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Q and A session with Russell Stanners, CEO of Vodafone New Zealand
Posted on 28-Mar-2007 22:18 by Juha | Filed under: Articles

Russell Stanners took some time off to organise answers to a range of tough questions from Geekzone members as per below:

1. Data roaming charges: Here’s a case in point on the exorbitant charges for data roaming on overseas networks. I have a client in Australia for a few weeks, who has had no end of email issues with jumping from Hotel to internet cafe broadband connections etc. Sometimes he can send, sometimes not, sometimes receive, sometimes not. The solution to this problem would be using one connection: a Vodafone data card. Problem being, considering he is shifting an estimated ½ gig of data during his few weeks away; this would equate to $5000-$15000 in data charges!

When are Vodafone going to sort out their excessively high casual and roaming data charges?

A: Vodafone’s mobile data international roaming charges are, for the most part, determined by the network to which the customer is roaming. Vodafone New Zealand simply has to pass on those charges to the customer.

If you roam in Australia, it’s much cheaper to use Vodafone. It would have cost him about $5,000. It’d cost more to use other options, including the hotel.

Here, mobile data pricing is in fact very affordable, particularly when you compare rates in our nearest neighbour, Australia. With Vodafone there, you pay $99.95 a month for 1GB. Here, you pay $49.95 - $59.95. That’s as much as half the price, and is very comparable to fixed broadband. The main difference is that our plans limit the amount of data.

2. Vodafone used to be known for their innovative and quick support services, however more recently this has started to decline significantly since the introduction of the limited support times... Is there light at the end of the tunnel for customers who have been 'left in the dark' with the lacklustre support offered currently?

A: Customer service is important to Vodafone. We continue to provide the best we can, however, recently we’ve had difficulties handling the volume of calls related to Best Mate. We’re working really hard to deliver what customers want and are investing further in this area

3. We see a lot of people complaining about Vodafone’s help desk, including the (now) reduced hours, apparent lack of interest on actually fixing things, not returning contacts via e-mail and more. Is Vodafone committed to improving customer services on this front, and if so what’s been done so far?

A: As I said above, customer service is important to Vodafone, we’ve had difficulties handling the volume of calls related to Best Mate, but we’re investing in this area. We should also point out that our customers’ needs are becoming more and more complex, with all the new products and services we’re offering, including mobile broadband, 3G handsets and all the things you can do on them.

4: I have a Vodafone "On Account" mobile, having done so since 1998.

Every few months, I have the need to use some Mobile Data, in particular during June at the Mystery Creek Field Days. So, what I have been doing is signing up for xx Megs of data in advance of Field Days, then downgrading back to Casual again afterwards. This year I used about 80MB of data on the $49 / 1GB promo, so it was great, I could use it as much as I wanted without fear of going over the cap.

However, there are other times when I'm on a road trip and it would be handy to use a few Megs. Because of the extremely high price of Casual Data at $10 per Meg, I'm loath to use it and try to head for a Telecom Wireless Hotspot which gives me as many Megs as I want for a very reasonable price (free at present). However, it's inconvenient as those hotspots are infrequent outside the main centres, and I know the free usage won't continue indefinitely.

Now, here's the thing:

It would be really cool if Vodafone offered a "PREPAY DATA PLAN" where I could throw $50 at the plan, which I would hope would buy me 500 or 1000 Megs of data that could be used whenever I want. When it runs out, top up again with another $50... You get the idea.

In my case it would mean I used Mobile Broadband a lot more often. Basically I can check my e-mails whenever I'm out, whereas at present I don't feel like paying $10 - $20 just for the privilege so I leave it till I get home.

Would Vodafone be prepared to look at this idea?

Thanks for your time.

A: Yes, it sounds like something we should look at as a way to increase usage and deliver value to our customers.

5. How will Vodafone integrate Ihug with its overall business, and how does the ISP fit in with the At Home plans?

A: In future, customers will be able to choose between fixed land line and a wireless solution (or combinations thereof) from Vodafone.

6: Why are mobile data rates so high? It cannot cost anywhere near as much as 1¢/KB to provide the data.

A: Again, I believe that mobile data pricing is in fact very affordable, particularly when you compare rates in our nearest neighbour, Australia. With Vodafone there, you pay $99.95 a month for 1GB. Here, you pay $49.95 - $59.95. That could be half the price, and is very comparable to fixed broadband. The main difference is that our plans limit the amount of data.

7. How exactly do you see Vodafone selling wireless and ADSL broadband plans side by side?

A: We believe that our mobile offerings and our fixed offerings will meet different segments of the market. Customers have different needs. Offering both means we can meet the needs of all our potential customers.

8: Where would you like to see mobile broadband go in the foreseeable and long term future? Will the acquisition of ihug influence this?

A: Vodafone still believes the future of communications is more mobile than fixed. Today there are more mobile phones in the world than fixed. Mobile’s growing six times faster. We would fully expect mobile broadband to follow the same trend over time. Having said that, Ihug allows us to offer customers a complete solution

9: Russell, over what time approximately will Vodafone NZ deploy 3G Broadband to the same extent as 2/2.5G coverage & when will new Data Plans be released accordingly with higher caps?

A: The 3G network already covers a good part of our existing 2G network. We’re continuing to build quickly. The speed with which we cover the entire network and the timing will relate to how successful we are selling mobile data within the network.

As far as your second question goes, we believe our existing data caps are appropriate for the target users, who can make use of mobile broadband.

