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Tesco undercuts other UK operators with £20 iPhone monthly plan

post #1 of 29
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Tesco, the largest retail store in the U.K., has announced that its base plan for the iPhone will cost just £20 ($32.54) per month, which is a third lower than competing carriers.

Tesco Mobile is a joint venture between the retail chain, which is the U.K. equivalent of Walmart, and wireless provider O2. According to the Financial Times, customers will be able to purchase an iPhone 3G at a slightly higher £222 ($361) up-front price, but with a shorter term 12-month contract.

Carrier O2 does not offer a 12-month contract, and charges £34.26 ($55.74) per month for the iPhone with a two-year contract. At that price, users can get the iPhone 3G for free.

Tesco Mobile will also offer the iPhone 3G for free with a two-year contract, but its monthly plan adds up to £702 ($1,142.15) over the 24 month span, compared with a cost of £822 ($1,337.39) with competitor O2. While both companies share the same network, O2's costlier plan will give customers 600 minutes per month, and Tesco customers will get only half that.

Unlimited calling with Tesco will run £60 ($97.62) per month with a 24-month contract. The Financial Times also noted the iPhone 3GS will cost £320 ($520.64), though it did not note whether that was the 16GB or 32GB capacity.

In November, Tesco announced they would provide the iPhone 3G and iPhone 3GS at Tesco Phone Shops in the U.K. Though products are branded Tesco Mobile, they rely on the O2 network.

The deal has been compared to Apple's introduction of the iPhone at Walmart in the U.S. The world's largest retailer began selling Apple's phone 18 months after it first debuted.

In the U.K., O2 was the exclusive provider of the iPhone until September, when it was revealed that competitors Vodafone and Orange would also offer the device.
post #2 of 29
Quote:
Originally Posted by AppleInsider View Post

Tesco...the retail chain, which is the U.K. equivalent of Walmart.

The U.K. equivalent of Walmart would be ASDA, which is owned by...Walmart. I'm not suggesting that Tesco is Harrods, but it's no Walmart either. The Tesco Mobile phone shops which will stock the device are only found in the Tesco Extra stores, which don't quite have the same "Pile 'em high" vibe as your average Walmart.

It's only similar in that it's the largest.
post #3 of 29
Quote:
Originally Posted by AppleInsider View Post

Unlimited calling with Tesco will run £60 ($97.62) per month with a 24-month contract. The Financial Times also noted the iPhone 3GS will cost £320 ($520.64), though it did not note whether that was the 16GB or 32GB capacity.

£320 = 16GB with £20/month * 12 months, monthly limit £60 of calls & text
£407 = 32GB with £20/month * 12 months, monthly limit £60 of calls & text

16GB is for free when contracted for 24 months * £60/month, unlimited
32GB = £50 when contracted for 24 months * £60/month unlimited

P.S. BTW unlimited WiFi (Tesco's one I presume) is indeed interesting offer...

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post #4 of 29
Ha! That's more like it.

Tesco is not like Wallmart by the way.
post #5 of 29
So does this still mean you can't get it outright?

Where I am you can buy it outright from whoever you want (phone co's, Apple etc) and then pick a provider, and swap around phone companies *when* they annoy you. I wanted to buy one outright in UK, and it still seems that isn't on the list of options.
post #6 of 29
Huh! It's the first time iPhone is gonna be sold by MVNO, I believe.
Interesting experiment, too. (what may it change, though?)

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People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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post #7 of 29
Quote:
Originally Posted by stuffe View Post

The U.K. equivalent of Walmart would be ASDA, which is owned by...Walmart. I'm not suggesting that Tesco is Harrods, but it's no Walmart either. The Tesco Mobile phone shops which will stock the device are only found in the Tesco Extra stores, which don't quite have the same "Pile 'em high" vibe as your average Walmart.

It's only similar in that it's the largest.

Yeah, Tesco ranks slightly more middle-class than Asda.

I guess it goes: Lidl -> Morrisons -> Asda -> Somerfield -> Tesco -> Sainsburys -> Waitrose

(lower class to upper class). Wal*mart is equivalent to Asda, I don't know of other US supermarkets, but you can match them up yourself from the order above.

