Is Telecom struggling to get customers onto XT?

Forums › Spark New Zealand (including Skinny and BigPipe) › Is Telecom struggling to get customers onto XT?

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#240481 30-Jul-2009 09:49

xlinknz:
freitasm: Interesting topic... IF you just want voice calls and SMS you wouldn't pay more for a 3G handset. Really.

Exactly

1. Mobile data charges in NZ are excessive and personally put me right off
2. I would argue 90% of use [if not more] of most peoples mobiles is calls and sms
3. Judging by the plethora of expensive handsets I't seems the Telcos make a lot of money selling handsets rather than new connections. [I'd be interested to know how much]
4. 'Geeks' aside most people have pretty plain non 3G handsets imho for every $500+ handset there are twenty <$200 handsets if not more

That said I hope 2degrees brings a fresh perspective to the market. Good on them for no contracts !

I'm still waiting on my $5 SIM LOL

Anyhow does XT need new customers ? I'm sure at somestage TCNZ will migrate all their CMDA customers to it

Not sure abut the other points, but from what I have read most Telcos (including NZ ones) subsidise handsets, even off contract ones. IOW, every handset they sell they lose money on (although there are probably a few exceptions where they source their own branded handsets from cheap chinese manufacturers) in the hope that they make it back through calling data etc revenues fromt he person who buys it.

If you are interested you could probably check this by looking through the Telecom Annual report. see if the handset revenue is higher or lower than handset cost of sales. (although it might not go down to that level of detail)

richms

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#240512 30-Jul-2009 10:48

Yeah, so their subsidized $1500 N85 is costing them money when compared to a $740 N85 bought outright from another place with no subsidy? Pull the other one....

Richard rich.ms

xlinknz

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#240523 30-Jul-2009 11:09

NonprayingMantis: Not sure abut the other points, but from what I have read most Telcos (including NZ ones) subsidise handsets, even off contract ones. IOW, every handset they sell they lose money on (although there are probably a few exceptions where they source their own branded handsets from cheap chinese manufacturers) in the hope that they make it back through calling data etc revenues fromt he person who buys it.

If you are interested you could probably check this by looking through the Telecom Annual report. see if the handset revenue is higher or lower than handset cost of sales. (although it might not go down to that level of detail)

Well imho over the last 10 years handsets have got expensive, I'm sure there was a time when there were few handsets were $500+ let along $1K+, the price seems to have gone up and up like any fashionable accessory does

Furthermore I read somewhere the Vodafone CE in the UK stating that market saturation [connections] was at a point where the business was in new handset uptake !

sinner

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#240562 30-Jul-2009 12:48

xlinknz:

Well imho over the last 10 years handsets have got expensive, I'm sure there was a time when there were few handsets were $500+ let along $1K+, the price seems to have gone up and up like any fashionable accessory does

Furthermore I read somewhere the Vodafone CE in the UK stating that market saturation [connections] was at a point where the business was in new handset uptake !

Phones are now much more than just mobile phones though (wifi, bluetooth, mp3, video, camera etc etc)

richms

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#240581 30-Jul-2009 13:28

paid like a grand for a motorola 550 flip that had 10 or 20 speed dials, a battery meter that you had to press function-4 to see (and was always wrong) - a standalone charger that looked like a shoe and took all night and most of the next day to charge a big battery, and its only features were ringer volume and run flat mid call.

Can get so much more for $70 nowdays its not funny. BS to them getting more expensive.

Richard rich.ms

sinner

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#240584 30-Jul-2009 13:39

And the very first generation of mobile phones were in the thousands of dollars and were more basic than the Motorola. If your talking about the history of mobile phones, then the phone now are cheaper.

However, if you look at the devices that were available a year ago (at least in NZ on the Telecom range), the phones coming out now have features that were not present then and prices have gone up. Manufacturing costs, freight costs, supply chain costs (once the phone lands) have also all gone up. That all impacts on the cost of the phone. I don't see a problem either way.

langi27

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#240585 30-Jul-2009 13:41

bjhoogs: Telecom has committed to keeping the cdma network going til 2012 so why would they be uncomfortable with people using it.

They stand to gain far more by using XT to lure customers accross from Vodafone than they do by shifting customers from one network to the other.

