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O2's and Vodafone's "idiot upgrade package"

"...nk you for calling O2 Ireland. Your call is important to us. Please stay on the line and a customer care representative will be with you shortly."

I was walking through Dublin this afternoon and I saw that finally O2 and Vodafone released the Nokia 3650 here (Not bad eh? Only 9 months after the rest of the world). Hey! I think. Cool.

I walk into the store. "Hi", I say to the excessively smiling employee, "I am an O2 customer and I was wondering what was the price to upgrade my current phone, which I have with a contract with O2, to a Nokia 3650."

"Allright sir, what's your phone number?"

So I give her my details and she checks the account. "Sorry. But you are not eligible for an upgrade until December."

"December? But I have this phone since November 2001."

"Exactly. You have to be on a contract more than two years to be eligible for an upgrade."

This was already going badly. Two years? What the hell? It wasn't as if my current phone was heavily subsidized or anything, I had paid nearly list-price to get it with a contract back then (almost 200 Euro in 2001).

Anyway, I say, "Okay, so what will be the price for the upgrade?"

At this point, we must keep two things in mind: 1) The SIM-less phone, new, off Amazon or a store a block away from where I'm standing, costs 500 Euro. And, 2) If you get a new contract with O2, with the Nokia 3650, the up-front price is Euro 230.

Okay. Ready for the reply?

"The upgrade will cost you Euro 329."

"I'm sorry?" I say.

"329 Euro for the upgrade."

I turn around and point at their display with phones and prices. "But over there it says that getting a new phone costs 230."

"That's correct."

(Whenever they get so formal in their speech you can almost hear the echo "Right, you moron, so what's new.")

So I say: "That doesn't make sense. I've been an O2 customer for 2 years. On a billing plan. Always paid in time. And when I want to upgrade, you want to charge me more than anyone else? Why would I do that?"

She says, "Well, you get to keep your number."

Right. That's it? I say, "Well, with number portability I can move over to Vodafone for less than that."

She looked confused for a moment. Then she blurted out. "Well, but Vodafone doesn't have many phones."

LOL. At this point I just said, "Okay, thanks," turned around, and left.

Off to Vodafone. Over there another friendly employee told me that moving over from O2 would cost me Euro 270 plus 30 a month (which is what I"m paying with O2 anyway). So the price is still outrageous, but I save 60 Euro that way. (Btw, I asked at Vodafone for GPRS data rates. The answer? "Cheap. Cheap." How cheap? "Oh, only 20 cents per kilobyte" I don't need to explain my reaction).

When I get home, I call O2 "Customer care" which after several minutes of the friendly message quoted at the beginning and a number of menus, gets me to a real person. We go through the same routine. She patiently explains that that's the price. Yes. Correct. 330. Yes. So when I ask, why would I stay with O2 then? She says "Well, you get to keep your number."

Again, that ridiculous answer.

I pressed with the question. "I'm sorry, but that doesn't make any sense. I can switch over to Vodafone and because of number portability I can keep exactly the same number." The new answer had more information. "You see," she said "When you want to upgrade with Vodafone they'll charge more too."

So I said, "Sure. Maybe. But right now I save money by switching. And if they want to pull that later, I'll switch over back to O2 again and you'll be friendly enough to charge me less."

Silence. "Well, yes. That's your choice."

"Okay," I said, "I just thought I was wrong, but I realize that this doesn't make any sense at all. Thanks."

And there it was.

In essence, both O2 and Vodafone have what amounts to the "idiot upgrade feature" which probably reads in some internal memo as follows: "If customers have been stupid enough to pay for our overpriced services for two years, surely they will be stupid enough to pay for an upgrade at a price higher than a new phone as well."

They're so blind, so engrossed by their almost illegally stratospheric profit margins that they can't see that in a couple of years people will be using IP-based systems for everything. If they don't bring down GPRS pricing, then we'll use the WiFi chip in whatever device is easiest (and phones with GRPS+Wifi are not far behind--some handhelds already do it). Their precious "you'll lose your phone number" will be worthless. Already email addresses, IM nicknames and such are on equal footing with phone numbers as far as "personal IDs" are concerned. The importance of the all-digital IDs will only increase as more and more IP-based services go mobile.

Conclusion: they prefer people to alternate between them every two years even if that costs more money for them (signing a new customer, after all, is more expensive for them than just changing the phone on an existing customer). I'll certainly go that way. And eventually, they won't matter anymore. And in a few years, they will be pulling their hair out wondering why their customers don't seem to care about phone numbers any more.

But then it will be too late.

Categories: technology
Posted by diego on October 15 2003 at 6:30 PM

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