German MVNO to undercut T-Mobile with 600 euro iPhone rebate

Posted:
in iPhone edited January 2014
German mobile virtual network operator (MVNO) Debitel said Tuesday it plans to offer a 600 euro ($891) rebate to customers who buy an iPhone from T-Mobile Germany but agree to use its wireless service instead, undermining much of T-Mobile's competitive advantage.



Reuters reports that Debitel -- which resells airtime it buys from T-Mobile and rivals Vodafone, O2, and E-Plus in Germany -- said it has no qualms about paying the difference in price between an unlocked iPhone and one locked to T-Mobile's network if it means gaining new subscribers.



Although T-Mobile had landed an exclusive deal with Apple to sell the iPhone in Germany, it was ordered by a Hamburg court last week to offer customers an option to buy an unlocked version of the handset that would not require a formal two-year contract and could be used other wireless networks in the country.



T-Mobile and Apple agreed to comply, but did so by pricing the unlocked iPhone at a whopping 999 euros in order to deter consumers from forgoing a T-Mobile contract. The two firms charge less than half that -- 399 euros -- for an iPhone tethered to the T-Mobile network.



In a statement, Debitel said it would begin offering through its stores on Wednesday iPhone contracts starting at 40 euros per month for 200 minutes, which is cheaper than T-Mobile's baseline plan of 49 euros for half as many minutes.



"We are happy to offer iPhone buyers the freedom of choice that customers are entitled to expect from a service provider," said Oliver Steil, Debitel's marketing chief.



Debitel added that customers using Vodafone, E-Plus and O2 networks would get all of Apple's iPhone services apart from visual voicemail which will continue to function only on T-Mobile's network.
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Comments

  • Reply 1 of 29
    Quote:
    Originally Posted by AppleInsider View Post


    German mobile virtual network operator (MVNO) Debitel said Tuesday it plans to offer a 600 euro ($891) rebate to customers who buy an iPhone from T-Mobile Germany but agree to use its wireless service instead, undermining much of T-Mobile's competitive advantage.



    Reuters reports that Debitel -- which resells airtime it buys from T-Mobile and rivals Vodafone, O2, and E-Plus in Germany -- said it has no qualms about paying the difference in price between an unlocked iPhone and one locked to T-Mobile's network if it means gaining new subscribers.



    Although T-Mobile had landed an exclusive deal with Apple to sell the iPhone in Germany, it was ordered by a Hamburg court last week to offer customers an option to buy an unlocked version of the handset that would not require a formal two-year contract and could be used other wireless networks in the country.



    T-Mobile and Apple agreed to comply, but did so by pricing the unlocked iPhone at a whopping 999 euros in order to deter consumers from forgoing a T-Mobile contract. The two firms charge less than half that -- 399 euros -- for an iPhone tethered to the T-Mobile network.



    In a statement, Debitel said it would begin offering through its stores on Wednesday iPhone contracts starting at 40 euros per month for 200 minutes, which is cheaper than T-Mobile's baseline plan of 49 euros for half as many minutes.



    "We are happy to offer iPhone buyers the freedom of choice that customers are entitled to expect from a service provider," said Oliver Steil, Debitel's marketing chief.



    Debitel added that customers using Vodafone, E-Plus and O2 networks would get all of Apple's iPhone services apart from visual voicemail which will continue to function only on T-Mobile's network.







    Hmmm, first post maybe...



    40 Euros for 200 minutes beating T-Mobiles 49 Euros for half the minutes, all for gaining a new subscriber by paying $891.00 US Dollars to get them in the first place - sounds like a winner - what kind of commitment do these new subscribers need to make so

    Debitel can recoup their money? What about other services data, visual voicemail, etc.?



    Sound Business Plan on Debitel's behalf!



    Wonder if T-Mobile will match rebate or sue for loss of revunue?
  • Reply 2 of 29
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Rot'nApple View Post


    Hmmm, first post maybe...



    40 Euros for 200 minutes beating T-Mobiles 49 Euros for half the minutes, all for gaining a new subscriber by paying $891.00 US Dollars to get them in the first place - sounds like a winner - what kind of commitment do these new subscribers need to make so

    Debitel can recoup their money? What about other services data, visual voicemail, etc.?



    Sound Business Plan on Debitel's behalf!



    Wonder if T-Mobile will match rebate or sue for loss of revunue?





    600 / 40 = 15



    That means that Debitel isn't making anything until after 15 months if no additional services are had. And Apple really makes out as they are now getting paid upfront for the iPhone and at an inflated rate.
  • Reply 3 of 29
    cameronjcameronj Posts: 2,357member
    Quote:
    Originally Posted by Rot'nApple View Post


    Hmmm, first post maybe...



    40 Euros for 200 minutes beating T-Mobiles 49 Euros for half the minutes, all for gaining a new subscriber by paying $891.00 US Dollars to get them in the first place - sounds like a winner - what kind of commitment do these new subscribers need to make so

    Debitel can recoup their money? What about other services data, visual voicemail, etc.?



