Saturday 22 October 2016

The Punt: Two fingers from 3 by text

Published 11/05/2015 | 02:30

Three Ireland CEO Robert Finnegan
Three Ireland CEO Robert Finnegan

And so it begins. Three is in the process of texting (yes, texting) customers to tell them it is jacking up its rates from next month after buying O2 Ireland from Telefonica for €850m.

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The carrier says it is upping its prices to pay for investment to "create a state-of-the-art network". The Punt isn't so sure.

Two issues come out of this. Firstly, the O2 Ireland network clearly needed investment - there was no 4G network, for example - but if that was known beforehand, why wasn't it baked into the sale price? If Three forced the matter, Telefonica would have had a choice: sell for a lower price, or invest in a network it didn't want. That leads to this conclusion: either someone in Three made a big mistake and forgot to bring this up, or Three is gouging its former O2 customers.

Second, why is Three telling customers by text its rates are going up? Why not by email or letter? There is something offensive about a company telling its customers they are going to pay more by SMS. This is a serious change. There may not be anything to stop Three doing this, and its text does provide a link "for further details and your rights", but realistically how many people will click this link?

Unlike an email or letter, texts cannot easily be printed, and can easily be accidentally deleted.

This is an evasive and disrespectful move by Three.

Brain drain at Davy's?

What's wrong with Davy's these days? The country's biggest stockbroker just can't seem to hold onto staff. The latest to jump ship is Pramit Ghose, who wound up at Davy's after Bloxham went wallop three years ago. The restless asset manager is off to Merrion, where he will join fellow Bloxham refugees Alan McQuaid and Angus McDonnell.

Ghose is not the only one to quit Davy. Damien Meade, Paul O'Brien, Alan Wyley and James Forbes left the Dawson Street broker for Goodbody last week.

Davy has been doing pretty well for itself lately despite a few well-publicised problems experienced by clients in the wake of the crash. This has obscured the good news at Goodies, which has recently refurbished its offices and hired several experienced players.

The banker who likes cash

The Germans love cash so the Punt was not surprised to read that German central banker Carl-Ludwig Thiele despises credit and debi t cards.

He recently cited economic data, freedom of choice and even Russian novelist Fyodor Dostoyevsky in a passionate defence of banknotes and coins, rejecting the rising concept of a "cashless society".

With ever more people shopping online and using credit cards, debit cards and smartphones to pay bills, it is little wonder the idea of doing away with cash has emerged.

Thiele, who oversees cash management and payment and settlement systems at the Bundesbank, would have none of it.

"Abolishing cash would hurt consumer sovereignty - the free choice of citizens about their payment instruments," he said in Gmund in southern Germany. "Government agencies do not have the right to tell citizens how they should pay."

The concept of a cashless world has influential proponents such as Harvard professor Kenneth Rogoff, who has argued it would give central banks a freer hand moving interest rates into negative territory by preventing investors switching back into cash.

Last Wednesday, Denmark proposed ending next year the obligation for selected retailers to accept cash payments, in a move that would take Germany's northern neighbour one step closer to such a cashless economy.

Thiele is having none of it. Cash, he believes, is and will remain the preferred payment method for some consumers, offering the simplicity, security and speed they sought.

The Punt is inclined to side with the Danes on this. But the Punt also knows it is a lost cause. Irish politiicans, like their German counterparts, are not adverse to getting cash in brown envelopes. We will not be holding our breath.

Irish Independent

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