Voda­fone stores over-priced hand­sets by 50% - survey

Financial Mirror (Cyprus) - - FRONT PAGE -

In a damn­ing re­port pub­lished on Mon­day, Voda­fone Greece has been found to have over-priced hand­sets mar­keted as "sub­sidised", ac­cord­ing to re­search in var­i­ous Euro­pean mar­kets look­ing at how the tele­com gi­ant prices its hand­sets, with con­tracts and hand­set-only deals.

The study, con­ducted by IPM Me­dia Con­sult­ing in July last year at 30 Voda­fone re­sellers, sug­gests that this over pric­ing came at a time when Greeks were in the midst of their worst eco­nomic cri­sis since WWII and re­tail­ers were try­ing to lower prices to en­cour­age cash-strapped con­sumers to spend. “Our find­ings should alarm all Voda­fone Greece cus­tomers, and Voda­fone cus­tomers across Europe, for what we be­lieve was wide­spread over-pric­ing of hand­sets,” said IPM Me­dia spokesman John Kaponi.

“In some cases, hand­sets saw a mark-up of 51% com­par­i­son to prices on the open mar­ket,” he said.

Mo­bile phone con­tracts nor­mally con­sist of sell­ing a hand­set with a sub­sidy and at the same time a com­mit­ment from the con­sumer that he or she will pay a monthly fee for 12-24 months.

The IPM Me­dia study, that also in­cluded Italy, Ire­land, Spain and Ger­many where Voda­fone has ex­ten­sive fran­chise re­tail op­er­a­tions, found that the ini­tial value of the hand­sets, mar­keted as "sub­sidised de­vices" was sig­nif­i­cantly more ex­pen­sive in relation to the price of other au­tho­rised sup­pli­ers that are freely ac­tive in the rel­e­vant mar­kets and are not bound with con­tracts.

As a re­sult, the con­sumer is buy­ing the hand­set from Voda­fone at a sig­nif­i­cantly more ex­pen­sive price than from a third party-sup­plier will sell the same de­vice, with­out com­mit­ments.

The re­search was com­mis­sioned by a for­mer Voda­fone part­ner in Greece, Mo­bile Trade Stores, that has com­piled a

in dossier of in­for­ma­tion about the way Voda­fone op­er­ates its fran­chise re­tail net­work across Europe, and will form part of an EU com­plaint to be in­ves­ti­gated by au­thor­i­ties in Brussels

Some in­dica­tive price cases for mo­bile de­vices:

- July 2013 price list of Voda­fone, the re­tail sell­ing price (with­out sub­sidy) of the de­vice was 739 euros. When sold by an au­tho­rised dealer, or by the man­u­fac­turer, with­out any client’s com­mit­ment to re­main to the Voda­fone net­work, the price was 487.99 euros. Re­tail price of Voda­fone was 51.4% more ex­pen­sive. - The same de­vice with the 18 month con­tract plan RED 1 (with­out credit) was sold "sub­sidised" for 677.5 euros, while with a con­tract for 24 months in the same pack­age it was sold at a "sub­sidised" price of 622.15 euros. The "sub­sidised" de­vices, with the client’s com­mit­ment to re­main on the Voda­fone net­work for 18 or 24 months, were sold more ex­pen­sive by 38.8% or 27.49%, re­spec­tively, com­pared to the

re­tail price that ex­isted in the mar­ket.

- Ac­cord­ing to the Voda­fone July 2013 price list, the re­tail sell­ing price 739 euros when sold by au­tho­rised deal­ers or by the man­u­fac­turer, with­out any client’s com­mit­ment to re­main to the Voda­fone net­work, in a re­tail price of 575. Voda­fone was 28.5% more ex­pen­sive. - The same de­vice with the 18 months con­tract plan RED 1 (with­out credit) was sold "sub­sidised" for 677.5 euros, while with a con­tract and the cus­tomer’s en­gage­ment for 24 months in the same plan it was sold at a "sub­sidised" price of 622.15.

- The "sub­sidised" de­vices, with the client’s com­mit­ment to re­main on the Voda­fone net­work for 18 or 24 months, were sold more ex­pen­sive by 17.8 or 8.2%, re­spec­tively of the re­tail price that ex­isted in the mar­ket.

- Voda­fone re­tail sell­ing price (with­out sub­sidy) for the Sony Xpe­ria Z was 699 euros when sold by an au­tho­rised dealer or by the man­u­fac­turer. With­out any com­mit­ment to re­main to the Voda­fone net­work, the price was 456.18. Voda­fone was 53.2% more ex­pen­sive. - The same de­vice with the 12 months con­tract plan RED 1 (with­out credit) was sold "sub­sidised" at 688.70 euros, the same de­vice with a 18 months con­tract in the same pro­gramme was sold "sub­sidised" at 637.5 euros, while with a con­tract and the cus­tomer’s en­gage­ment for 24 months in the same pro­gramme it was sold at the "sub­sidised" price of 582.15. The "sub­sidised" de­vices, with the client’s com­mit­ment to re­main in the Voda­fone net­work for 12, 18 or 24 months, were sold more ex­pen­sive by 53.2%, 39.7% and 27.6%, re­spec­tively, of the re­tail price that ex­isted on the mar­ket.

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