Orcon to offer cellular service from September

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timestyles

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#12556 24-Mar-2007 07:32

http://www.nbr.co.nz/home/column_article.asp?id=17623&cid=3&cname=Technology

Orcon will be offering a cellular service using Vodafones network from September. Read it and weep Econet. Apparently, Orcon have spent about a million dollars on setting up the service. I read recently about Vodafones offer of 25c per min charge to MVNO's, which means that if an Orcon user phones say a landline or Telecom line, Orcon is charged 25c. If the user phones another Orcon user, they are charged 50c per min.

"Telecom had not formed any deals with MVNOs on its network." (MVNO = mobile virtual network operators)

My thoughts: Vodafone should get out of the retailing business. They should offer MVNO's to anyone with $200,000 or more, resulting in 10 or so MVNO. With 10 or 20 cellphone companies, Telecom's market share would drop from the current ~50% to 20% or less, resulting in 80% or more using Vodafones network.

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#64871 24-Mar-2007 08:13

What? 50 cents to another user on net? Is Vodafone charging both sides of the call for MVNOs then?

At .50 the cellular cost is going to be too high for anyone to consider it, really. And this is not the first "MVNO", remember TelstraClear already sell their cellular plans with Vodafone infrastructure.

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#64872 24-Mar-2007 08:13

3 new MVNO's is certainly going to be interesting.

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#64873 24-Mar-2007 08:21

The 50c per minute price for on net calling is a tad high, particularly when you consider prepaid customers currently pay around 49c per minute on-net (this is motormouth or matesrates here, and the telcos are making $$$ of those rates) - and they can't have the pricing too much higher than that without making it uncompetitive.

It could become a lossleader rather fast if they match it.

Personally - Vodafone is a big brand both here and internationally. While they may have some short term gains by stopping retail operations and just going the mobile operator route, long term it is much better to stay in the game. Virtual operators/wholesalers come and go but they [the vodafone brand] are much less likely. And despite that - if the MVNO calling rate remains the same (25c) I doubt you would see massive drops in prices which would encourage people from one network to another... unless they are lossleaders.

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timestyles

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#64874 24-Mar-2007 09:02

freitasm: What? 50 cents to another user on net? Is Vodafone charging both sides of the call for MVNOs then?

At .50 the cellular cost is going to be too high for anyone to consider it, really. And this is not the first "MVNO", remember TelstraClear already sell their cellular plans with Vodafone infrastructure.

Yes they would charge a MVNO double the rate if there were say a Orcon to Orcon call. That is not a big issue at the moment, because effectively little calls would be from Orcon to Orcon. As Orcon customers increased, the proportion of O to O would slowly rise to no more than 1/3 of calls, so the average cost would be 2/3 * 25 + 1/3 * 50 = 33c per min.

The article, which I don't have a link to unfortunately, said that at that price there would be little incentive for MVNO's to start up, however it was considered a starting point that would aim downwards.

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#64875 24-Mar-2007 09:20

The thing that I can see a problem is that there are already consumer level plans offering 20c or 10c per minute offpeak - if it is a flatrate charge of 26c per call, then while they could offer cheaper calling during the day and still make a profit but with 10-20c per minute retail charges... it is very hard to beat, paritcularly with their MVNO standings.

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#64876 24-Mar-2007 09:50

We aren't going to see any real offerings until the cosy duopoly is broken. MVNO's have worked very well in other countries primarily because they have been able to negotiate cheap call rates. Vodafone's rates for NZ seem very steep considering they can offer pricing plans for their own retail customers with a cheaper price and also have to provide support for those customers.

Still I think it could be interesting with a few more players in the marketplace by the end of the year.

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#64881 24-Mar-2007 12:15

freitasm: What? 50 cents to another user on net? Is Vodafone charging both sides of the call for MVNOs then?

At .50 the cellular cost is going to be too high for anyone to consider it, really. And this is not the first "MVNO", remember TelstraClear already sell their cellular plans with Vodafone infrastructure.

