL DOOOMMED!!! *cough, ahem* sorry.. got a bit caught up there..

I actually think that the writing was on the wall with 18 month contracts and the latest nail is in the form of Vodafone going solus with Phones 4U.. now they can squeeze the margins available on their connections and take more control of the money being dished out in subsidies etc.

I agree that the upgrade versus new customer situation sucks. I cant help thinking of the Nationwide advert on TV.. 'only for new customers!' Unfortunately, its only funny cos its true...

all we can do is strike while the irons hot - but cooling - and loot them while we can!! only prolonging the agony and living a lie IMO but when you get given a new shiny for gratis, its hard to see why it should be any other way.

I am hanging on for a network to pick up the Oxygen before i make the decision to buy SIM free again and and stay PAYG.. wait and see i spose...

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#5
jchamier

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I just can't get my head around why an upgrade is more expensive than a new contract. Does this make ANY sense to anyone?


No it doesn't make any sense, but neither does the whole subsidy system. The industry is built on this approach, yet try to find anyone in the UK who wants, but doesn't have, a mobile phone!!

All the networks have this nonsense, which is why people keep moving, the govt regulator/ofcom enforced this to ensure competition.

they'd have been better off enforcing lack of subsidy. The real loser is the guy (like me) who is 5 years out of a contact and still paying the same line rental and per minute charges. charges per min and line rental should have been reduced in proportion.

Oh, its due to the 3G licneces, yeah, so who forced the mobile co's to spend ?bn's on these? They did it because they thought their business would die. Its a risk.

Sometimes its cheaper to have an unconnected phone and a French SIM..... madness.

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#6
kam_

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It doesn't have anything to do with 3g licenses, and the whole huge comission thing comes up all the time but it won't change - not yet.

About upgrades vs new connections..
The reason they do this is that they know you'll most likely just stay on the network and pay a bit more for the upgrade than go through the hassle of disconnecting and reconnecting. When you threaten to disconnect they can't be sure you're really going to so they ignore it.
The 'loyalty' or 'retentions' department is just the next layer, when you ask for the PAC code they know you'll probably go. BUT they still won't make you a deal as good as a new contract. Why should they? Worst case you'll sign up for a new contract with an insane discount, best case you take their upgrade offer and they make ?20 or whatever the difference was.
You're thinking they'll loose you as a customer, but realistically the UK market is saturated. Its a consumer market now and people are switching between operators every 12 months regardless - they go for the promotions. They're thinking you're going to go eventually anyway, so why break their backs to keep you. You're in fact exactly the kind of customer they don't want - one asking for discounts!
They know as they loose you to another network, the next call is someone defecting to them from that other network anyway.

About the large comissions...
It makes me laugh every time people blurt this out - instead of just repeating what you hear every other post complain about think about it.
The 'comissions' are artificial. The amount the network gives to the retailer could be ?1 million - it makes no difference if 95% of it is being used to subsidise the contract!
In fact the networks are loving the current situation with regards to comissions. They pay the retailer on connection, and claw back the money if the contract gets broken early. The reatiler has to further subsidise the phone out of his own comission and take the entire risk on that part of the subsidy.
Haven't you noticed the cash backs are done through the retailer and NOT the network. Also they want you're 6th, 9th, 12'th bill etc to make sure you didn't switch tariff on them. If you did, the network will claw back the difference in comission! Trust me its the retailer that gets screwed by the whole comission system so why should the networks change it?

Oh and 'Sometimes its cheaper to have an unconnected phone and a French SIM..... madness.' hasn't been true for many many many years. There are some very few (if they still exist at all) ciscumstances where it MAY be cheaper, but thats comparing a specific need against contract tariff which aren't designed to fulfill that.

And to the guy that says 'they'd have been better off enforcing lack of subsidy. The real loser is the guy (like me) who is 5 years out of a contact and still paying the same line rental and per minute charges. charges per min and line rental should have been reduced in proportion.'
sorry but you're crazy! They can't and won't reduce call charges and rental like that, because it COSTS them a certain amount to connect those calls. Why reduce calls charges, rental etc when you can't get it anywhere else for that price.
It's like saying my insurance premium should keep going down for every year i stick with that company. Doesn't make sense at all.
Remember competition, supply and demand is what drives prices. Without those any company can charge whatever they like and nothing will bring their prices down.

