Phones 4u slips into administration after EE cuts ties with Brit mobe retailer Phones 4u fell into administration late on Sunday, after carrier EE cut its ties with the UK retailer. The company said in a statement that's EE's "unexpected" decision not to renew its contract with Phones 4u meant the High Street business would be without any mobile network partners. EE's withdrawal from that deal, which …
There is a class of middle-men (Carphone Warehouse, Phones 4U, Buymobiles etc) that exist between the mobile networks and many of their customers. These retailers are very expensive for the mobile networks, the networks have always resented their existence and have always thought that the profits being made by these people are rightfully theirs. The trouble is that many customers keep using the third party retailers rather than the mobile networks own direct sales businesses. This is because of the astounding level of incompetence of the networks' own in-house retail businesses. The networks are unaware of the level of their own incompetence at retail, which has made this very hard for them to fix. (Phones 4 U are pretty awful themselves, so their continued existence kind of baffles me, but they and the other third party retailers are providing *something* that the networks themselves are not).
It has always been inevitable that the networks would at some point squeeze out the third party retailers by simply refusing to do business with them. This explains Carphone Warehouse's attempts over the last few years to transform itself into a general consumer electronics retail business, variously by stocking other products in its shops (remember when they were full of laptops?), doing an ultimately disastrous deal with Best Buy, and ultimately through a merger with Dixons/Currys/PC World. I am not sure that this means better service for customers - in fact I am pretty sure it means worse - but that's where we are.
"People also seem to want some advice as to which network and contract to choose from someone they think is a bit independent, though the level of advice from these establishments is pretty poor."
Indeed, that would be quite a nice service. Something like a price comparison website, which already exist in this space :-)
Problem with Phones 4u etc is that they were basically a reseller instead of a referrer. Always struck me as a strange business model to still have today - you wouldn't go into a shop to buy an energy or bank account.
Absolutely. This is the last hurrah of the original licensing and regulation back in the 80's when the networks were split from service provision the end users. This led to a whole raft of independents which did very well while it lasted. When the regulations were changed in the mid 90's all of the independents were essentially doomed. The networks brought the service providers back in house and made it the primary route to market (Vodafone/Vodac for instance). You only have to look at the number of network owned retail outlets vs the independents to realise that the writing is on the wall.
The trouble is that many customers keep using the third party retailers rather than the mobile networks own direct sales businesses. This is because of the astounding level of incompetence of the networks' own in-house retail businesses. The networks are unaware of the level of their own incompetence at retail, which has made this very hard for them to fix.
As alluded to by others, you need help to identify the right package for you because the companies have always actively worked to avoid clear like-for-like comparisons, a tactic that started when BT was forced into a duopoly with Mercury. The mobile companies have simply adopted these tactics because they were allowed to get away with it (and still are). This confusion is what forms the lifeblood of the resellers.
If the EU wanted to make a difference on the telco front, all it needs to do is somehow force honest comparison, because only then you'd get honest competition that benefits the user.
If the EU wanted to make a difference on the telco front, all it needs to do is somehow force honest comparison, because only then you'd get honest competition that benefits the user.
Arrgghhh no!
It would be like that totally pointless "MPG on the EU cycle" figure that car manufacturers have to publish, even though it bears no relation to real-life usage.
We do not need more political interference in helping us choose things. If there is a need, the market will fill it. When Phones4U started the high street was the place to find such info, taking commission from the suppliers, now the web provides it, funded by advertising from the suppliers.
"It would be like that totally pointless "MPG on the EU cycle" figure that car manufacturers have to publish, even though it bears no relation to real-life usage."
It doesn't matter that it bears no relation to real-life usage. What it does do is provide a comparison between two different makes/models, using one standardised baseline, so comparisons can be made.
Just like NCAP stars, 0-60 times, etc. they're just numbers to compare one to another to see which is "best".
Phones4U and the equally revolting Carphone Warehouse at least sell unlocked handsets - the networks want locked handsets so they can 1) install their own rancid bloatware and 2) have a slice of all your international calls when you can't just swap SIMs. It's why no bugger sells dual-SIM phones in this country when they're hugely popular the world over.
Yes, although the systems for cars could be gamed by the manufacturers such that performance cars (like one I had) had noticeable dips in the power curves at 56mph and 70mph in order to save fuel for the tests.
Hence the 'super' chip replacement industry which gave you back the curve that should have been there (and often added boosts your engine or the environment wouldn't appreciate).
Still, I get that they can learn and produce something like 'urban cycle' that is harder to obfuscate.