Asda stores are shocking. Cramped, tatty, selling tat.
post #8 of 29


To answer a couple of notes above, yes you can just buy it (not cheap tho) and the WIFI isn't tied to Tesco, but the standard O2 stuff.

I can't say it's any cheaper over the lifetime of a contract that anywhere else, given the higher entrance costs, but at least it's different, and for those who don't want a lengthy lock in etc it might be suitable.
post #9 of 29
Quote:
Originally Posted by stuffe View Post

I can't say it's any cheaper over the lifetime of a contract that anywhere else

It's chinese price, I dare say.
24 month contract: 24 * 60 = 1440 (£1440!)
12 month contract: 12 * 20 + 320 = 560 + calls/texts on flat rate

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People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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post #10 of 29
Quote:
Originally Posted by Hattig View Post

Yeah, Tesco ranks slightly more middle-class than Asda.

I guess it goes: Lidl -> Morrisons -> Asda -> Somerfield -> Tesco -> Sainsburys -> Waitrose

(lower class to upper class). Wal*mart is equivalent to Asda, I don't know of other US supermarkets, but you can match them up yourself from the order above.

Asda stores are shocking. Cramped, tatty, selling tat.

Yeah, i wouldn't compare tesco to walmart. At least from what I remember of tesco when I visited the UK, tesco is much more in line with Target here in the states. More of a middle- to upper-middle class demographic than walmart. Much more pleasant shopping experience as well.
post #11 of 29
Quote:
Originally Posted by Hattig View Post

Yeah, Tesco ranks slightly more middle-class than Asda.

I guess it goes: Lidl -> Morrisons -> Asda -> Somerfield -> Tesco -> Sainsburys -> Waitrose

(lower class to upper class). Wal*mart is equivalent to Asda, I don't know of other US supermarkets, but you can match them up yourself from the order above.

Asda stores are shocking. Cramped, tatty, selling tat.

I think it depends on the area, as many Asda stores are well above Somerfield ones (especially those former Kwik-Save ones that didn't receive any refresh ahead of the Co-Operative buy out).

I would personally place the pecking order as;
Aldi -> Lidl -> Spar (basic but expensive!) -> Co-Operative Food -> Somerfield -> Morrisons -> Asda -> Tesco -> Sainsburys -> M&S Food -> Waitrose -> John Lewis Foodhall -> Harrods Foodhall
post #12 of 29
This is why we need more competition in the US.

UK folks get such awesome mobile phone deals.
post #13 of 29
It would be nice if Apple dropped the handset price a bit by now. Given the shipments, surely they can get by with 25% margins and sell it at £280.

Concerning Tesco, their coverage should be the same as O2 so if the Tariffs are cheaper, it's an easy choice.
post #14 of 29
Quote:
Originally Posted by womble2k2 View Post

I think it depends on the area, as many Asda stores are well above Somerfield ones (especially those former Kwik-Save ones that didn't receive any refresh ahead of the Co-Operative buy out).

I would personally place the pecking order as;
Aldi -> Lidl -> Spar (basic but expensive!) -> Co-Operative Food -> Somerfield -> Morrisons -> Asda -> Tesco -> Sainsburys -> M&S Food -> Waitrose -> John Lewis Foodhall -> Harrods Foodhall

What about Fortnum and Mason old boy?
post #15 of 29
Quote:
Originally Posted by benice View Post

So does this still mean you can't get it outright?

Where I am you can buy it outright from whoever you want (phone co's, Apple etc) and then pick a provider, and swap around phone companies *when* they annoy you. I wanted to buy one outright in UK, and it still seems that isn't on the list of options.

It's possible (and always has been) to buy an iPhone off-contract (outright, unlocked, legal, no strings attached) in the UK. It's obviously expensive though:

http://www.expansys.com/d.aspx?i=183742

Michael.
post #16 of 29
Quote:
Originally Posted by Hedley Lamarr View Post

What about Fortnum and Mason old boy?

