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GREECE: Vodafone stores over-priced handsets by 50% - survey.

In a damning report published on Monday, Vodafone Greece has been found to have over-priced handsets marketed as "subsidised", according to research in various European markets looking at how the telecom giant prices its handsets, with contracts and handset-only deals.

The study, conducted by IPM Media Consulting in July last year at 30 Vodafone resellers, suggests that this over pricing came at a time when Greeks were in the midst of their worst economic crisis since WWII and retailers were trying to lower prices to encourage cash-strapped consumers to spend.

"Our findings should alarm all Vodafone Greece customers, and Vodafone customers across Europe, for what we believe was widespread over-pricing of handsets," said IPM Media spokesman John Kaponi.

"In some cases, handsets saw a mark-up of 51% in comparison to prices on the open market," he said.

Mobile phone contracts normally consist of selling a handset with a subsidy and at the same time a commitment from the consumer that he or she will pay a monthly fee for 12-24 months.

The IPM Media study, that also included Italy, Ireland, Spain and Germany where Vodafone has extensive franchise retail operations, found that the initial value of the handsets, marketed as "subsidised devices" was significantly more expensive in relation to the price of other authorised suppliers that are freely active in the relevant markets and are not bound with contracts.

As a result, the consumer is buying the handset from Vodafone at a significantly more expensive price than from a third party-supplier will sell the same device, without commitments.

"This alone raises serious questions and doubts as to the commercial policy followed by Vodafone and the real goals of it," people in the know suggest.

The research was commissioned by a former Vodafone partner in Greece, Mobile Trade Stores, that has compiled a dossier of information about the way Vodafone operates its franchise retail network across Europe, and will form part of an EU complaint to be investigated by authorities in Brussels

Some indicative price cases for mobile devices:

Samsung i9505 Galaxy S4 LTE 16G Mist G

* July 2013 price list of Vodafone, the retail selling price (without subsidy) of the device was e1/4739. When sold by an authorised dealer, or by the manufacturer, without any client's commitment to remain to the Vodafone network, the price was e1/4487.99.

Retail price of Vodafone was 51.4% more expensive.

* The same device with the 18 month contract plan RED 1 (without credit) was sold "subsidised" for e1/4677.5, while with a contract for 24 months in the same package it was sold at a "subsidised" price of e1/4622.15.

The "subsidised" devices, with the client's commitment to remain on the Vodafone network for 18 or 24 months, were sold more expensive by 38.8% or 27.49%, respectively, compared to the retail price that existed in the market.

Apple IPhone 5 16G

* According to the Vodafone July 2013 price list, the retail selling price e1/4739 when sold by authorised dealers or by the manufacturer, without any client's commitment to remain to the Vodafone network, in a retail price of e1/4575.

Vodafone was 28.5% more expensive.

* The same device with the 18 months contract plan RED 1 (without credit) was sold "subsidised" for e1/4677.5, while with a contract and the customer's engagement for 24 months in the same plan it was sold at a "subsidised" price of e1/4622.15.

* The "subsidised" devices, with the client's commitment to remain on the Vodafone network for 18 or 24 months, were sold more expensive by 17.8 or 8.2%, respectively of the retail price that existed in the market.

Sony Xperia Z

* Vodafone retail selling price (without subsidy) for the Sony Xperia Z was e1/4699 when sold by an authorised dealer or by the manufacturer. Without any commitment to remain to the Vodafone network, the price was e1/4456.18.

Vodafone was 53.2% more expensive.

* The same device with the 12 months contract plan RED 1 (without credit) was sold "subsidised" at e1/4688.70, the same device with a 18 months contract in the same programme was sold "subsidised" at e1/4637.5, while with a contract and the customer's engagement for 24 months in the same programme it was sold at the "subsidised" price of e1/4582.15. The "subsidised" devices, with the client's commitment to remain in the Vodafone network for 12, 18 or 24 months, were sold more expensive by 53.2%, 39.7% and 27.6%, respectively, of the retail price that existed on the market.

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Publication:Financial Mirror (Cyprus)
Date:Sep 22, 2014
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