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20. December 2009 by Aidan.
My daughter (14) has a mobile phone on the Meteor network in Ireland. It is a pay-as-you-go phone and once she tops up the credit (or in fact once I top up her credit) by €20 every 30 days she gets free calls and texts to everyone else on the Meteor network.
All of her friends are also on the Meteor network and topping up by €20 every 30 days to get the same deal.
I asked her about usage of the phone. We checked, and she sends about 85 SMS messages per day, so about 2,500 per month. Her calls total about 5 hours per month. (She assures me that this is conservative usage for a 14 year old). Most of these are included in the free text and calls package, unless she calls or texts myself or my wife, because we are on another network.
So the deal is that the phone company gets about €240 per year from her (actually from me) and my daughter gets 30,000 SMS messages and 60 hours of calls a year.
There are other deals out there from other phone companies that include calls and messages to all networks or charges less than €20 per month but my daughter won’t switch. The reason she won’t switch is because if she did then her network of friends would no longer be able to SMS and call her for free. So the power of the offer from Meteor is not only the bundled offer for a fixed price, it is the fact that everyone within my daughters network of friends are on the same deal and so no-one will leave the network.
I did ask her whether everyone would switch to another network if they could get the same deal from another network for less money. Her reply: “Only if you could get it for significantly less, say €10 per month!” So this market would need a significant incentive to switch to another carrier but if that incentive was there there would be a risk of large scale switching.
An eye opener for me was a few months ago when my daughter came downstairs after being on her phone for some time. I asked who she was talking to and she said she was on a conference call! Apparently each evening over the holidays 8 or 10 of her friends held a nightly conference call to catch up on what was going on and the latest gossip. This is a very switched on market!
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