O2 offers incentives to end phone upgrade insanity
Keep your old handset and gain call credits
UK mobile phone network O2 is to pay customers not to upgrade their handsets - a move that turns the usual approach to phone sales on its head - all in the name of going green.
O2 said today it will give customers £95 call credit and donate £10 to the Energy Saving Trust (EST) charity if they agree to keep their current handset for at least a year longer. Punters can also opt for £100 credit, but no money will go to the EST.
New customers who just buy a SIM to use in their old handset will trigger a £5 donation to the EST. Anyone who signs up for the O2 Energy Saver deal will get a new contract. These options will be offered to punters from 28 April.
O2 claimed its goal was to reduce the amount of carbon emitted into the atmosphere by not only manufacturing new handsets but also distributing them to carriers, to shops and on to consumers.
Still, given the weight phone makers put behind the regular, four-times-a-year introduction of new handsets, it's hard to see O2's efforts, commendable though they may be, having any real effect on carbon reduction. Still, you've got to start somewhere, we suppose.
The money going to the EST will be used to build up a fund which, from June 2007, will be used to award grants to communities keen to implement carbon-reduction schemes of their own.
COMMENTS
Economics
In countries like the UK where the MNO (Mobile Network Operator) subsidises the cost of your phone, they need to make back notonly the running costs of the network and your number and services, but also recoup the cost of your mobile phone (which you've probably got for free).
The actual cost of your "free phone" that the MNO pays out to the Manufacturer can be anywhere between £50 and £400+, depending on the handset, even excluding VAT and taking into account bulk unit ordering discounts (a single MNO in the UK may order anything up to 40,000 units of a single model of handset in one go to meet future anticipated demand). That average handset cost to the MNO is around £250-£300 and is increasing as time goes on due to the ever-increasing technical complexity (and therefore R&D and manufacturing costs) of mobile phones.
The more an MNO can persuade it's customers to keep their phones for longer via cashback, credits to your account or extended term contracts, the more money it saves.
In some countries I believe that it is illegal for the MNOs to subsidise the cost of the handset. You pay the full-on handset only cost of the phone as if you'd bought it directly from the manufacturer, but you then pay a lot less over the duration of your contract as the price of your monthly tariff is not covering the cost of your phone.
Personally, I'm still using my Sony Ericsson P910i that I've had for two-and-a-half years; the battery life isn't quite as good (I need to charhe it every 2 or 3 days now). Apart from that it works perfectly, despite me having dropped it down two flights of stairs and under a bus since I got it.
I wonder if....
Will they be checking the IMEI, or just whether you buy an upgrade deal through them?
If they don't check if your IMEI changes, there's nothing stopping you buying a new cheapo phone every time they die... I imagine 95 pounds would cover an el-cheapo Nokia quite nicely and still have change left over. And you only need to do that *if* the phone dies.
Would be nice if manufacturers did the same...
The mobile phone manufacturers have been doing various dirty tricks that encourage upgrading.
Poor build quality is one, making a phone unlikely to last much longer than 18 months.
Firmware cons is another. Often a phone is released with buggy firmware or just plain stupid functionality. Some of this never gets fixed in a firmware upgrade: you'd have to purchase a new model with almost identical features with the old problems fixed and new ones added.
For example I've got an older phone which runs Windows mobile 2003 and is buggy as hell. There is a model with almost identical specs which runs WM 5 and there are new similar models that run WM6.
There is no firmware update to WM5 or WM6 for the older models and never will be even though the hardware is quite capable of supporting it.
This has almost become the accepted way of doing things: imagine the uproar if the same happened with PCs.
Old idea rehashed
It's a bit cheeky; I told O2 i was quite happy with my Nokia 6260 (don't laugh) when my contract initially expired 18 months ago. I renegotiated the contract, told them i didn't want an upgrade then, and landed myself with a nice £100 credit then.
It seems to be an old idea, paraded around with new bells and whistles in today's push for greener lifestyle.
It's a start, it will please a lot of environmentalists, and the consumer should have a better deal in the long run. Hell, for a low user, the £100 will pay for half the new contract term :)
Vodafone offer a rebate
Last week Vodafone offer to pay £100 back into my bank account if I didn't upgrade. I'll probably still replace my phone coz I think it's S**T, but if I wasn't so pissed off with the phone I'd probably go for it.
