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Telecom hits back on $10 txt; touts XT’s first-week success

“As a fellow Brit I’m ashamed that Paul and Russ would come down here and take the salaries that they do, then do something as stupid as abolishing $10 txt,” says Black+White boss Jonathan Eele, referring to the emigration choices and XT pricing executed by Telecom chief executive Paul Reynolds and chief financial officer Russ Houlden. “It’s embarrassing.”

As a so-called mobile virtual network operator, Black+White sells a rebadged version of Vodafone’s 3G service. All Black+White plans now include 600 free txts.

To emphasise his point about $10 txt, Mr Eele donned a priest's outfit, hired a hearse, strapped a hastily spray-painted coffin to the roof of a Land Rover, then staged a “funeral procession” through central Auckland today, lamenting the CDMA plan’s failure to appear in Telecom’s XT line-up.

Mr Eele told NBR the procession would stop at “points of interest in the life of $10 txt”, which turned out to be Telecom retail outlets.

A group of Telecom managers came down to watch the publicity stunt, Mr Eele said, but Telecom head of external media Mark Watts told NBR “We had more important things to deal with ... He [Mr Eele] does have chutzpah."

In a statement, Telecom later added, "$10TXT has been replaced on the new XT Network with a choice of three texting plans $6 for 150 texts, $12 for 600 texts and $18 for 1500 texts to any network. These three plans have been introduced to more accurately reflect different customers’ texting needs and represent considerably more value for heavy texters (e.g. $0.012 per text on the $18 plan)."

Telecom says the option to "bolt on" any txt or mobile data plan to a monthly voice plan - or not - offers more flexibility.

Mr Eele was unimpressed, saying the XT plans force people to guess ahead of time how much txting they’ll need to do in any given month. “With $10 text, they didn’t have to think about it.”

Further, if somebody doesn’t use their full txt allocation during the month, then the per-txt rate can become very high.

Telecom’s $10TXT plan, for its CDMA network, initially allowed for an unlimited number of txts, but was subsequently capped at 500. Up to the 50th txt, customers are charged 20 cents a txt, so if, say, they only send 30 txts, they are only charged $6 for the month. Txts from 50 to 500 are free, then subsequent txts are charged at 10 cents (to Telecom customers) or 20 cents (to Vodafone).

At Telecom’s recent investor day in Sydney, head of retail Alan Gourdie said he wanted customers to talk more. By global standards, New Zealanders are big txters and small talkers, adversely impacting all telcos' arpu (average revenue per user). However, Mr Gourdie focussed on more attractive mobile data plans as the key to increasing arpu.

“If they’re wondering whether killing $10TXT was the right thing to do, they should ask for a show of hands among CDMA customers,” says Mr Eele.

Telecom says customers are voting with their wallets.

During XT’s first five days, 25,000 SIM cards and handsets were sold, which the telco says was at the high end of its expectations.

Telecom is aiming to migrate one third or 675,000 of its CDMA customers to XT during the new 3G network’s first year of operation.

Before XT’s May 29 launch, the telco also claimed success in luring corporate customers away from Vodafone, touting a $20 million Gen-i deal with Crane Group.

Telecom says it has subsequently won XT business with adidas, Axa, Harcourts, Harvey World Travel, Mainfreight and Radius Health.

More by Chris Keall

Comments and questions
24

Go black + white, what a great low-cost stunt!

This guy is full of cheap, cheesy stunts. If he ever wants customers to take Black White seriously he has to stop acting like a dodgy car salesman!

they've got a base of 2.0m customers and all they can manage in the first week of forced migration is 25,000?

bet Vodafone is weeping in its porridge this morning.

@"poor old Telecom"
How on earth is it 'forced migration' ???
The CDMA network is remaining in operation for a few years yet.
Tthose who have signed up (ie: 25000 in 1 week), are obviously those that WANT to be on the new network.

"By global standards, New Zealanders are big txters and small talkers, adversely impacting all telcos' arpu (average revenue per user)"

By global standards New Zealanders take it in the ass on pricing to talk - they are big talkers just not on mobile. This does not impact ARPU, just the ARPU is made up differently - we don't get as much for it as people overseas

CDMA = $10TXT. $10 for 500 texts. cost per text = 2c

WCDMA = $12 for 600 Texts. cost per text = 2c

Both work the same way i.e. 20c per text for the first 50 (or 60) texts, then the remainder fre after that. The only difference with Xt plans is that you opt in, instead of always on.

so far, so similar.

With XT, for higher texters, there is the $18 option, which gives average price of 1.2c per text.

Then, if you are a prepay customer on XT and top up online you get bonus credit.

Potentially you can top up with $60, get $20 for free to get $80 of credit. Take the $18 plan for the next 4 months will use up $72 of that credit, and get you 6000 texts.
$60 of outlay, $8 of credit still left, means you spend $52 and you have 6000 texts. That is less than 1c per text. Far better than $10TXT.

Even the $12 option works out to be only $9 with the top up bonus.
so...
CDMA $10TXT = $10 for 500 any network texts
XT = $9 (potentially) for 600 any netowkr texts.

More texts for less money. How can that be bad?

What Mr Eele should be signalling is the death of Boost TXT. That was (IIRC) 2000 texts to Telecom ony phones for $10. For those customers who only text Telecom mobiles there aren't any XT deals that offer similar pricing I beleive. (the $60 topup option described above is most similar, but those are also Any network texts, which probably outweighs the extra costs)

Good point on Boost TXT.

With the XT plans, I think Mr Eele's point was that on $10TXT you would only be charged a faction of the $10 if you happened to send fewer than 50 txts (say, if you were away) whereas on, say, the XT $18 for 1500 txt plan, you get charged a minimum $18 even if you send far fewer messages.

except he is wrong in that repsect too.

to quote the telecom Ts and Cs

"Depending on the TXT Extra you've subscribed to, you will be charged for the first set number of eligible TXT Extra messages per month you send at $0.20 per message and receive your other allocated eligible text messages free (at $0.00 per message). For example, if you've subscribed to 150TXT Extra you will be charged $0.20 per message for the first 30 text messages and the next 120 text messages are free
If you do not exceed the first set number of eligible TXT Extra messages, you will only be charged for what you use that month and not the monthly fee. For example, if you've subscribed to 150TXT Extra and you use less than 30 text messages per month then you will only be charged $0.20 per message and not the $6.00 monthly fee"

Using Telecoms CDMA network on the Flexi Mytime 200 (which is 200 off peak minutes per month) costs me $30. If I wanted to upgrade to the XT network I would be hit with a price hike of an extra $50 per month for 180 minutes. Take a hike Telecom. 2 Degrees here I come.

Resorting to such a trashy stunt and offending many's religious sensibilities clearly smacks of desperation. I have been trying to connect using my %$#@! vodem for 2 hours... this is a simple case of getting precisely what you pay for - you pays penuts you gets monkeys...

prepaid credit expiry 6 months same as the number 6 months your credit and number expires

Get it.

Telecom xt's are Dumber than normal telecom
because theres no 2000

i think thats a great idea!!

i think thats a great idea!!

hi

i really need a free $20.00 top up olease

i want a free topup

i nd a top up real bd

i nd a top up real bd

please top up for 0278421875

10 top up to xt

to top up on the old CDMA network u only needed a 10 dollar voucher for 500 or 2000 txts. to top up on XT u need a 20 dollar voucher top up for 600 or 1500. that sucks XT hasn't got better coverage anyway!!!!

Can i please have one :) x