Personally, seeing various plans of calls/text/data/period/cost seem fairly obvious to me. Firstly, one is choosing an amount of money that one would spend at the most. For instance, I noticed that there is a new iPhone due and Phones4U sent me an email saying I could get the cheap one free for only 50 pounds a month or so over two years.
Well, since I was paying 8 pounds a month (7 now) for not-too-much-data/lotsa-texts/nuff-calls, with a phone that is premium but cost about 12/month for 2 years all the same, I figured the extra 30/month was overpriced for losing wireless charging and getting a less good camera etc.
However, comparing 7/month for 200mins/unlimited/500MB against a special-for-me 8/month for 600mins/600/600MB was easy. It is based on the fact that I would likely never run out of calls, even at 200 mins but could use 600 texts in a bad month (I have teenage children and a gf so it can be serious). The minimal data is ok for me because I have built-in maps and utilise WiFi a lot (and because I don't watch much video, especially when not at home).
These considerations are basically common-sense, in that everyone can reasonably make those choices. I actually switched because EE suddenly decided to break their data network and give me nothing or pitiful data connections for weeks on end without fixing it despite a dozen attempts (yes, I put the SIM in another phone, YES I have restarted my phone, YES, I DID clear my cache - for 2 months, unbelievable), it wasn't for the 1/month.
The guy I know who says "Oh, I pay 31/month but I get huge/huge/infinite" is just deciding that paying 12/month extra removes (some) worry about exceeding limits or not having data etc. To me 12/month pays for my TV licence or half my broadband, it is real money as far as I am concerned.
It doesn't matter that it bears no relation to real-life usage. What it does do is provide a comparison between two different makes/models, using one standardised baseline, so comparisons can be made.
But the comparisons are meaningless, because the baseline is unrealistic, and the manufacturers distort the ECU map so much to score highly that it damages the car's performance in real conditions.
What you get are "official" figures that show that Car A does 50 mpg on the test, Car B does 45mpg. In real life Car A does 37mpg, and car B does 39 mpg in average conditions, and when you get them remapped by a professional tuner they both go up to 45mpg (but would then fare worse on the EU tests).
How has the standard comparison been of any use whatsoever? All it shows is that manufacturer of Car A is better at fine-tuning the ECU map to optimise the engine for an imaginary journey, but at the expense of poorer figures in other circumstances. The ony place to get meaningful comparisons is from the car magazines and web sites who use the car in real conditions for several weeks or months.
That's all very accurate but rather irrelevant to what is happening, as according to the article, they merely swapping one middle man for another.
Little as I like to see 5 thousand people jobless just because the networks figured out they can boost their profits by few millions by changing contractors, fact is, they are in no way obliged to continue any sort of commercial relationship with anyone beyond the contractual terms. It's a risk, any middle man/company takes when tying themselves exclusively to certain type of business.
I can only hope, this isn't a cheap but effective attempt to sink the market value of Phones4U before approaching with a buy out offer tailored to the buyers needs only to then emerge as a saviour ;)
Though frankly, nothing will surprise me anymore.
It's ironic that they tried to sell you Voda when Voda were first in with the knife.
My high street, and yours probably, is mainly phone shops, estate agents and card shops. All three types of business are barely required to exist let alone proliferate. Charity shops proliferate too but that is because we are so busy creating an larger and larger underclass that we need more shops like them (and the pound/99p shops obviously).
In terms of efficiency and thus ultimately lower prices, a 3rd party shop or two would be better (we have Three, EE, Voda and O2 I think) but I take the point that the EEs and Vodas would rather run a chain of shops with fewer sales and take all the money, although shops look expensive to own and operate I presume they did some sums.
Personally, I used Phones4U when forced to by wanting a Nokia 920 so badly. One visit, paid full price, never returned - not a terrible hardship.
I must admit to wondering why people really do need phone shops at all, even when they are not technical types. Reading reviews, word-of-mouth etc. should really be sufficient. In the event that you hate the phone, you can just return it after all, two weeks ownership is plenty if 30 minutes in a shop is plenty.
"That and the fact they pay a much lower business rate than a "standard" business, gives them a competitive advantage."
Not forgetting tax breaks, cheap (often free) labour and usually free stock. It's no wonder there are so many charity shops and personally I've stopped donating/shopping with them all as other retailers cannot compete with those terms and it's driving local shops out of business.
In reality, it's probably more than that. If the £100m is a net profit, then the real profit (or more specifically money the networks could save) is more since the net would include the huge overheads they'd have.