Its a known fact that CDMA technology is not being developed any further, the handsets are basic and lacks many features. I'd also bet that keeping the aging network alive is costing them millions in maintenance and running costs, for example Powering the CDMA base stations and airconditioning, old batteries, transmission that could be used for XT, rental from leases, Tower real estate that could be freed up for co-location or future LTE development. The list is huge.

Its not in Telecoms interest to keep CDMA going at all, and letting people hang around is worse than forcing them across to XT, even if that means giving them a new $100 cheap basic phones.

I agree that, its important for Telecom to sign on Vodafone customers, but this is always the case regardless of what network your running.

The point here is, are Telecom doing enough to get new and existing customers onto their network?,

In my opinion they are not. They will loose market share to 2degrees, and if they stuff around for 2 long they will also loose their existing CDMA customers.

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Wade

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#240587 30-Jul-2009 13:44

Have to agree with richms, I had a couple of run-out motorola cheapies on Telecom then moved across to Bellsouth in the mid 90's and moved up to a $1500 ericsson which had a clock and calculator built in. Iwould expect the $79 2D entry model Nokia will surpass this featurewise lol...

There would be few people who actually need any thing more than a $3~400 phone these days to cover all of their mobile needs

rugrat

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#240611 30-Jul-2009 15:07

For me not a big spender, so don't like the compulsory top up period.

Also their one rate could backfire as the on network costs are more expensive then cdma.

89 cents less discount vs 48 cents mate rates on cdma.

Sure after 1 minute charges by 1 second on XT, where as another 48 cents cdma, but after 2 minutes this is no advantage as call has all ready cost more then 48 cents on XT.

Once cdma shut down with current offers will have to put up with complusory top up period or go without moblie - see whats around, happening at that time.

bjhoogs

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#240647 30-Jul-2009 16:57

langi27:

Its a known fact that CDMA technology is not being developed any further, the handsets are basic and lacks many features. I'd also bet that keeping the aging network alive is costing them millions in maintenance and running costs, for example Powering the CDMA base stations and airconditioning, old batteries, transmission that could be used for XT, rental from leases, Tower real estate that could be freed up for co-location or future LTE development. The list is huge.

Its not in Telecoms interest to keep CDMA going at all, and letting people hang around is worse than forcing them across to XT, even if that means giving them a new $100 cheap basic phones.

The point here is, are Telecom doing enough to get new and existing customers onto their network?,

In my opinion they are not. They will loose market share to 2degrees, and if they stuff around for 2 long they will also loose their existing CDMA customers.

That CDMA is not being developed further is irrelevant. The handsets are in use, and meeting many peoples needs quite well. GSM uses old technology, should vodafone be forcing people onto it's 3g network?

High end CDMA handsets have many features that are not found on $100 GSM phones (camera, gps, etc) let alone a $100 WCDMA phone if such a thing even exists.

I don't doubt that there are big cost involved in operating two networks, however Telecom has committed to keeping the network alive until 2012, so they have to do so whether it is for 3 million or 1500 customers. The time will come to force the change then.

My point is that CDMA customers are on telecom's network and are paying customers, contributing to telecoms bottom line, so why upset them by telling them that they are using their phone wrong, and will have to buy a new one (or that their okta touch is outdated so have a free r6 on us.

matisyahu

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#240791 31-Jul-2009 00:23

I've moved from Vodafone to Telecom's XT Network because Vodafones is so utterly cruddy; I would be sitting with my laptop on a train and 90% of the time the best data signal I could get would be to a 15 year old GPRS tower with a cruddy data rate. Its about time Vodafone started to invest their inflated profits back into their network and provide a reasonable level of service instead of the joke that it is today.

With XT network so far, everything has been working great; strong signal where ever I go to in Wellington, fast data rates (although not cheap, it is cheaper than Vodafone prepaid and they actually support Mac's instead of pawning off ancient connection software as with the case of Vodafone), and a great array of phones which range from the 'bells and whistles' models to the basic one which I have - a Telecom R6.

I would say that what is holding back adoption is the recession where people are being frugal as to what they spend their money on and the fact that the communication from Telecom has been atrocious - I'd run out of fingers and toes if I counted the number of people who have asked me whether they would lose their existing number if they moved. Maybe Telecom should have spent more time focused on the meat and potatoes issues than 'speed' which affects only a small group of customers.

Edit: And what were Telecom thinking - who uses Bebo? honestly, who uses Bebo these days; Twitter and Facebook are the rage - not Bebo. Geeze, talk about management out with the fairies when they launched that service.

