5/1/2008 10:26:00 AM
Asda’s £5 mobile phones dismissed as loss-maker
ASDA’S high-profile ad campaign promoting four phones for £5 has been dismissed by the industry as a loss-maker.
The campaign, which was launched last weekend, included full-page adverts in newspapers and stories in the mainstream media which highlighted the deals on three Sagems and one Nokia.
One senior retailer described it as ‘box breaker’s paradise’.
One industry executive estimated that the promotion would cost around £300,000 in terms of advertising and the amount of subsidy exploited by box breakers.
Asda promised a ‘no-strings’ deal to its £5 phones, promising customers they wouldn’t have to top-up their handsets with pay-as-you-go credit.
Andrew Harrison, Carphone UK’s CEO, said: ‘We’ve been there and done that as far as £5 handsets are concerned.
‘But we always have checks and conditions in place to ward off box breaking.’
An Asda spokesman said: ‘We are putting measures in place to combat box breaking. For instance, we will only sell two handsets per customer.’