    Sound Business Plan on Debitel's behalf!



    Wonder if T-Mobile will match rebate or sue for loss of revunue?



    Commitment! Ha!



    Seriously though, this is the reason why you let the free market take care of these problems instead of the idiot governments. Everyone wins. T-Mobile gets their cash, Apple gets whatever percentage of that 999 euro that was coming to it. Debitel gets a new customer (who will almost surely be a money loser for them). It's a perfect solution that no one should complain about.



    See how that differs from the other solutions out so far?
  • Reply 4 of 29
    bageljoeybageljoey Posts: 2,004member
    Quote:
    Originally Posted by AppleInsider View Post


    Debitel added that customers using Vodafone, E-Plus and O2 networks would get all of Apple's iPhone services apart from visual voicemail which will continue to function only on T-Mobile's network.



    Is visual voicemail something that the other carriers could implement on their own (if there were enough iPhone users in their network to make it worthwhile)? Or is it something they would have to work with Apple to provide?



    I assume that Apple has patent protection on phones with visual voicemail, but I don't know if that would extend to the wireless providers technology...
  • Reply 5 of 29
    brussellbrussell Posts: 9,812member
    Quote:
    Originally Posted by cameronj View Post


    Commitment! Ha!



    Seriously though, this is the reason why you let the free market take care of these problems instead of the idiot governments. Everyone wins. T-Mobile gets their cash, Apple gets whatever percentage of that 999 euro that was coming to it. Debitel gets a new customer (who will almost surely be a money loser for them). It's a perfect solution that no one should complain about.



    See how that differs from the other solutions out so far?



    Yeah, except that it was idiot government intervention that even allowed this to happen. Without it, we would have been stuck with t-mobile only. It seems to me this is a case of the government ensuring a free market.
  • Reply 6 of 29
    Quote:
    Originally Posted by BRussell View Post


    Yeah, except that it was idiot government intervention that even allowed this to happen. Without it, we would have been stuck with t-mobile only. It seems to me this is a case of the government ensuring a free market.



    exactly



    and Debitel is probably just investing in free publicity by the press... how many of you guys even knew they existed in the first place?
  • Reply 7 of 29
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by jpferreira View Post


    exactly



    and Debitel is probably just investing in free publicity by the press... how many of you guys even knew they existed in the first place?



    The Question to ask is: How many more Germans now know about Debitel?
  • Reply 8 of 29
    noirdesirnoirdesir Posts: 1,027member
    Quote:
    Originally Posted by jpferreira View Post


    exactly



    and Debitel is probably just investing in free publicity by the press... how many of you guys even knew they existed in the first place?



    If I had to name a virtual provider in Germany, I could only come up with Debitel (even before today). They might not be the biggest (I really don't know) but they have been one of the first and have been around since the beginning of GSM.
  • Reply 9 of 29
    Quote:
    Originally Posted by noirdesir View Post


    If I had to name a virtual provider in Germany, I could only come up with Debitel (even before today). They might not be the biggest (I really don't know) but they have been one of the first and have been around since the beginning of GSM.



    well, how's their market? how many subscribers? what are their present goals and future plans?



    and: how's the competition between a virtual provider and a regular(?) one? because they might use this kind of free publicity and great offerings (iphone rebate) to compensate for a lack of confidence in their network/service and/or a lack of better services in comparison with other competitors..



    i dunno, i'm just throwing some ideas here to see if we get what this apparently incredible offer from Debitel is really about...
  • Reply 10 of 29
    Quote:
    Originally Posted by BRussell View Post


    Yeah, except that it was idiot government intervention that even allowed this to happen. Without it, we would have been stuck with t-mobile only. It seems to me this is a case of the government ensuring a free market.



    The iPhone is not a market, it is a single device in a market. The actual German cell market has multiple service providers which offer dozens of choices of devices, and consumers are free to choose amongst any available combination offered.



    So please explain to me what this whining about exclusive service providers for a particular device has anything to do with the freedom of the market at large. A free market simply implies that buyers and sellers are free to trade goods, services and money through consensual agreement without force or coercion. Nobody is forcing Germans to buy an iPhone, but apparently they want to be able to force Apple to sell them one on their terms, and theirs alone. Fine, it's your country, you can do what you like. But don't misrepresent your intentions as being some noble protection of the "free market."
  • Reply 11 of 29
    Interesting tactic on Debitel's part. Good move.
  • Reply 12 of 29
    Quote:
    Originally Posted by AppleInsider View Post


    "We are happy to offer iPhone buyers the freedom of choice that customers are entitled to expect from a service provider," said Oliver Steil, Debitel's marketing chief.



    Just that only T-Mobile offers EDGE with a near national cover in Germany. W/o EDGE i rather get a iPod Touch or loose the will to live.



