I recently decided to get a smart phone to
join the band wagon of mobile tweets, Facebook comments, cheap VOIP calls and non-stop
whatsApp messaging. Our generation has witnessed mobile technology taking the world
by a storm. We continuously see amazing apps, screen resolution, processing
speed (quad-core in a mobile is the talk of the day) and powerful cameras being
integrated into beautifully crafted gadgets. Not limited to phone hardware and
software features, advancements have also been made in mobile data
communication networks which have moved into their 4th generation offering
speeds to manage expected data traffic in near future. Along with all the
brilliant advancements being driven by engineers the MBA’s are not left out
either and have come up with new marketing and sales strategies to bundle smart
phones and data/voice plans. I think most of you would agree that a data plan
from a reliable operator is almost mandatory for modern phones to exhibit their
smartness else it would not take them long (going out of WIFI reach) to become
dumb. So I decided to get a smart phone with a data plan and this blog is to
share my learning in doing so.
Being a “well- informed” customer and knowing
that the franchisee showrooms generally offer a higher price I looked-up O2
Germany’s website (a part of the Spanish Telefonica group of companies). The mobile
phone collection was impressive ranging from Apple iPhone to Samsung Galaxy, Sony
Experia and Nokia Lumia. Smartness was further augmented with well-crafted data
(flat rates with good combinations of 2G and 3G network usage) and voice plans
(like flat rate calling in various networks, SMS options etc.). To facilitate
the customer and reduce her financial burden O2 also suggested taking the phone
in easy 0% interest installments i.e. you can either pay the entire phone cost
upfront or split it into 24 easy installments. In all, the arrangement is
nicely tailored for a customer looking to go mobile, pay the phone cost along
with a separate voice and data plan for a period of 24 months. After the first
24 month period, only the voice and data plan charges continue to exist as you
would have already paid of the bought phone. The contract has the standard conditions in Germany,
to be terminated after 24 months if O2 is informed 3 months prior to the
contract finishing date. Else there is a
default extension of 1 year (with same price and services). Things look pretty
transparent in the story with an offer clearly differentiating the phone and
the service price. However three things didn’t look very right to my eyes:
- I always believed that I can find the same phone cheaper than the price listed on the o2 website (say through a vendor on Amazon).
- Why shall the down payment price be equal to the price a customer decides to pay in 24 monthly installments? With common sense anybody shall select the 24 month installment plan which is nothing but a small “gift” from the company in question here (use now pay later).
- I have been an O2 customer for last 6 years and I clearly remember the pre-smart-phone era where the phone price was set according to different data plans. Earlier, if I selected a monthly plan costing 40 Euros a month then I was charged a lower price to own the phone in comparison to somebody opting a 10 Euro per month plan for 24 months. This is not the case anymore; price of the phone has been made separate from the data plan. Basically a new sales model!
Small doubts instigated me to do some more
research to look into the phone subscription models existing for a potential customer
like me. I checked several websites offering different subscription models
not very different from O2 (though packaged differently). However, I found
exactly what I was looking for when I landed on Sparhandy.de. This is a website
which offers different smartphones bundled with plans from different network
providers like O2, Telecom, Vodafone and E-plus etc. The concept is simple, a
customer is asked to select a phone and a data-plan from a provider. However
following things were as I expected them to be in the first place:
- Phones were being offered at different prices from various network providers (like O2, Telekom etc.)
- Most importantly, say with a provider like O2, the price of the phone was dependent upon a selected data and voice plan. In short, higher the monthly plan cheaper was the phone to buy.
Simple mathematics convinced me that O2’s new
sales model is charging a higher price from customers buying phones directly
from its website. To clarify, I have shown here my analysis about 4 phones from
different companies (Motorola, Apple, Samsung and Sony) with identical mobile
contracts offered on both the websites. I suggest you to look at the graphic
attached and see the amount one can save in a typical 24 month contract period.
The saving potential is huge on the latest phones like Sony Experia T where savings
can be as high as 28% or 300€.
All figures indicated in Euros and rounded
to nearest integer
Price for different phones keeps changing on
both o2online.de and sparhandy.de.
Prices shown were taken on 5th
Feb 2013
Idea is to highlight the difference in the
handset price being offered for the same contract on both these websites and
that becomes the main cost saver for a customer
The price difference comes because Sparhandy
offers the customer a handset price dependent upon the selected data and voice
plan. This is a consistent observation for phones and tablets of all the brands.
I highly recommend the readers to check the website for them to see the
difference (even for different network providers).
By being a bit inquisitive I made an O2 phone contract through Sparhandy and saved a decent sum of money. Following things might also interest certain readers:
- Sparhandy also offers contract extension possibilities which are again much cheaper than the original provider’s website (for O2, Telekom and some other providers).
- Some of the smart phones like Samsung DUOS S7562 (dual-sim, running Android 4.0, GPS and 5MP camera) are available for 1€ phone cost with a 10 Euro per month data plan on Sparhandy. Such phones are not at all being offered on the O2 website.
Be Smart and Go Mobile and yes this post is not sponsored by Sparhandy!
