mzqa395
02-07-2007, 02:32 PM
n a 'desperate' sales plan to force up UK subscriber numbers, Vodafone is handing out free mobile phones and hundreds of thousands of pounds worth of calls.
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The phones giant is giving away pre-pay handsets to customers when they walk into stores to renew their contracts.
Others are offered Sim cards that provide free calls and text messages from existing phones.
Each time a new phone is switched on or a call made with a fresh Sim card, Vodafone will register a customer and keep them on the books for three months - even if the handset is dumped as soon as the giveaway airtime is used up.
Industry analysts said the move was desperate. Vodafone's first quarter ends today, with key performance numbers reported to City investors on July 19.
The company is also facing a series of hostile resolutions from a shareholder activist firm lead by ex-Marconi finance chief John Mayo at its annual meeting on July 24.
When Financial Mail visited a Vodafone branch in London's West End, we were promised free Sim cards. A member of staff admitted: 'It is to boost customer numbers.'
Giving away pre-pay handsets appears to break ground in the UK mobiles market. 'It is desperate,' said one industry source. 'It will all come out in the wash as the customer churn rate shoots up.
'If these tactics have been going on for a while, it explains why Vodafone managed to do so well in the last quarter of 2006-7 when everyone else lost ground.'
Vodafone said the deal was an experiment in parts of London for contract customers. It may be rolled out nationwide.
Rival T-Mobile, owned by troubled Deutsche Telekom, is adopting an unusual marketing ploy. It is raising pre-pay calls from 12p to 15p a minute for other networks and 5p to 8p a minute for calls to T-Mobile customers.
It is believed to be the first price increase in UK mobile industry history.
http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=421880&in_page_id=3&ct=5
Skip additional links
WANT TO KNOW MORE?
* REPORT: Vodafone in shares riddle
* Compare mobile phone tariffs to find the cheapest deal
* POLL: Are you 'reasonably happy' with your mobile phone provider's quality of service?
OTHER STORIES
* US private equity swoops for Virgin Media
* Market report: Monday latest
* Sunday newspaper share tips
* Property magnate buys landmark skyscraper
* Eurostar joins alliance to battle airlines
FTSE LATEST
6606.10-1.80
Go to Market data
SHARE DEALING
Money Buy and sell shares for a flat fee of just £12.50 through our easy-to-use share dealing service. >> Share dealing
POWER PORTFOLIO
Share prices on screen This is Money's free and unique Power Portfolio tool allows you to keep track of your shares and funds. >> More
NEWSPAPER SHARE TIPS
Money This is Money carries all the lastest share tips from newspapers and investment magazines. >> Share tips
The phones giant is giving away pre-pay handsets to customers when they walk into stores to renew their contracts.
Others are offered Sim cards that provide free calls and text messages from existing phones.
Each time a new phone is switched on or a call made with a fresh Sim card, Vodafone will register a customer and keep them on the books for three months - even if the handset is dumped as soon as the giveaway airtime is used up.
Industry analysts said the move was desperate. Vodafone's first quarter ends today, with key performance numbers reported to City investors on July 19.
The company is also facing a series of hostile resolutions from a shareholder activist firm lead by ex-Marconi finance chief John Mayo at its annual meeting on July 24.
When Financial Mail visited a Vodafone branch in London's West End, we were promised free Sim cards. A member of staff admitted: 'It is to boost customer numbers.'
Giving away pre-pay handsets appears to break ground in the UK mobiles market. 'It is desperate,' said one industry source. 'It will all come out in the wash as the customer churn rate shoots up.
'If these tactics have been going on for a while, it explains why Vodafone managed to do so well in the last quarter of 2006-7 when everyone else lost ground.'
Vodafone said the deal was an experiment in parts of London for contract customers. It may be rolled out nationwide.
Rival T-Mobile, owned by troubled Deutsche Telekom, is adopting an unusual marketing ploy. It is raising pre-pay calls from 12p to 15p a minute for other networks and 5p to 8p a minute for calls to T-Mobile customers.
It is believed to be the first price increase in UK mobile industry history.
http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=421880&in_page_id=3&ct=5