Feeds

Caudwell jackpot is a bet that mobile networks can't stop infighting

You scratch my eyes out, I'll scratch yours

Security for virtualized datacentres

Comment The astonishingly high price put on Phones4U by the equity capital community is a cynical bet on the disorganisation of the mobile networks.

One straw blowing in the wind: a complaint back in June from the Digital Evangelist - an industry insider, who had been pestered by phone retailers to "upgrade his handset".

This high power consultant has been campaigning steadily against the abuse of privacy which sees him, his friends and family, constantly called by people claiming to be "Orange Upgrade Centre" or some other network name, but who are in fact taking advantage of the "churn incentives" the networks offer retailers.

The deals are, superficially, irresistible. In fact, they are whatever phone the retailer has, which would normally be skipware; and the contract is rarely as good as the one the subscriber already has. But good salesmanship can see people abandoning very good contracts with nice phones, and getting an obsolete handset, and paying far more.

The networks lose out; most of the profit from this goes to the retailer.

As Digital Evangelist says: "The economics of the mobile market are flawed and at present not likely to change. The networks are starting to remove some of the distributors whose actions are too aggressive, but these people still have their own customer lists who they are prepared to churn to another network. The need to keep customer numbers up rather than grow margins means that the offer of a few thousand new ones is too much to reject."

In theory, the networks could stifle this business tomorrow, by stopping the practice of paying retailers to recruit new subscribers.

In practice, the networks are all addicted. They can't stop buying new accounts until their rivals do. And until they all form what would, really, be a cartel, nobody will break ranks.

What the equity capital people are saying is that they are betting on this chaotic situation continuing, and for huge profits to be available on a parasitic level, as the networks scratch great gobs of each other's flesh off in the attempt to be biggest.

Copyright © Newswireless.net

Protecting against web application threats using SSL

More from The Register

next story
Brit telcos warn Scots that voting Yes could lead to HEFTY bills
BT and Co: Independence vote likely to mean 'increased costs'
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Turnbull: NBN won't turn your town into Silicon Valley
'People have been brainwashed to believe that their world will be changed forever if they get FTTP'
Blockbuster book lays out the first 20 years of the Smartphone Wars
Symbian's David Wood bares all. Not for the faint hearted
Bonking with Apple has POUNDED mobe operators' wallets
... into submission. Weve squeals, ditches payment plans
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.