Vodafone loses 25,000 customers
For its March quarter, buoyed by XT woes, Vodafone enjoyed a net-gain of 11,000 customers. The quarter before that, it picked up 9000.
But a reversal of fortune is revealed in the company’s latest accounts, just released by its UK parent. For the three months to June 30, Vodafone NZ had a net loss of 25,000 customers (worldwide, Vodafone recorded a strong result, centered around an increase in data revenue).
The result sees Vodafone's market share by connection dip below 50% for the first time since the XT and 2degrees launches.
Mobile connections/market share by connection
Vodafone: 2,479,000* 49.82%
Telecom: 2,291,000** 46.04%
2degrees: 206,000 *** 4.14%
Vodafone's customer count does not include connections to its growing band of mobile virtual network operator partners, which includes TelstraClear (around 30,000), CallPlus (5000), Orcon, B+W and Compass (1000)****.
If these wholesale partners - who have all launched over the past year - are included, then Vodafone remains over the 50% mark.
Telecom's first 3G wholesale partner to launch, Digital Island, told NBR it has 1000 customers as of July 22.
2degrees has not supplied any customer update since its February 26 claim that it had 206,000 customers who had paid for a call in the past 30 days. But it did tell NBR last week that the number of customers who had ported a Telecom or Vodafone number to its service - which stood at 53,000 on February 26 and had jumped to 75,000 by June 4, according to TCF.org.nz figures - now stands at 83,000.
XT wakes up
The quarter saw Telecom resume XT marketing with a deftly-pitched appeal to Kiwi can-do spirit, and a 30-day trial offer. The new campaign began June 3.
It also saw 2degrees launch a major campaign to promote number portability, or the ability to bring an 021 or 027 number to the new network.
A recently departed senior Telecom employee told NBR this morning: "Telecom Business churn rebounded quickly in May" on the back of a "sharp increase" in XT sales. "[Telecom is] winning back some bigger SMEs now".
Silver lining
Vodafone NZ’s accounts hint that 2degrees may be picking up some of its losses - as the number of its customers on pre-pay slips again, this time from 70.2% to 69.5% (2degrees only offers pre-pay plans; historically, Vodafone has had around 72% of its customers on pre-pay).
If so, the silver lining for Vodafone is that it’s losing low-end customers.
"Vodafone is pleased with the result, given the highly competitive nature of the New Zealand market. With 2egrees’ entry and both Telecom and Vodafone offering wholesale service to a raft of mobile providers, the New Zealand market has changed dramatically over the past 12 months," a Vodafone spokesman told NBR this morning.
"Our on-account result shows the effort the sales teams have put in to winning new business in the contract customer space. Vodafone has always offered greater value to those customers who sign up to a contract in return for the certainty contract customers deliver."
iPhone, iPad boost?
As Apple’s sole official NZ carrier, Vodafone should get a boost in the current quarter from the release of the iPhone 4 and iPad 3G.
And the Friday iPad launch seemed to go well, with Magnum Mac in Newmarket alone selling 200 tablets according figures supplied to NBR by pretend Super Mayor Cameron Brewer.
And all iPads come with a Vodafone Micro-SIM inside (although the telco offers no handset subsidy).
But the gloss has been taken off the launch (for Vodafone) but the fact that Telecom (from next week), 2degrees and MVNOs like Orcon will all offer their own Micro-SIMs Apple’s new gadgets.
Vodafone (and Telecom's) biggest challenge in the newly competitive mobile market - 2degrees' 3G launch - is yet to come.
But a live 3G trial is now underway (see NBR's test results, and much more on the 3G launch, here).
Vodafone NZ connections: a recent history
Q2 08/09: 2,427,000
Q3 08/09: 2,464,000
Q4 08/09: 2,502,000
Q1 09/10: 2,511,000 [Telecom launches XT]
Q2 09/10: 2,484,000 [2degrees launches]
Q3 09/10: 2,493,000
Q4 09/10: 2,504,000
Q1 10/11: 2,479,000
Sources
* To June 30, 2010. Vodafone PLC financial statement, July 23, 2010
** To March 31, 2010. Telecom financial statement, May 24, 2010
*** 2degrees media statement, February 26
**** MVNO figures supplied to NBR by CallPlus, TelstraClear, Compass and Digitial Island on July 22.
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Comments and questions20
Good job. Vodafone and Telecom, give the appearance of being competitors. But that's just a cleverly-thought-out commercial artifice, to fool the consumer. The two, actually, function as a duopoly, where their commercial imperatives, neatly dovetail, with each other.
Vodafone will be quietly pleased with this result. Losing low-spend customers but gaining high-spend customers... all while crying loudly about competition entering the marketplace and how tough it is.
