Smash and grab
Seems like a smash and grab by EE and Vodafone
EE has scooped up 58 Phones 4u stores from the beleaguered High Street retailer, one week after it slipped into administration. The mobile operator, which was partially blamed by Phones 4u for its surprise collapse, revealed the £2.5m purchase in a brief statement to The Register: We can confirm that we have agreed with the …
What was the point of a company that had little margin for discounting and only sold phones on two of the four networks? Phones4U was well and truly shafted by its own management when they loaded the company down with debt.
Why would EE continue selling them phones and airtime at a discount when they could sell the same package through their own store and make more money? P4U only made sense if they provided phones for all, or most of the networks and you could shop around.
"Why would EE continue selling them phones and airtime at a discount when they could sell the same package through their own store and make more money? "
Except they won't do that.Phones 4U and CPW often seemed to have better deals than the networks themselves for whatever reason. Now the networks won't have to compete with their own agents, which makes sense I guess, but you're deluding yourself if you believe that means they'll offer P4U/CPW-style discounts.
EE would have been competing with its self. If P4U were selling contracts for the other 3 networks also then you would have had competition and it was about the best deal you could get. CPW still do that. When P4U lost O2 then the choice between Voda and EE limited that competition and made them less valuable. When Voda dropped their contract it would have made P4U an EE only outfit, your choice being buy from EE or P4U (with little or no discount). The cost of doing business with P4U became more than the business was worth.
As it is the 4 networks still compete among themselves, and MVNO's fight for a slice. There are many phone stores available and CPW still offers the full choice of networks in one place. P4U has been the victim of its own management greed in that they left it little room to manoeuvre on prices, and that's what killed it.
P4U was an agent of EE and Vodaphone. They put customers together with EE/Voda contracts, making them an EE/Voda Customer.
They had quite a bad reputation, and this ultimately gets knocked on to whichever network the Customer gets paired with. They got sick of their brand being tarnished by a bad customer experience.
This is likely the case on all operators pages - people rarely post in a utility companies social space unless they have a problem.
Thus, all you see is complaints - as the page is used as a care channel.
Most people don't bother telling an operator when they're happy and have no issues, so the important part is in seeing how their care/social team actually resolves problems, not that customers need help.
EE and Vodafone need no outside help when it comes to brand reputation and Phones4u were certainly no worse.
That phones4u did do, however, was offer a variety of handsets that the networks sometimes didn't carry themselves and (from my experience) undercut the carriers using a like for like comparison thus breaking the carrier cartel.
Consumers will be poorer as this is another supply route cut off.
@FartingHippo; to be fair, you might get lucky. You might get a generic popup "Gifts" shop (complete with cheap sign) selling generic tat such as large prints of Elvis, framed "Scarface" posters, inflatable novelties and other toss that no-one in their right mind would actually want as a "gift".
*Someone* must be visiting these places (because I'm sure as hell not) and I feel sorry for their friends.
I wouldn't know what shops are in town any more. I go to Carlisle once every 2 weeks with the kids to the library. I park on the 1 hour parking then leave pretty quickly. Last time we looked around town it was grim; costa, starbucks, phone shops, fake fronts and charity shops. Even the tat bazaars had closed down (although the *3x* game shops were still there). Since the council are now proposing to remove all free parking then it will be pretty much the same price to *BUY* books from ebay than park in town and use the library.
Back to phone shops there was a three store, O2, (old T-Mobile EE), (old vodaphone) EE, CPW, P4U, Apple and two independents that also repaired/unlocked phones (and sold phone tat).
Maybe the PE company had seen the writing on the wall for that retail model, and extracted it's investment making failure the banks problem and no its.
I think if I were a Carphone Warehouse retail employee, I'd start getting worried about when the network starts on them, prior to moving to an internet only model, with a few flagship stores.
Other news suggests that might well be Apple and Samsung stores.
Mind you, at one time Electricity, Gas and Telephones all sold direct to the customer, and now, pretty much don't. So maybe Dixons and Carphone merging was the really smart move.
"Maybe the PE company had seen the writing on the wall for that retail model, and extracted it's investment making failure the banks problem"
Indeed. PE is well-known for taking over companies that go bankrupt shortly after yet still managing to come out with a healthy profit. Nothing strange or dubious about that. *cough*
We discussed PE's modus operandi with relation to Phones 4U already:-
I wonder if the one in the Kingfisher Centre in Redditch will be saved ? Mainly because watching that place is like looking into the future ... 33% of retail space is empty.
I once had an idea to ring up the management company, pretending to be investing in a new venture combining greeting cards, mobile phones, shoes, and tat fashion, and see if they twigged I was taking the piss ...
Here's a hypothetical situation:
Farmer Giles and Farmer Jones both supply a 3rd party chain of shops with cheese "Cheese 4 U". "Cheese 4 U" sells cheese from multiple farmers. Farmers Giles and Jones also have their own chains of farm cheese shops, from which they sell their own cheese exclusively. Competition in the cheese market is healthy.
Both farmers open up a channel of communication: "Hey, if we both agree to stop supplying our competitor with cheese, they'll have no choice but to close, and we can carve up their cheese re-selling business between us."
"Hey, that does sound like a great idea. Isn't it anti-competitive though?"
"Don't worry. We'll pull the plug on cheese supply first, then give it a couple of months and you can pull your supply of cheese. You can state that due to certain factors (obviously contributed to by our cessation of cheese supply, but you be creative there) you're also ceasing cheese supply to the company.
It'll have no choice but to go belly up and we can move in for the kill!! The high-street cheese market will be ours for the taking and we can get rid of our competitor in the cheese supply market."
"What about the competition watchdog?"
"Don't worry about them, this will totally go under the radar. Nobody likes them anyway! It's a fool-proof plan! Do you fancy some cheese-on-toast?"
Having spent three months recently battling to get an iPhone unlocked on T-Mobile (EE) my advice is to buy your own unlocked device outright, then get a SIM for it separately and don't tie yourself into a long contract. Not only is it cheaper overall to do it this way, it's easy to get a PAK code if you want one and go elsewhere. It saves any futile rantings on an operator's Facebook page.
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