Only the foolish would believe networks wouldn't dispose of the "partners" once they've achieved critical mass.
> "A good company making profits of over £100m, employing thousands of decent people has been forced into administration."
There is something rather fishy about this statement. If they were making that much profit then it may be true that they are being forced into an orderly winding-up of the business but being forced into administration means they've made a loss and there are creditors looming.
"There is something rather fishy about this statement. If they were making that much profit then it may be true that they are being forced into an orderly winding-up of the business but being forced into administration means they've made a loss and there are creditors looming"
I suspect it's more to do with hurting their former partners' businesses publicly and as much as possible. There's nothing for them to gain in simply bending over and quietly taking a rodgering. If it's happening anyway, may as well burn those bridges and try to lose EE and Voda some customers in the process.
That's how I'd play it at this juncture, anyway.
Other reports suggest that Phones4u was owned by a bunch of hedgies. Those vultures (no, not you, Reg!) issued bonds for a lot of money, took the money for themselves, and left the company to repay the bonds out of future earnings. The interest payments on those bonds killed the company.
I hope it is because of how awful they are to deal with.
(And how it is the company policy to waste as much of the customers time as possible by the way the systems are designed).
Before they do any of the messing around only they seem to need to do they should check the price.
The sales tactics are incredibly obnoxious.
They once refused to sell me something they had advertised on the window for a set price took about half an hour messing about and said the price had changed right at the end. (I just walked out and paid £20 more from Carphone Warehouse about 20m away and spent only 5 mins doing so).
They once refused to sell me something they had advertised on the window for a set price took about half an hour messing about
I admire your patience. In such shops you're lucky if I last more than 5 minutes, and I have an extremely low tolerance for BS. Generally, I indicate that at the very beginning - the right salesman than stays with my needs, the idiots still try the upsell and lose the business.
I made the mistake of wandering into one of their branches several years ago to try and buy an unlocked handset. The sales slug couldn't believe somebody could be so demented as to want such a thing and pulled in a second sales slug to help teach me the error of my ways and to show me the contract I actually wanted (never mind the fact I had asked for something specific that the shop allegedly had for sale). After a couple of minutes of obnoxious high-pressure sales pitch I thanked them for their time and walked out but I can see how some people fall for it.
Carphone Warehouse were angels by comparison, at least they would sell you an unlocked phone without arguing and the larger branches had powered-up models you could play with so that expensive purchase was less of a pig in a poke. I say "were" because, well, you know who owns them now...
That will be another empty shop in the high street.
The big players will carve up the worthwhile shops out of the 550 and then ditch the rest.
Sad times for Phones4U employees. Although I have to admit the writing was on the wall because I wasn't exactly sure how they continued to exist when all the big players sold directly to the public.
"In line with our strategy to focus on growth in our direct channels"
So, they're openly saying its to take the business themselves. I've always wondered how places like Phones 4U survived and where the profits came from, but the whole thing seems anti-competetive (I don't know if it would class as that though because I guess you vould class them as parasitic rather than competitors in a way). I also think that if the customers want to go to Phones 4U then they should be able to. This move is only good for EE. Certainly not for the customers or for the staff at Phones 4U.
I know that Phones 4U had a pretty horrible reputation at one time but I bought my last phone from them (and so did my dad) and they had completely turned that around. The customer service was excellent.
The customer service at EE on the other hand is shocking. The stores and 'customer service' centres alike are useless.
If I could make a suggestion to Phones 4U it would be this. I've recently fallen out with EE over the length of time it took them to approve the Cyan update for my Lumia, and I know Android owners in the same boat. I'm in the market for a SIM free, unlocked phone that gets updates directly from the manufacturer. Many places on the web are touting the benefits of buying a device outright and getting a SIM only deal from the network - maybe use some of that cash they have in the bank to get such stock in, see if they can operate that kind of model. Like Clove, but where you can go in, try the handsets, compare the size and get advice from someone in person. I'd go there and, if they gave me the same service as they did the last time I was there, I'd go back afterwards too.
There must be a market for that and if not, I'm sure one could be cultivated.
You could get an iPhone from Apple, John Lewis etc. Unlocked and sim free.
You get the updates from Apple and there is no carrier bloat.
Yes, I know this is heresy but the poster asked a question...
There are some Android equivalents that others will be sure to mention.
don't buy your phone from a carrier. go for SIM Only deals on say a 1 month rolling contract. Then when the carrier pisses you off, you can move to another without the unlocking hassle.
don't buy your phone from a carrier. go for SIM Only deals on say a 1 month rolling contract. Then when the carrier pisses you off, you can move to another without the unlocking hassle.