A customer who spends double is worth more than a customer who spends little. Average revenue per user is the name of the game and I see none of those figures quoted here. Not all customers are created equal and Vodafone's strategy appears to be dump those that make little or no revenue for the company on to 2Degrees and its virtual partners while taking higher value customers from Telecom.
Does Anonymous (at 02:18 pm on July 24) work for Vodafone by any chance?
Has any one ever tried to deal with Vodafone when things don't go right. very difficult! they ignore their Consumer guarantees act responsibilities hiding behind limited warranties. They offer insurance that doesn't cover. They don't call back. This must eventually hurt them in the market.
Both via the call centre and on twitter. Vodafone has been both polite and courteous and gone the extra mile for me sorting out issues.
I was traveling in Europe last month and had a problem with my phone. I complained on twitter. And within minutes someone (Chris?) had fixed my problem. Excellent customer service.
In my experience, the only thing that seems to be increasing at Vodafone, is their level of terrible customer service. They even charge prepay customers to access "customer service"!
In one household, with a phone line, broadband, an on-account cell phone account and 2 prepays, vodafone would give us nothing for having it all with them. it was still impossible to call them from a prepay without paying $1 per call.
Eventually changed to Telstra cos they offered a deal for the package. But they regularly make you wait 20 mins to speak to an operator and then another 15-3o for the operator to put you through to faults.
Needless to say, I'd already been done over by Telecom before changing.
Why cant this country have a decent telecommunications company?
Since kiwis like compairing nz telcos to other ones internationally I'll do the same. It is not unusual overseas to pay to call through to customer services, vodafone brings it in here and the world is about to end. Most of the time people are just to lazy to do things themselves and fairenough you pay to receive help. Banks do it all the time, what's the difference? I think this is a case of kiwis wanting something for nothing, unfortunately the world doesn't work like that.
Is this fair competition?
You may want to explain what you're on about in some more detail.
Short answer: yes.
Longer answer: yes, yes it is.
What a disaster: Rep called offered all sorts with no hastle changover. He apparently "moved on" then the changover started. broadbands cut without warning. Off for month - then no capacity at exchange to reconnect ??????. Texts send advising changeover dates - but did not state where ? Auckland - wellington - christchurch or exactly where. Mobiles similar. Accounts all incorrect - been trying for about 6 weeks to get sorted - yesterday 2 broadbands disconnected for non payment ??? They are unable to sort out the chaos. Both as bad as one another. What does one do now with chaos at every location ? Close down businesses may relieve the stress.
Why pay to retrieve Voicemail?
In other countries the operators realise that customers generate revenue when retrieving voicemail for free & calling the party that left the voicemail. Why do operators here not realise that? Why get 100 x 20c where you could get 100 x 0c + 50 x $1?
Penny wise & pound foolish!
Abysmal signal in Eastern Bays, Auckland. And admitted.
Near non-existent service in Arrowtown - a tourist hot spot. Admitted but with indifference.
My Iphone gives me a "no signal" message several times a day. Other subscribers report frequent dropped calls.
As I said to Vodafone, I had a stronger signal at Everst Base Camp than I do in parts of New Zealand - including Arrowtown and Auckland!
you said it. You're using an iPhone and they notoriously have problems holding a signal even in places where other (less popular) phones work well.
The new iPhone will operate on both 2100 and 900 megahertz frequencies so will see more of Vodafone's network than the existing model.
You are probably right about the new phone but the fact remains that Vodafone's signal is poor. It was apparent to me with previous cellphones and to all the people I spoke with in, inter alia, Arrowtown. Even Vodafone admits it - though without any indication they were going to do anything about it.
Don't you wish it were 250,000 customers?
I have to disagree, about your comments related to Vodafone coverage.
I have travelled extensively throughout New Zealand, using my trusty Nokia 6121c (which supports both the 3G frequencies that Vodafone use 2100/900Mhz UMTS) & the coverage has been VERY impressive.
From the Far North, to the Far South, coverage has been excellent & as for Arrowtown - I have had no coverage problems there, my phone works fine. Eastern Bays - no problem with coverage there either, so I suggest you either get a decent phone (Nokia) or chance your luck with the iPhone 4.
I do not work for Vodafone - I'm just stating my experience with regards to coverage on the Vodafone network.
This is abysmal, nothing more than telco employees carping and back biting.
Vodafone is an out of control multinational that's done well out of telecoms ineptness. 2degrees is playing penny ante in the prepay space whilst the mvnos struggle to sell any appreciable volumes beyond their existing customer base.
Coming very very soon.. Friday??
Of course Everest base camp has great coverage - it has clear line of sight to most of Asia and sending a text saves climbers from scraping their 'famous last words' into their boot soles with their ice-axe.
Most people dying of frostbite and hypothermia in Arrowtown just pop into the pub on the corner.
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