Orca/Voda - Orca/Voda = 25c each mobile, or 50c charge/min to Orcon

Orca/Voda - Voda = 25c Orca side
Orca/Voda - Telecom = 25c orca side
Orca/voda - PSTN = interesting. Not thought about that, but probably 25c/min

25c/min really isn't workable.... esp when orcon will have to subsidise handsets, supply freebies etc, to compete in the market.

TCL is NOT an MVNO, it's an Agency agreement where we sell Vodafone's products and get a margin.

A true MVNO gets partitioned access to the switchs, raw call records, and can directly manage their subscribers. What Vodafone is offering is a wholesale product, but you still need to go through their interface for provisioning and management - meaning if they don't apply resources for development, you're knackered.

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#64886 24-Mar-2007 13:36

So what's the idea here? That we all pay more to errm, get cheaper (and I hope, better) service from the competition?

Juha

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#64888 24-Mar-2007 14:21

Thats the idea... however I can't see it being a smash-hit unless either there is competition between telcos to offer MVNO services... or how low can resellers go (at this time it looks like a wholesale arrangement) on their margins (or if they need to become lossleaders to encourage demand on other services like fixed line broadband)

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#64895 24-Mar-2007 16:11

The MNVO setups in NZ which have all but come and gone have always left out very sour or have simply just gone bust!

First MNVO was back in 1997, caled Freedom, orginally sold through the Warehouse, The price was $1 a minute flatrate which had no credit expiry, Went bust in 2000 from memory, Telecom reactivated the customers on Prepaid and put $50 on each number.

Second, X-Cell, 1998, never took off, sold in 2002-03 to Reach Wireless whom operated it for a year before it mysteriously vanishing.
the phones still worked on the 025 network until the old VSP prepaid system was replaced by the current where they were then reactivated on Prepaid, no credit.

Gold mobile came out in about 1998, it pretty much killed off Freedom, Offered the same deal as Freedom in the early years.
Telecom took over it in about 2005, Then it pretty much vanished altogether after a flurry of price changes..

Telstra (NZ) resells Vodafones services under an 029 prefix, The deal is currently anything but rosy...
Vodafone went ahead and "RECYCLED" all their unused stock of unactivated (PreActive) PrePay connection packs, They also deactivated my own vodafone number which I had bought and not activated for 9 months... This was quite possibly in breach of the T & C.. as the legal terms made references to "Activation" which activated the 12 month disconnection/credit expiry schedule, there was no mention of the packs themselves having any "activation timeframe" until the simcard was used and registered on the network.

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#64897 24-Mar-2007 16:38

Yes, I did hear that about TCL... they wouldn't confirm it though.

Juha

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#64901 24-Mar-2007 16:48

paradoxsm:
Telstra (NZ) resells Vodafones services under an 029 prefix, The deal is currently anything but rosy...
Vodafone went ahead and "RECYCLED" all their unused stock of unactivated (PreActive) PrePay connection packs, They also deactivated my own vodafone number which I had bought and not activated for 9 months... This was quite possibly in breach of the T & C.. as the legal terms made references to "Activation" which activated the 12 month disconnection/credit expiry schedule, there was no mention of the packs themselves having any "activation timeframe" until the simcard was used and registered on the network.

I had that problem with a vodafone branded prepay pack. I had several around since back in the days before parallel imported was selling cheap handsets I had bought a few via vodafone retailers, and just stuck the packs in a drawer, unopened even and there was nothing on the exterior signifying an expiration.

After complaining for weeks to them about this they determined that since they were "free" with the handsets they wouldn't refund anything.

To this date there is still no expiration on the outside of a prepay connection pack.

Richard rich.ms

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#64906 24-Mar-2007 19:27

paradoxsm: Gold mobile came out in about 1998, it pretty much killed off Freedom, Offered the same deal as Freedom in the early years. Telecom took over it in about 2005, Then it pretty much vanished altogether after a flurry of price changes.

Oh yes... It was a bit before 2005. Around 2004. Guess who wrote the technical specification, coded the programs and loaded the accounts and balances into the VSP?