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#7
jchamier

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sorry but you're crazy! They can't and won't reduce call charges and rental like that, because it COSTS them a certain amount to connect those calls. Why reduce calls charges, rental etc when you can't get it anywhere else for that price.
It's like saying my insurance premium should keep going down for every year i stick with that company. Doesn't make sense at all.
Remember competition, supply and demand is what drives prices. Without those any company can charge whatever they like and nothing will bring their prices down.


I may be crazy, but have you seen the prices in Finland :) Its cheaper for a Finn to use his home phone/SIM in other countries than to buy a local contract. You may believe in market forces, however this is not a true representation due to the corruptions of the market already.

If 3G hadn't happened, the number of people with phones had paid for the 2G/GSM network over 3 times. An analogy is the Dartford Crossing, the government promised to remove all tolls when the crossing was paid for, however that was 5 years ago, and we are still paying (and the tolls are increasing) to use the crossing.

It does not cost the current amount to maintain and operate the networks, there is a glut of landline capacity (leased lines, backhaul etc), and so the reason the networks want our cash is to give their shareholders a good profit. They're a business, and making a profit for shareholders is the no 1 goal. Probably the best thing is to buy some shares in O2/T-mob/Orange/Voda ;-)

We agree on the saturation, its better to move and then move back if you want a better deal, than try and stay. Sad, but true.

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#8
mobieg

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do you not want progress? 3g is here and now 4g is coming and then you have other options as well technology is improving all the time you cannot be just living in the past.

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#9
pd.ryder

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do you not want progress? 3g is here and now 4g is coming and then you have other options as well technology is improving all the time you cannot be just living in the past.

Eh? The topic is about poor deals for existing customers... not about customers not wanting progress, whether that be 3 or even 4G.

Me-no-understand... :)

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#10
mobieg

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Eh? The topic is about poor deals for existing customers... not about customers not wanting progress, whether that be 3 or even 4G.

Me-no-understand... :)



i'm sorry pd.ryder let me try to explain myself to you.
all i was saying is that the post above mine is blaming the cost of 3g and various other factors i know the thread
has gone off course as such here !bump!

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#11
Twisticles

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You're thinking they'll loose you as a customer, but realistically the UK market is saturated. Its a consumer market now and people are switching between operators every 12 months regardless - they go for the promotions. They're thinking you're going to go eventually anyway, so why break their backs to keep you. You're in fact exactly the kind of customer they don't want - one asking for discounts!
They know as they loose you to another network, the next call is someone defecting to them from that other network anyway.


I see what you'r driving at, but it doesn't make sense. Surely in a saturated market, keeping a customer is the holy grail? Keeping market share is surely the best business model?

If a company is willing to offer huge discounted promotion to new customers, then it would be good business sense to offer the same deal to departing customers to keep them? I can't see how the network benefits, in any sense, from losing customers. The question is whether they can keep you and charge you a premium (fool!) or keep you with the same offer a new customer gets.

And as for "the kind of customer they don't want - one asking for discounts!"...well, am I? I'm asking for the same rate, for the same comittment as a new customer. By the time it gets to the point I'm asking for a PAC, they really should cut their losses and step up.

Maybe the mass mobile migration culture is one I am not part of - I had no desire to switch. But I sure as hell am not going to pay a premium (that isn't paid by new customers) to stay with a network and keep abreast of technology.

And as for people switching every 12 months...not anymore. I think you'll find most Vario II (flext) owners will have to wait 18 months to switch this time...or pay hefty get-out charges :)

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#12
richard_d

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It seems pretty much across the board - certainly not just T-Mobile where new customers get a better deal than existing users. I suspect in 16 months I might be getting my PAC code, and going the PAYG , then back again route...

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#13
Alison Astraware

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I had the half price line rental deal with W&W and was told that when my contract ends, providing I don't upgrade my phone, then my line rental will stay at half price permanently. That's the point at which I'll be buying SIM free handsets!

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#14
Evilkern

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When i came to upgrade to MDA Vario with Copilot, they wanted me to pay almost ?300 to upgrade while i could cancel and start again and get it free, seems daft that thats how they try and keep customers, the only reason i stayed was that i have a friend who works there and i get discount:)

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