[3GScottishUser]

From Mobile Today (03/06/2005):

3 is pursuing civil action against a dealer for box breaking as it begins cracking down on abusers of its heavily subsidised prepay handsets.

3’s fraud team worked with the police to press its claims against the dealer on the grounds of breaching 3’s terms, which stipulate that the Sim cards are 3’s property and not to be sold separately.

A period of frenetic box-breaking is thought to have taken place between November 2004 and January 2005 as traders exploited the wide gap between prepay prices and Sim-free prices on the open market. Heavily subsidised NEC handsets carried up to 100% mark-up during the period as units were sold Sim-free overseas.

Despite 3 cooling its prepay handset subsidies, the box-breaking deal of the month is another handset on 3: the Motorola C975. Stores such as Woolworths and Argos have been selling the handset for £60 and box breakers have been selling it abroad, where it is understood to command a price of £70 or more.
Breakers are reckoned to sell in batches of 200 handsets and profit from selling Sim cards for around £2.

3 is targeting traders on eBay and other websites where it thinks its Sims are being sold.

Asked whether 3 would mount a vigorous campaign against box breakers, 3 COO Gareth Jones (pictured) said: ‘We’re exploring those avenues. If people breach our terms and conditions we will pursue them.’

He also said: ‘99.9% of the dealer community is not involved, but if things are being done illegitimately there’s money going out of the industry. We should take this seriously. It’s an industry-wide issue.’
A spokeswoman for 3 said: ‘We are actively pursuing people selling our product outside our terms and conditions. We will be going through civil proceedings.’

She also said the operator was looking to repossess handsets and Sim cards sold through box breaking and reclaim any money made by breakers.

• Separately, Jones looked to calm fears that its new direct sales website would cause channel conflict. He said there wouldn’t be any preferential deals on 3’s website compared to its channel partners and there were no plans to open a direct sales call centre. ‘We’re not trying to steer customers away. It’s not our strategy to displace our other channel partners.’

Jones said he didn’t believe a direct sales agenda was inevitable given 3’s planned flotation and the need to lower acquisition costs. Referring to the cost of stores and call centres, Jones said: ‘There’s a variable cost with indirect rather than the fixed costs of direct. There’s not a hell of a lot of difference.’

http://www.mobiletoday.co.uk/artman-test/publish/article_434.shtml

[Hands0n]

Is this an insanity to close off the supply of Threepay USIMs on eBay? USIMs that are subsequently used and topped up in handsets however come by?

I'd have thought that Three would be appreciative of any income that it can get. After all, a £15 top up is a £15 top up regardless of from where the USIM was sourced.

But then again, I suppose Three is making so much money that it really does not need such scummy customers as me and the family memeber that are on Threepay courtesy of the eBay USIM market.

As good old Benny Hill might have once said .......... "Sirry irriots"

[Ben]

I also only have a Threepay courtesy of eBay! Perhaps the demand should be seen as an obvious channel of expansion!

If Three wants to go down the high-sub prepay route then perhaps they should concentrate their efforts on finding a manufacturer that will make them an exclusive handset with some kind of inbuilt USIM that's completely dedicated to Threepay. To release 'standard' locked handsets and then back up their high subsidies with litigation is just cheeky - they're wasting a lot of peoples time through their own marketing strategy.

Still, some people got some excellent deals through the big Threepay giveaway. Good for them!

[Hands0n]

Agree totally Ben. This heavy handed approch will only alienate dealers and customers alike. But it may be that Three have reached their critical mass and no longer need any new Customers! I think they've shot themselves in the foot with this one. If the [eBay] process is getting Handsets and USIMs into peoples hands, albeit illegitimately, where's the harm? They need all the market penetration that they can get and they go down this route? Monty Python couldn't make it up ..........