3 Mobile: give up the iPhones!
Well. I am plum tuckered out. I’ve just spent a gruelling couple of days successfully convincing 3 Mobile in Australia to let me have an iPhone contract. As a basic negotiation between two parties I find getting a home loan or attaining UK citizenship to be easier.
As I have just moved back to Australia from the UK with my partner and baby daughter, don’t yet have a job, and am staying with my parents, I fail 3 Mobile’s hilariously stringent credit policy. (although my partner, strangely, doesn’t, by virtue of the fact that as a woman she can claim the legitimate occupation of ‘housewife’). In a protracted series of conversations, I was forced to prove I had enough cash to pay a 2 year contract outright approximately 40 times over. The credit department said ‘meh’ and offered me a Nokia 2730 instead, claiming I couldn’t necessarily be trusted with a ‘high end’ iPhone. Eventually they relented after I pointed out the stupidity of approving my partner for the same phone, despite us sharing bank accounts.
I get that there are genuine credit risks out there. People who will likely default and cost 3 money, and I don’t blame them for trying to weed such people out. But by spending a couple of minutes looking at my particulars, any bank manager could see I’m not a huge credit risk. If I can’t get approval with 3, there must be many more people in the same boat – I imagine younger people with casual/part-time jobs would struggle, and would also be very likely to want one. What do 3 Mobile get out of denying them contracts?
For starters, iPhone users are valuable customers for a carrier. They spend more on voice and data, are willing to be tied to long/expensive contracts, and also spend more on content (this is potentially good for 3 Mobile Australia which has invested a lot in some great content).
I get that for carriers, selling iPhones probably runs a thinner margin. Some reports have suggested that iPhones aren’t profitable for carriers, although I and others find that hard to believe. While I’m sure carriers make an initial loss (and Apple make a bomb), over the life of the contract I’m sure they can turn that into handsome profit.
But even so, if the iPhone makes a loss it’s a very strong loss leader. Everyone wants an iPhone – it is by far the most desirable mobile phone on the market. If you don’t scoop those people up, they’ll go somewhere else. If your credit policies are making it difficult to turn customers into more valuable iPhone users, I wouldn’t exactly throw contracts at people, but I would think seriously about refining my policies. Find a way to put iPhones into the hands of part-time workers and 19 year olds. Pre-paid, contract, something else entirely, maybe something – golly – innovative (a first for the Australian consumer telecoms industry). Just find a way to make it work, because if you don’t, you’ll lose in the end.
