Vodafone’s heavy artillery: CallPlus confirms mobile launch; Orcon on the way

One 2degrees manager expressed concern to NBR that Vodafone could try to ring-fence his company with virtual mobile partners. Today, that fear seems well-founded as CallPlus details the August 17 launch of its new mobile service.

As first revealed by NBR on July 23, CallPlus is entering the mobile phone business. As in its fixed line and broadband business, the company will deploy both a consumer brand - Slingshot Mobile - and a business offering, CallPlus Mobile.

Both will go live on August 17.

And both will offer standalone mobile services, priced to match Telecom, Vodafone and 2degrees, but steep discounts for those who sign up to fixed line and broadband accounts too (see pricing details end of story).

The CallPlus service is a rebadged version of Vodafone’s mobile service, running on the same network, and supporting the same line-up of cellphones and modems, but with its own sim cards, pricing and plans under the so-called mobile virtual network operator (MVNO) model. Vodafone and Telecom partly introduced the MVNO concept - originally popularised in the UK by Virgin Mobile - partly on the basis that it’s better that customers are cannibalised by someone taking your wholesale feed than a competitor. And partly to placate the Commerce Commission.

Vodafone already has two MVNOs - Black+White and Compass Communications - but they are tiny and, bar the odd, entertaining publicity stunt, largely unknown.

Now the heavy artillery is being lined up.

CallPlus already has 150,000 customers over its CallPlus and Slingshot services, representing a big up-sell opportunity. And GM Mark Callander had no qualms about announcing his company’s new mobile service on the day of 2degrees’ launch. Slingshot Mobile will be pushed in a TV campaign, which will include an offer of a free handset for Telecom customers who switch.

And Vodafone’s second major MVNO, Orcon - which also has around 150,000 customers - has pledged to NBR that it will launch within 60 days, also pushing mobile and landline bundles.

Chief executive Scott Bartlett told NBR that Orcon has already signed its first mobile business customer - a company with 400 staff. CallPlus, too, has been selling its service in soft-launch mode, with around 20 small business customers already onboard.

And Vodafone's MVNO ranks will swell ahead of Christmas as TelstraClear brings its 30,000 customers across (currently, TelstraClear sells Telecom's service, but a spat about delayed access to XT has seen the carrier seek a 3G alternative. The defection leaves Telecom with just one MVNO, the business-focussed Digital Island.)

All-of-business bundles
Mr Callander sees his “all-of-business approach” as his main weapon against 2degrees. “We’ve got a unique way of achieving cut-through. 2degrees is incapable of picking up half the consumer market because they can’t offer landlines.”

Another ISP boss spoken too by NBR said he was incredulous that 2degrees had not partnered with any major ISP offering a landline VoIP service (as Orcon, CallPlus and WorldXChange do), which would have given the mobile newcomer a fuller offering.

Last night, Mr Callander told NBR he'd been unimpressed with 2degrees' launch:

"It signalled that competition is finally here. However, it's is a little unfortunate they have only focused on the prepay market initially. This is a low value segment with a very aggressive txt behaviour. This market will not switch to a 'price per text' structure which will create challenges for uptake on an permanent basis.

"The higher value market segments including on-account consumer and the small-medium business market have been ignored and these are the customers that will benefit the most from mobile competition. The inability of 2degrees to offer fixed line services will create barriers to success in the short-medium term due to the high level of bundling. In saying that it is very early days, and I'm sure there will be some more tricks up their sleeves - there has to be!".

Don't JetStar it
Orcon's Scott Bartlett is typically contrarian in his attitude to being an MVNO.

“I want 2degrees to succeed,” said the Orcon boss.

Although acknowledging that “we’re selling on Vodafone’s network so they get paid at the end of the day,” Mr Bartlett sees his company’s mobile push as complementary to our third mobile operator’s attack on the incumbents:

“The whole industry needs 2degrees to have a successful launch. We’ve got a perfect duopoly going on in this market. It’s time that Telecom and Vodafone woke up to some real competition. 2degrees can do some damage in the pre-pay market and Orcon and CallPlus in the post-paid market," he said, adding:

“I just hope they [2degrees] don’t JetStar it.”

CallPlus' plans

As with anyone hopping betwen phone companies these days, CallPlus customers will get the choice of bring their Telecom 027, Vodafone or 021 (or, I guess for the really impatient, 2degrees 222) number with them, or chosing one of the carriers' own numbers, which will have an 028 prefix.

Slingshot Mobile 1
$10/ month on six-month contract. First minute of a call: 50 cents; second minute: 40 cents; third minute: 30 cents

Slingshot Mobile 2
$20/month on 12-month contract. 25 cents a minute flat rate for calls to any mobile network

Both plans take a leaf out of XT’s book, charging by the second after the first full minute.

Another XT-like touch: you can bolt on txt packages: $12.95 for 2000 messages, or $9.95 for 600 a month.

If Slingshot Mobile customers sign on for a fixed voice line, too, then they get further mobile calling discounts:
- 20 cents a minute to other CallPlus Mobile or Slingshot Mobile customers
- 25 cents a minute to people on other networks
- 25 cents a minute to call a landline

2degrees is offering a flat rate of 44 cents a minute and 9 cents a txt but with no monthly fee or contracts in its (so far) all pre-pay line-up.

Slingshot Mobile who also sign on for broadband will get a bonus free 2GB of data for every cellphone.

CallPlus Mobile (for business users)
- $20/month on a 12-month plan; flat rate of 24 cents a minute ex GST (27 cents incl) for calls to other CallPlus customers, other networks or landlines.
- Mobile calling rate drops to 20 cents a minute ex GST if customers also have fixed line and broadband business with CallPlus.
- The same 2GB of bonus data per phone deal applies
- Billing will break down employees calls by work hours and out of work hours
- International roaming rates are not yet available. Mr Callander says they will be comparable to Vodafone and XT.

Mobile data
A block of 200MB costs $20 a month, with further blocks of data available for $10 a month (the same price as Vodafone; Telecom offers 120MB for $12; 2degrees does not yet offer any 3G data or data plans, but does sell slower Edge data for 50 cents a megabyte).

Mr Callander says his company’s mobile data deals are pitched around the fact that most people only use around 100MB of data a month, even if their on a 1GB plan. Heavier users will find sharper mobile data deals on Vodafone and XT, especially in the 1GB+ range.

If you bust your cap, another $10/10MB chunk will automatically be added rather than punitive per-megabyte charges being applied.

Handsets
Any Vodafone handset (or data card or data stick) will work with a CallPlus or Slingshot Mobile sim card, Mr Callander says his company will focus on six consumer and small business-friendly phones: the Blackberry Pearl  8100 and Nokia's 6121, 2630, 3120c and E52 models, plus a $149 data stick.