    Great stunt though.
  • Reply 13 of 29
    irelandireland Posts: 17,798member
    Haha!!
  • Reply 14 of 29
    noirdesirnoirdesir Posts: 1,027member
    Quote:
    Originally Posted by freelander51 View Post


    Just that only T-Mobile offers EDGE with a near national cover in Germany. W/o EDGE i rather get a iPod Touch or loose the will to live.



    Great stunt though.



    I am curious to see the details but as a virtual provider Debitel can in principle offer access to T-Mobile's EDGE network.
  • Reply 15 of 29
    As ususal, there is no official statement from Apple that they are charging the markup that T-Mobile levied on the iPhone in allowing it to be unlocked.



    There is no official statement from Apple about Debitel.



    We know that T-Mobile got the exclusive contract in Germany from Apple.



    We know that Debitel is willing to absorb that mark up to take market share from T-Mobile.



    What we assume is that original mark up went to Apple's bottom line.



    Apple had a contract for a specific set of circumstances with T-Mobile.



    T-Mobile has an injunction against it to release these phones as unlocked.



    T-Mobile knows the German law and after some research reached an unlocked tax to detour people from leaving T-Mobile.



    People proclaim Apple is raking in the money.



    Apple is making no more money than what they were making on the hardware from the original contract.



    The freedom tax T-Mobile levies on the device goes into T-Mobile's pockets as "lost long-term capital, amortized over the normal use terms of an initial contract, plus some extra fees", yet we keep reading about Apple making huge dividends on this law.



    They are only selling it exclusively through T-Mobile.



    If T-Mobile wants to be the broker between Apple and the German populace while enacting a large commission then T-Mobile knows it will have to increase the tax even more if it ever wants to grow it's user base with the iPhone as it's bait.



    Debitel can only do this cost lost for so long.



    Meanwhile, the courts will have to finally decide on this for Germany.



    Either way, Apple may not be making the sort of ROI that AT&T does for them because of US Laws not requiring unlocked phones, but they still make a decent margin for every phone sold and it gets OS X into the hands of more people who most likely have never used it until they bought this phone.



    Apple Wins over the mind share and grows it's install base with new customers purchasing their computers to work with these iPhones.



    The iPod Touch will only add to the bottom line installed base.



    If Apple can come out with a few more "must have" products in the consumer electronics space with OS X running the system it will have a gravitational effect on future computer sales to even more consumers.
  • Reply 16 of 29
    dreyfus2dreyfus2 Posts: 1,072member
    Quote:
    Originally Posted by jpferreira View Post


    exactly



    and Debitel is probably just investing in free publicity by the press... how many of you guys even knew they existed in the first place?



    Well, actually debitel has 13 million customers in Germany and is the biggest player. The move does make sense - because people can now combine all T-Mobile tariff options freely (e.g. lot of talk time and little data, even domestic flatrates for people talking a lot), something T-Mobile itself does not allow.
  • Reply 17 of 29
    Quote:
    Originally Posted by Bageljoey View Post


    Is visual voicemail something that the other carriers could implement on their own (if there were enough iPhone users in their network to make it worthwhile)? Or is it something they would have to work with Apple to provide?



    I assume that Apple has patent protection on phones with visual voicemail, but I don't know if that would extend to the wireless providers technology...



    How long before other phones get visual voicemail?
  • Reply 18 of 29
    Quote:
    Originally Posted by Joe_the_dragon View Post


    How long before other phones get visual voicemail?



    My reaction is "who cares." Now that I have been using VVM, it seems like such an obvious and simple feature that it makes you wonder, "how come no one else thought of something similar before?" Apple did.



    That's a long-winded way of saying that Apple will be on to something else by the time that these mobile phone providers get to some type of VVM knockoff.
  • Reply 19 of 29
    Quote:
    Originally Posted by solipsism View Post


    600 / 40 = 15



    That means that Debitel isn't making anything until after 15 months if no additional services are had. And Apple really makes out as they are now getting paid upfront for the iPhone and at an inflated rate.



    If Debitel does not hand out cash to people, but offers the 600 euros in credit then wouldn't they make out well before 15 months since the money you're saving is different than the money it is costing them? Or maybe they don't come out even until after 15 months...



    Say that to provide you the service it costs them 15 euros a month and they charge 40. Giving you a 600 euro credit only actually costs them 225 euros, but that's what it costs over the 15 months. So it's another few months -- in this case 225/40 or 6 more months to begin making a profit on you.



    Then again, as others have said, they can probably get more out of folks for such things as:

    - More minutes

    - More data

    - More SMS Texts.



    In the above example they make 135 euros on you over two years. Probably not bad considering that they get some mindshare and that 135 would be the minimum -- well more if cost per month is less than 15, and well more again if people pay for more services beyond the 40 euro plan.
  • Reply 20 of 29
    dreyfus2dreyfus2 Posts: 1,072member
    Quote:
    Originally Posted by noirdesir View Post


    I am curious to see the details but as a virtual provider Debitel can in principle offer access to T-Mobile's EDGE network.



    Not only in principle - they DO offer access to the EDGE network. My T-Mobile contract is from debitel and I use EDGE all the time.
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