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

thegeekboy

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#240797 31-Jul-2009 00:58

Interesting topic. I think if the figure of 100,000 is right - then Telecom probably haven't done enough to get customers across to it - regardless of where they come from. Not an easy feat though. I'm with Vodafone with an iPhone - I get great coverage and speeds - and I have an inherent distrust of Telecom since their monopoly-days - so it's irrelevant for me. Both my parents have mobile phones with Telecom though - and for them - well - they just aren't interested. Their phones work just fine and they aren't too bothered about a "Newer faster network".
@bjhoogs - I think you make a very good point. i.e. Why spend money to lure customers when you already have them?
These are interesting times - and I am hoping that with the likes of 2degrees etc... the competition will heat up and this will mean better prices and deals for us as consumers.
@kawaii - don't be so quick to discount Bebo - regardless of FB and Twiitter - just because you don't mix with people who use Bebo doesn't mean that it's dead or unpopular.

On the "new network" aspect of this - Telecom Shareholders must be scratching their heads. Telecom has been through a number of network roll-outs and technology decisions - XT being the latest one. I imagine that this is a fairly expensive exercise. Choosing CDMA (way-back-when) has probably been costly for them too - Vodafone has probably been getting the lions share of roaming revenue for quite a while. But looking ahead, the next step will be LTE. AT&T are looking at 2010 to launch theirs - so it's not far away. Chasing this will be a consideration for Telecom and Vodafone - my guess is that it will be more painful for Telecom to do dollar-wise having spent so much on the XT roll-out.
More interesting times.

matisyahu

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#240799 31-Jul-2009 01:15

thegeekboy: Interesting topic. I think if the figure of 100,000 is right - then Telecom probably haven't done enough to get customers across to it - regardless of where they come from. Not an easy feat though. I'm with Vodafone with an iPhone - I get great coverage and speeds - and I have an inherent distrust of Telecom since their monopoly-days - so it's irrelevant for me. Both my parents have mobile phones with Telecom though - and for them - well - they just aren't interested. Their phones work just fine and they aren't too bothered about a "Newer faster network".
@bjhoogs - I think you make a very good point. i.e. Why spend money to lure customers when you already have them?
These are interesting times - and I am hoping that with the likes of 2degrees etc... the competition will heat up and this will mean better prices and deals for us as consumers.
@kawaii - don't be so quick to discount Bebo - regardless of FB and Twiitter - just because you don't mix with people who use Bebo doesn't mean that it's dead or unpopular.

On the "new network" aspect of this - Telecom Shareholders must be scratching their heads. Telecom has been through a number of network roll-outs and technology decisions - XT being the latest one. I imagine that this is a fairly expensive exercise. Choosing CDMA (way-back-when) has probably been costly for them too - Vodafone has probably been getting the lions share of roaming revenue for quite a while. But looking ahead, the next step will be LTE. AT&T are looking at 2010 to launch theirs - so it's not far away. Chasing this will be a consideration for Telecom and Vodafone - my guess is that it will be more painful for Telecom to do dollar-wise having spent so much on the XT roll-out.
More interesting times.

You do realise that WCDMA is 3G GSM:

http://en.wikipedia.org/wiki/W-CDMA_(UMTS)

And the upgrade to LTE will not require a major network overhaul. XT Network has put Telecom in a much better position than Vodafone when it comes to smooth updates and upgrades in the future - where a lot of the upgrades will not require massive re-investments.

"When the people are being beaten with a stick, they are not much happier if it is called 'the People's Stick'"

richms

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#240906 31-Jul-2009 11:53

thegeekboy: I'm with Vodafone with an iPhone - I get great coverage and speeds

Would love to know how... People I know with iPhones on vodafone get gprs constantly.

Richard rich.ms

ronindanbo

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#240920 31-Jul-2009 12:20

NonprayingMantis: from what I have read most Telcos (including NZ ones) subsidise handsets, even off contract ones.?

I can confirm that, in fact they make quite a loss from initial sales, the way they make proffit is the provisioning of services such as text, downloadable content etc.

The biggest activity on cell phones in New Zealand is Texting, I remember when Telecom bought in Push to Talk which was a disaster we had to give it away just to get people to use it as texting was better (in the US Push to Talk is a popular function with Cells where Texting isnt so popular so Telecom marketers got that one majorly wrong).

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