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1) Those MVNOs buy in bulk. If you were prepared to pay in bulk, you'd get a discount. It's the same reason your supermarket sells Heinz Beans cheaper than your corner store. As for the out of bundle costs, if you take 600 mins @ £25pm, the cost is ~4ppm (plus you get the texts). Once you're out of the wholesale rate - you're back to paying retail.
2) In actual fact, it's cheaper on Vodafone Prepay* to ring China and Poland than it is to ring your local Chinese takeaway or Polish deli - http://www.vodafone.co.uk/international - 5ppm to landlines in Croatia, Czech Republic, Hungary, Poland, Romania, Lithuania, Latvia, Slovakia, Thailand, Turkey, China, Hong Kong, Russia, Nigeria, India, Pakistan. Why? Two reasons
i) It's genuinely cheaper to call those countries. You'll notice that most of the places are places where your pound/euro buys a lot. It's cheaper to buy a can of Pepsi there. Whereas the UK has high termination rates, these countries' rates are cheaper.
ii) Capitalist Supply and Demand. There are lots of Poles, Pakistanis, Slovakians etc in this country and they all want to ring home. They don't have the ability to pay BT's 50ppm (or whatever it is). So, supply and demand.
So, if you want a price war - move to the cheap MVNOs. Play the supply and demand game. However, it's cheaper and easier for networks to sell wholesale to MVNOs than it is to deal with you directly. That way leads us back to the market conditions of the late 1990s.
T
*Other providers are available :-)
(Not speaking for my corporate masters - Vodafone)
1) I fully understand your point, I get it to a certain extent. However ASDA announced it was reducing prices at the same time Voda was increasing them. That is what is annoys me a hell of a lot.
2) Yeah I take your point on termination rates but it still just shows up how odd the market in the UK here in the that it is cheaper to call abroad then it is within your own country. It would be great if some of the readers could comment how it it works in their own countries!
I definatly want a price war, I think if any of the MVNO's can make a difference it is Asda, I don't think Ikea have distribution power and brand power. Only time will tell but I hope people will ditch the traditional MNO and switch to the MVNO's. The mainstream press are picking this up and with sites like Money Saving Expert highlighting no real difference between Voda and Asda ie they will get the same signal, just a different CS and with the current credit crunch people are looking to reduce costs. There is little reason for them to switch.