Not to mention that its also WAY cheaper in the long run as well. Sure you have to have the outlay for your Phone first though. But, what an iTard Contract go for these Days? £50, £75 a Month? Try working out what that is after Two Years!
Try working out what that is after Two Years!
£50PM = £12000
£75PM = £18000
Wow, that was easier than I thought, and I did it without a calculator.
Of course your idea of how much a contact costs is way off the mark, but don't let facts get in the way of your posting.
There are Android contracts at similar prices to iPhone ones.
for example
Vodafone 3g contract
Samsung S5 black £44.50/month Free phone,24 month 4Gb Data on 3G
apple iPhone 6 £48.00/month free phone, 24 months 4Gb data on 3G.
Not so different really.
It's still £84, which isn't a trivial amount, and whilst the point about iOS updates is fair enough, I prefer Android for it's much greater flexibility, better hardware functionality etc etc.
I can't be bothered getting into the wider iOS v Android v WinPhone debate here, but a blase comment about one of the few benefits of iOS is largely irrelevant when most people will base their decisions on other things.
I myself buy my phones outright and then have a very cheap rolling monthly contract, and the amount I get for my old phone always covers the bulk of the cost of the replacement.
I dropped EE recently, and bought a 32GB Nexus 5 direct from Google's play store, and switched to Giffgaff.
I went from about £37 a month, to £12 a month (plus the initial £339 for the phone), for essentially the same service. (Speeds are actually faster, especially uploads on 3G).
Now I get the most recent updates directly OTA, usually within a few days of the release date.
Can't see me ever going back to a branded phone again, although I will probably move from service provider to service provider as needed, keep em on their toes...
Android Silver also looks interesting for future phones and tablets, although Google have stated the Nexus range will continue as well.
> apple iPhone 6 £48.00/month free phone, 24 months 4Gb data on 3G.
Except that is for a 16GB model, almost unusably small considering there is no data card.
Since the next size is 64GB, the price moves to £53 on one I saw.
53 vs 44 is, in fact, quite a big difference, about 20% more.
And, the S5 is over-priced, there really are phones as good or better depending on your view, for much less money.
RipOff Britain, I say ... Who in their right mind pays over € 20/month for unlimited sms/calls and 20Gb/LTE ? (without handset).
That is what I pay (actually, I pay € 16, coz I have DSL from same vendor), so I was happy to shell out full retail price for my BB10 z30, directly from manufacturer so I get updates quicker, no provider crapware.
R E V O L U T I O N
'I'm in the market for a SIM free, unlocked phone that gets updates directly from the manufacturer.'
You've not heard about the iPhone then?
You can even buy then Sim free is you want.
I buy the phone, yes it is expensive but I change the phone every year, selling the old one which has superb resale value. I get at least 60% of the original outlay back especially as the phone is looked after and in nearly new condition.
The Sim only deal I have costs me less than £250 a year.
No having to wait two years to upgrade and all updates are on time and free. Add the cost of the phone into the equation I save a fair bit of money in the long term.
Android phones don't have that sort of second hand value
If you switch off your reality distortion field for a moment you would find that most top end android phones also keep their resale value.
Given that I probably spend half as much money for my similarly-speced phone than you, and can get a decent sim-only deal that gives me unlimited calls and data fro less than half what you pay, then I would say you are not saving as much money as you believe.
Not sure this accords with basic economics
You are saying that iPhone users replace their phones more regularly. This implies that there are lots of "last year's phones" around. At least some of these must make their way into the second hand channel (rather than sitting in the back of a draw), so there should be lots of second hand phones. If there is a big supply of 2nd hand iPhones then basic economics would suggest that this should depress the price.
On the other hand you are saying that Android users don't care about having the latest model, they just want to use a phone. Therefore they should be more likely to want to buy last year's Samsung, thus increasing the demand for used Android phones and raising the price.
Thus your argument that iPhone users are fashion victims desperate to replace their phones the instant a new model comes out would suggest a world when the world was awash with second hand iphones at bargain prices, while canny and thrifty Android users were having to pay through the nose for those rare-as-rocking-horse-sh1t second hand Sammys
I don't think this is where we're at.
I would suggest that the 2nd hand price for Apple kit holds up well because
a) they are very well made
b) there only a small number of models so apple can continue to support them all
c) the latest version of iOS is available on all models released in the last 4 years or so.
Not sure I would want a 2 year android phone that the manufacturer has long forgotten about with no chance of a software upgrade ever again.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
