[3GScottishUser]

From Mobile Today (22/04/2005):

3 has dropped upgrade commissions by around £30 this month, to bring it more ‘in line’ with other operators, it said.

The actual drops in dealer commissions vary from £30 to £40, depending on the distributor. 3 has also stopped its half-price line rental offers for upgraded customers.

The move away from an aggressive push for upgrades is in stark contrast to this time last year when 3 raised upgrade commissions to ensure LG’s first handset, the U8110, would ‘explode onto the market’ (Mobile, 28 May 2004).

Twelve months on, the customers attracted by last year’s push are becoming eligible for upgrades. However, the operator is keen to reduce its exposure to high upgrade subsidies.

3 claimed the commissions have been changed to reflect a larger handset portfolio and a greater choice of tariffs compared to 12 months ago. The operator said the changes have given it more leeway to move in line with its rivals in terms of dealer commissions.

A 3 spokeswoman said: ‘Now we have a greater range of handsets, price plans, and the best proposition in the market. Our commissions are still within the industry norms.’

One dealer told Mobile: ‘They [3] like churn from other networks to 3. This will only encourage churn from 3.’

Another admitted that he has found it difficult to persuade 3 contract customers to stay with 3 and upgrade, even before 3 changed its commissions. He said: ‘We haven’t done a lot of upgrades [to 3]. Many customers don’t want to stay on 3 anyway.’

However, one dealer said he had found customers keen to benefit from churning onto another operator’s prepay account and then signing onto a new contract with 3 a month later.

http://www.mobiletoday.co.uk/artman-test/publish/article_319.shtml

[Hands0n]

Amazingly polarised comments and views in these articles are becoming more commonplace. Are Three in [corporate] denial or is this just more of the "spin" that we should by now be used to in all walks of life? Only 2005's end of year figures will tell the truth.

Regardless of the subsidy investments made, mobile ops will not be able to contain attrition to rivals if they cannot compete on at least an even footing. And that, I believe, is Three's biggest problem. They slugged it out on price in 2004 and did a reasonable bit of business too. But 2005 sees the VPNs like Fresh and Easymobile coming out of the woodwork (almost none of my peers has ever heard of them so a big publicity push is needed if they want to make their mark).

April already and the sounds of a "Price War" still only sound like yer average Guy Fawkes night :)

[Ben]

I must say, ‘They [3] like churn from other networks to 3. This will only encourage churn from 3.’ sounds like a very big assumption to me. The former does not necessarily make the latter true - good retention tactics should be able to retain even the most determined mobile users as most people wont change networks just for the hell of it if they're getting a good deal where they are.

I find it interesting that the port-out port-in method of self-upgrading to get the best deal is mentioned here. It has obviously become somewhat acceptable practice to dealers and speaks volumes about all the networks attitudes to existing customers.