10: Do you believe that wireless technology will be a feasible replacement for fixed line technologies in the long term?

A: Yes, in the long-term I would see wireless technology as being viable for all voice and data and that the fixed world for high speed will migrate to fibre.

11: The rollout of faster HSDPA and HSUPA upgrade along with the plans for 900MHz UMTS suggest that you are serious about offering fast wireless broadband. Do you believe the UMTS network with future HSDPA/HSUPA upgrades is capable of delivering a true alternative to a fixed line broadband service for a large % of home customers in the marketplace?

A: Yes, see above. The long-term technologies are fibre and wireless.

12: Having plenty of 900MHz spectrum to roll out a UMTS network would suggest that you could roll out a network with far greater capacity than any other Vodafone networks - the primary focus on the At Home service overseas has been to use ADSL as the data bearer. Will you be marketing both methods in NZ and how different are the offerings likely to be?

A: At this stage, all options are being looked at as to how we meet our customers’ total needs. We’ll make decisions further down the track when we understand more about what customers value in each approach.

13: 3G coverage seems to be patchy at the moment, with very low signal in dense areas such as Wellington and Auckland CBDs.

A: We are constantly upgrading our coverage of 3G and 3G Broadband as well as improving quality of service. As well as extending the reach we are continually filling in our existing coverage to ensure demand does not exceed supply.

14: Frequently switching between GSM and UMTS seems to be a problem for many handsets and calls are dropped or simply not connected. Data connections are flaky. Any plans to expand the number of cell sites covering those spots?

A: See above.

15: It is my understanding (and correct me if I'm wrong) that historically the billing system used by Vodafone New Zealand has been a limiting factor when rolling out new technologies and services. For example, the BestMate service is currently available to prepaid customers, but won't be available until "early 2007" for on-account customers. Do you believe that this issue will be overcome in 2007 so that the only limiting factor is technology rather than Vodafone's ability to bill?

A: Billing is a key factor in bringing services to market; however, it’s not the only factor. Others include competitor activity, priorities for investment and our view of customers’ needs by segment. They also dictate what gets launched.

16: As an On Account customer, I am concerned that I am not getting the best value for money when prepaid customers receive calling offers (2 hour capped calling, Let yourself go, Take10, BestMate), text offers (TXT2000), and cheaper roaming. These promotions/plans/offers have often brought the value of On Account into question.
What assurances can we On Account customers have that we are receiving the best value for money being on an account/contract rather than a prepaid connection?

A: The majority of our customers are pretty satisfied with the different offerings – it all depends on how you see value. For example, I would see better value for my usage profile in using You Choose at the 49 cent per minute rate to all numbers, compared to $6 a month for calls to one number. Having said that, we’re always looking to tune our plans to meet different segments’ needs. Great idea about TXT 2000 for on-account, by the way.

17: Prepay currently allows people to spend a small amount per month, possibly using only text messaging. With the new BestMate offering, it can work out to be as little as $6 per month.
The cheapest on account plan seems to be $30 per month. Would it be possible to introduce an account plan that offers a similar price to prepay, but with the advantage of paying by invoice instead of prepay card.

A: Thanks for the feedback, see my answer earlier.

18: Why does Vodafone offer Prepay users better deals than On Account customers? E.g. Text 2000 on Prepay = $10, Text 1000 On Account = $10.00.

A: I don’t accept that prepay has better deals than on account. It depends on what you value. However, as I said before, we’re always looking to tune our plans to meet different segments’ needs.

19: Where exactly do you see Vodafone NZ in two years time? The move away from being a mobile only operator towards becoming a full service telco suggests Vodafone would like a large chunk of the total telecommunications market - what sort of increase in market share do you believe Vodafone can capture?

A: In two years I would like to see Vodafone continue to grow into the total market. We would define success as meeting more and more of our customers’ needs. We see ourselves as a mobile company that’s now focussed on meeting our customers’ total needs. Mobility, however, is still the key.

The second part of your question is commercially sensitive. We’d like to grow as fast as we can, and whether we grow is in the hands of our customers.

20: How will Vodafone differentiate itself from TelstraClear who are obviously going to be offering similar products & services in their own 3G rollout?

A: Vodafone is already very differentiated from both TCL and Telecom. We are the only GSM UMTS mobile operator in the market. We have no plans to be the same as Telecom or TCL. We’re different today and we intend to continue to offer solutions that are uniquely Vodafone. I’ve always believed that sameness doesn’t sell.

21: How do you believe Telecom will choose to compete with possibly 3 or 4 operators potentially offering a full wireless broadband and phone service in New Zealand within the next 12-24 months with a combination of 3G and possible WiMAX networks?

A: You’d have to ask Telecom.

22: Convergence is one of the big buzz words at present - what do you believe convergence really is?

A: Firstly, we believe in fixed mobile solutions, not fixed mobile convergence, when we think of fixed telephony and mobile telephony.
I.e. customers will continue to use their mobile phones more and more for voice and data. That’s what the big trends are globally. Where we see convergence is between your pc and mobile. In simple terms, over the next five years, the internet will go mobile.

23. What will Vodafone do to minimise confusion over number portability, with special regard to suddenly off-net calls and SMS?

A: There will be a free, txt-based service that will assist customers in confirming whether a number is on or off-net, before committing to the call. Details will be provided in April.

Geekzone would like to thank Russell and Vodafone for taking part in the Q and A session.

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