1000%+ markup

nafanny29 · 09/02/07 - 12:12

A friend of mine who works for T-Mobile says its costs them under 1p a month to keep someone connected to the network. Texts cost them virtually nothing and calls between T-Mobile - T-Moblie and T-Mobile - landlines also nothing.

X-Network are a slight cost due to termination charges.

Basically he was saying that every text, picture message, roaming call and other add-ons is nearly 100% profit for T-Mobile. Thats why they give away SIM cards all the time.

Interesting conversation and shows how easy it is to make a profit for them.

psionic · 09/02/07 - 18:58

Sounds like back of a **** packet accounting there. What about the investment in the equipment, the instalation costs, legal costs, running costs, buildings, utilities, staff salaries etc. etc.

I'm sure they do make a healthy profit however, or they would not bother. But the figures mentioned sound a bit dubious.

[Deleted User] · 09/02/07 - 19:15

nafanny29 wrote:

A friend of mine who works for T-Mobile says its costs them under 1p a month to keep someone connected to the network. Texts cost them virtually nothing and calls between T-Mobile - T-Moblie and T-Mobile - landlines also nothing.

I work for Tmobile - and that's rubbish.

intheknow · 09/02/07 - 20:39

Complete crap.

First they have to bid for mobile licences which set them back huge amounts and start the company with debts.

Provide support staff, engineers, call centres, infrastructure, pay Arqiva to link all the masts into a massive network, wireless links between masts, planning permissions and building sites costs huge amounts, engineers and maintainance, all the business services and accounting, management, cost of sales, shops, marketing, massive advertising contracts, buy a handset for every customer, offset the cost of non payers / bad debts, investment in new technology to keep up with competition etc etc...

They are talking out of their **** !!

nafanny29 · 10/02/07 - 12:40

I will challenge him on the above next time I see him. Never thought about all the above.

Interesting stuff guys, thanks for the comments.

prking · 10/02/07 - 18:28

I saw some figures for SMS about a year ago on the news. Average cost to the network was 1.9p (same network) or 4p (other network).
When you add in other costs you can see the networks making a more reasonable percentage profit.

[Deleted User] · 10/02/07 - 18:41

possible the actual cost of sending the msg or the call duration cost nothing but in order to have that facility you have to buy a licence off the govt and then set up the infrastructure which costs millions each year. and also subsidise the phones.... they have to make money somehow!

[Deleted User] · 10/02/07 - 19:47

Deutshe Telecom, are made of money!!
The call centre I work at alone employs about 700-800 people, and thats one of 3 main ones, then theres staff salarys, overheads etc! Made of money!!

kev · 11/02/07 - 09:44

dangermouse1986 wrote:

Deutshe Telecom, are made of money!!
The call centre I work at alone employs about 700-800 people, and thats one of 3 main ones, then theres staff salarys, overheads etc! Made of money!!

And long may it stay that way - sometimes you have to wonder if T-Mobile have heard of call queuing systems as they don't appear to have one :cool:

flagpole · 11/02/07 - 11:15

I think you need to understand the difference between fixed and variable costs.

It may cost them on the margin very little to connect new customers. but the do have to build a mobile phone network.

incidentally 1000% markup on 1p is 11p

intheknow · 11/02/07 - 14:25

It's like you often hear carbonated drinks only cost a couple of pence to dispense, that's true, but when you think about the electricity, the premises, the staff, the heating, the advertising to get the customer in, the rent / rates, the paper cups, the repairs / maintainance and upkeep, payroll and staff, the VAT they pay for you, the tax they pay etc... . When you work out the true cost of serving you that drink factoring in all the associated costs of running the operation you may find they are making 5-10% profit, hence the true cost of that 1 pound (retail price) drink is not 2p, but 92p.

[Deleted User] · 11/02/07 - 17:01

kev wrote:

And long may it stay that way - sometimes you have to wonder if T-Mobile have heard of call queuing systems as they don't appear to have one :cool:

Believe me they have one, along with their god awful "Just another diamond day" and "when the night feels my song" hold music!

kev · 11/02/07 - 17:46

dangermouse1986 wrote:

Believe me they have one, along with their god awful "Just another diamond day" and "when the night feels my song" hold music!

Ah, I forgot about the Diamond Day one - I had the misfortune of needed to call the week Flext was launched - oooops, talk about understaffed! Unlike Orange it does seem to be a rare event though

[Deleted User] · 11/02/07 - 18:13

kev wrote:

Ah, I forgot about the Diamond Day one - I had the misfortune of needed to call the week Flext was launched - oooops, talk about understaffed! Unlike Orange it does seem to be a rare event though

Well understaffed then as the didnt predict the popularity of it!

I owe my job to Flext!! Its much better now though, actually I cant comment I dont speak to customers directly only dealers and stores!

Hey there!

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