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.