Or even *shudders* "Iceland" at the other end of the scale.

Anyway, i'm sh*t at maths. I'm on O2 on the £35 tariff, is the Tesco deal a good one?
post #17 of 29
Yeeehaaaaaa!! Oops sorry. That's fantastic news.

My contract is up on the 4th of January and i've already instructed O2 to unlock my iPhone.

I was going to wait until 4th gen iPhone in summer because i couldn't stomach being stuck on an 18th minimum contract when that comes out.

But 12mths...hmm sounds very tempting.
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post #18 of 29
this deal could factor me in! will have to wait on the word from the ubber geeks (probably stuff magazine) as to how this deal really weighs up
post #19 of 29
Quote:
Originally Posted by Hattig View Post

Yeah, Tesco ranks slightly more middle-class than Asda.

I guess it goes: Lidl -> Morrisons -> Asda -> Somerfield -> Tesco -> Sainsburys -> Waitrose

(lower class to upper class). Wal*mart is equivalent to Asda, I don't know of other US supermarkets, but you can match them up yourself from the order above.

Asda stores are shocking. Cramped, tatty, selling tat.

Eh?

Asda have some of the largest, modern and well stocked stores in the UK - what are you on about ?
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post #20 of 29
Well, the ones near me are large, one of them is very modern, and they are all well stocked....with cheap tat.
post #21 of 29
Quote:
Originally Posted by stuffe View Post

Well, the ones near me are large, one of them is very modern, and they are all well stocked....with cheap tat.

I agree that Asda do sell tat but they are not unique in this - I would put Tesco at the same level as Asda personally.

Anyway enough about supermarkets - more competition in the market is good news for iPhone customers.
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post #22 of 29
Wow, UK has Tesco, US has Walmart, wonder which big box store Canada will have an iPhone deal. Rogers is charging me to death for my iPhone $80 a month. No wonder I'm iCrazee.
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post #23 of 29
Quote:
Originally Posted by michaelab View Post

It's possible (and always has been) to buy an iPhone off-contract (outright, unlocked, legal, no strings attached) in the UK. It's obviously expensive though:

http://www.expansys.com/d.aspx?i=183742

Michael.

Thanks for that. Certainly looks very overpriced to me. In dollar terms that is about $500 more for exactly the same unit (outright and unlocked) here, using the Apple outright price as my benchmark.

Hopefully Apple start selling it outright and unlocked in the UK too, so there isn't this kind of rank opportunism occurring.
post #24 of 29
Quote:
Originally Posted by stuffe View Post



To answer a couple of notes above, yes you can just buy it (not cheap tho) and the WIFI isn't tied to Tesco, but the standard O2 stuff.

I can't say it's any cheaper over the lifetime of a contract that anywhere else, given the higher entrance costs, but at least it's different, and for those who don't want a lengthy lock in etc it might be suitable.

Interesting. Anyone able to confirm whether these are unlocked prices? I want it so that if I go to Sweden or anywhere else for a week I can jam in a TeliaSonera SIM and it will be fine.

Also, PAYG means no contract is that right?
post #25 of 29
Quote:
Originally Posted by cosmic68 View Post

Anyway, i'm sh*t at maths. I'm on O2 on the £35 tariff, is the Tesco deal a good one?

Say you get the 16GB 3GS iphone. O2 charge:

£30 per month for 18 months with 75 mins and 125 texts, handset price is £185, unlimited data.

On Tesco:

£20 per month for 12 months with £60 worth of calls and texts, handset price is £320. It doesn't say if 3G access is charged after 12 months or if it's just the openzone wifi.

Generally calls will be on average 25p per minute (to the same network) and texts 12p each so £60 gets you about 240 minutes or 500 texts. If you split them evenly, it's 120 minutes and 250 texts. Pretty much double what O2 offer. It's also better having a single amount for both as you might not text much one month so you get more call-time. With O2, it doesn't matter.

Calls to other networks will be 50p per min so that brings the total closer to O2.

