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Vodafone UK wouldn’t sell Steve a phone!

You can’t make it up, you really can’t.

Steve Rowlands walked into a Vodafone shop recently to buy an HTC Desire. He was still in his 24-month contract and thus expecting to be asked to fork out a lot of cash for the privilege of swapping to the Desire.

(By the way, Steve is another Symbian/Nokia fanatic who couldn’t be bothered waiting for Nokia to get their act together — that 24-month contract was for an N97)

Steve walked into the shop with his credit card ready. He didn’t really care what the deal was. He’d buy the phone PAYG or he’d extend/upgrade/change his contract. He was expecting the sales people to embrace him with a commercially astute spirit. He knew he was going to be charged the best part of £400 or so.

No.

That was the answer he received:

“We can’t do that Sir”.

“What? Not on PAYG?”

“Ok, I’ll give you lots of money to upgrade my contract early”.

“No sorry Sir, computer says no”.

“Right, last chance, you are a shop, have HTC Desire’s in your stock room, how much do I have to pay to get one? Not PAYG, not an upgrade, just cash for a box. Just beep it through the till, hammer my card, and I’ll walk away happy.”

“Sorry Sir, we don’t sell phones in that way”.

Ok I give up.

Since when did Vodafone stop selling phones?

I wonder if it was around the time they stopped actually helping existing customers in their stores. I remember walking into a Vodafone shop a little while ago to ask them to change around my price plans. I wanted to do a bit of price plan management since I was regularly blowing 500 quid a month.

No. They told me to phone up. As an existing customer, they could only help me if I wanted to do an upgrade.

It’s not all bad news though:

Instead, I had to go to the bunch of cowboys in the Carphone Warehouse over the road, and they promptly snatched the cash out of my wallet before I even knew they had any Desire’s in stock!

Anyway, I now have my HTC Desire, I just didn’t realise businesses would be so fussy over selling stuff in this troubled economic time.

Steve also points out that he got an unrelated phone call from a chap in a Vodafone call centre abroad who helped him out by moving him from the 500MB data plan to one of the iPhone data plans (1GB data) at no extra charge.

Nice. If data’s becoming an issue for you on Vodafone, you might want to ask them to move you to one of their iPhone plans.

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

14 replies on “Vodafone UK wouldn’t sell Steve a phone!”

This is getting grosser by the minute. Even in the UK, no less.

Someone needs to separate the device sales from the service sales. If you want to subsidize phones, just give us vouchers based on our service plans to use as credits for service, and let me decide what device to use and when to buy it. Geesh…

To be fair to the Voda bods in store, if a handset is in high demand on contract, as the Desire is, and the number of handsets in stock is low, then staff are strongly discouraged from selling a handset box only. Vodafone earn revenue by selling contract deals, and are not a SIM free retailer.

As for changing tariff in store, that's not what the stores are for. Retail sells, CS serves, so rightly all enquiries of this type are moved to CS. Voda pay millions of pounds in training and wages for service staff and sales staff. Retail bods don't want to get bogged down doing CS tasks, they want to do what they are employed for, and that's selling. Tariffs can be changed at point of upgrade, otherwise it isn't something that gets done in store.

I'm sorry Ewen, but you're being completely ignorant to the way the stores operate, they are unable to just 'sell' him the phone because there wouldn't be a price associated with it since it's only available on contract, even if there was a price when it scanned through the till, the store would be making a hardware loss on the handsets, and yes, the store is extremely limited in what they can do if he is still in his commitment period, unless he is eligible for an upgrade, there literally is NOTHING they can do, he could however have taken out an additional contract under the same account, surely people must remember that when they sign a contract that they are agreeing to the time that is stated, I think its a bit unfair to blame any store in a case like this

I've spent thousands of pounds in Vodafone stores buying handsets directly from them without contract. It seems they've really changed their policies.

Why doesn't Vodafone stick a huge big “NEW CUSTOMERS ONLY” sign on the top of every store then? I really think they should.

I used to really enjoy the fact I could manage my relationship with Vodafone in store, online and via phone.

I am a little surprised by this comment. A business that turns away people with money to spend has got its priorities all wrong. It costs a fortune to set up a shop with a well known brand and to get people with money to walk through the door – only to send them off to a competitor.

Don't you watch the Apprentice?

Especially when it's one of your existing customers wanting to give you more money. Without a subsidy. It would have arguably been more effective to have talked Steve into an extended contract. Or they could have given him the phone free on another £40/month contract. Or they could have reasoned that this was a customer who wanted a new phone and looked on their system and worked out the cost of just giving him the unit.

Instead he took his 400 quid and gave the money to Carphone Warehouse — a laughable outcome as you point out AJ. Steve now has an unlocked handset that he can use on any network so the moment he's out of contract, he'll be free to look around for a different provider. And after this weird and wonderful experience I suspect Steve may well be moved to give another provider a chance.

My dad had this issue a few months ago when trying to get an iPhone from Vodafone – as an existing customer they just weren't interested in taking his money.

Having said that, last time I asked some questions about my account at a 3 store they had to call up their Indian call centre to get any answers….

Retail fail.

Lets be clear here my beef is not with the individual stores, or their staff (which, incidently, seem to be the best on the high street), it is with the way Vodafone are putting seemingly ridiculous restrictions in place on their stores. How can a company in this day and age turn customers away? Tell me this is normal, and a good way to do business.

If you think that they are making a loss by selling me just a plain handset then someone has been spinning you a yarn. True that they will not make as much money as selling me a new contract, but £50 profit (for example) is better than no profit at all, no?

“but £50 profit (for example) is better than no profit at all, no” – actually no.

Because the stock market analysts don't care about total profit (unless it goes down). They care about margin. Unless the alternative is that the phone won't be sold at all (even in the future) if Steve walks out, you don't want to sell it at low margin. Because at the next phone conference at the quarterly financial statement, there will be a ton of questions about reduced margins, which translates into fear of reduced future earnings and earnings-to-capital ratios. The analysts will talk down the stock and your executive bonus and employee stocks plan will go down.

But what about the subsidize when going into a new contract, you ask? Well, that can either wind up as an “investment in growth” or be offset against estimated future high margin minutes sold to same customer. Although the Enron scandal made some of this shoddy accounting much harder to pull off.

Unfortunately the main priority of a business is to make a profit and they wouldn't be making much of a profit by purely selling the handsets without a contract, and alot of the hardware would be making a loss, the X10 for example is an extremely expensive handset for the stores to purchase from sony, hence why it will be a contract exclusive until they become cheaper to manufacturer and then it will be available on Pay as you go, the stores would be making a loss on P&L even if they did sell the handsets for a slight profit, without these restrictions in place for the stores the networks would suffer in the long term

You are wrong. Go back to Economics 101. Since when did margin become the key determinant in market valuations. If this were true my local corner shop would be worth more than Apple. This is such a fundamental misunderstanding of how the city works.

The point is that there is clearly a market for unlocked premium phones with high margins and that the networks choose to ignore that market even though there are also obvious cross-selling opportunities as Ewan pointed out.

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