As for the overall cost, you are talking about:

18 x £30 + £185 = £725 on O2
12 x £20 + £320 = £560 on Tesco

More minutes/texts, shorter contract and saving £165. Now, if they start charging £10 a month for 3G access after 12 months, that saving is negligible but it's still a more flexible contract with better minutes/texts. I can see the initial price putting people off though.

All O2 really have to do is drop the 3GS handset price to £99 and consumers will most likely overlook the savings on the Tesco Mobile tariff.

Quote:
Originally Posted by benice

Interesting. Anyone able to confirm whether these are unlocked prices? I want it so that if I go to Sweden or anywhere else for a week I can jam in a TeliaSonera SIM and it will be fine.

Also, PAYG means no contract is that right?

Those are locked to that network but PAYG means no contract. You'd have to unlock the phone yourself if you bought one of those. I think the jailbreaking software allows you to do an unlock only.
post #26 of 29
Quote:
Originally Posted by Marvin View Post

18 x £30 + £185 = £725 on O2
12 x £20 + £320 = £560 on Tesco

O2 offers minutes allowance. 75 mins and 125 texts are already covered by £29.38 a month.

Tesco does not. With Tesco it's £560 + up to £60 of flate rate calls/texts + whatever else you spend above that limit. Voice minutes and texts are not covered by £20.
The difference is thus less than £165.
Having iPhone and 75 mins and 125 texts per month with Tesco costs you
12 x £20 + £320 + 12 * 75 * £.20 + 12 * 125 * £.10 = 560 + 180 + 150 = £890
after 12 months.
The advantage of Tesco's plan is that voice minutes are usually never consumed. And a customer will probably get somewhat £40-50 of texts a month, which is not that bad.

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People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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We mean Apple no harm.

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post #27 of 29
Quote:
Originally Posted by ivan.rnn01 View Post

With Tesco it's £560 + up to £60 of flate rate calls/texts + whatever else you spend above that limit. Voice minutes and texts are not covered by £20.

I don't think so, the unlimited calls on the £60 per month plan doesn't mean you get unlimited calls at a flat rate but rather you get unlimited calls included. On the £20 per month plan you get just £60 included and after that, you get charged at the rates mentioned. You already buy the phone outright so the £20 each month has to be on calls, texts and data. Data is only £10 per month at most.

My numbers were wrong though because Tesco actually have lower rates than O2 so it's only 20p for other networks and 10p per text. This means the £20 per month plan gets you 300 minutes or 600 texts.

Check here for a comparison of all providers:

http://recombu.com/news/tesco-iphone...bc_M11234.html

"Value has always been a key concern for Tesco Mobile, with a Tesco Mobile spokesperson telling us today, It was important for us not to come out with something that was just a few pence cheaper.""
post #28 of 29
Quote:
Originally Posted by Marvin View Post



Those are locked to that network but PAYG means no contract. You'd have to unlock the phone yourself if you bought one of those. I think the jailbreaking software allows you to do an unlock only.


Thanks for that Marvin.
post #29 of 29
Quote:
Originally Posted by Marvin View Post

I don't think so, the unlimited calls on the £60 per month plan doesn't mean you get unlimited calls at a flat rate but rather you get unlimited calls included. On the £20 per month plan you get just £60 included and after that, you get charged at the rates mentioned. You already buy the phone outright so the £20 each month has to be on calls, texts and data. Data is only £10 per month at most.

My numbers were wrong though because Tesco actually have lower rates than O2 so it's only 20p for other networks and 10p per text. This means the £20 per month plan gets you 300 minutes or 600 texts.

Check here for a comparison of all providers:

http://recombu.com/news/tesco-iphone...bc_M11234.html

"Value has always been a key concern for Tesco Mobile, with a Tesco Mobile spokesperson telling us today, “It was important for us not to come out with something that was just a few pence cheaper.""

OK, for the better. (I still have doubts, but I'd be glad to mistake their pricing)
P.S. Apparently, O2 sells the minute of voice call a bit cheaper --- £.196, which is normal in the situation with Tesco as MVNO.

We mean Apple no harm.

People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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We mean Apple no harm.

People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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