Telecom 025 Closure

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sbiddle

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#10979 23-Dec-2006 08:30

Interesting to see on Stuff today http://stuff.co.nz/3908575a13.html regarding the 025 closure

"Mr Love said about 50,000 customers still had 025 numbers. Most were pre-pay customers and most were recording less than one call in or out a month.....Telecom said it was not offering to replace old phones, however, it would transfer unused credit to landline or other Telecom accounts."

I wonder how this will go down if challenged in court? If you are an on account customer you don't have credit to transfer. If you are a PrePay user using less than 1 call per month then I think there are going to be some pretty annoyed people who will have to fork out for a new phone. Most of them are probably 8+ year old $49 Philips Isis's sitting in gloveboxes for emergencies and when people purchased them there was certainly no warning that the network would simply shut down one day.

juha

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#56218 23-Dec-2006 09:25

Telecom's been saying for three years now that it will kill off 025...

Juha

johnr

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#56219 23-Dec-2006 09:30

What else can Telecom do?

juha

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#56220 23-Dec-2006 09:32

Dump 027 because as enny fule nose, CDMA is dead technology?

Juha

sbiddle

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#56221 23-Dec-2006 09:39

juha: Telecom's been saying for three years now that it will kill off 025...

I know that. But do people have an expectation that they will be given a new phone once the 025 network closes down? They were not told when they purchased the phone that it would only have a finite life before it would become obsolete.

I don't actually agree that Telecom should give their customers new phones and the customers who are still on 025 are extremely low value customers that they don't be making any money off but not doing so is certainly going to create a lot of bad PR much like the whole phone card saga and does leave Telecom open to legal action which would certainly result in significant costs.

grant_k

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#56223 23-Dec-2006 09:48

sbiddle: They were not told when they purchased the phone that it would only have a finite life before it would become obsolete.

ANY phone you buy has a finite life before it becomes obsolete. In fact, ANYTHING electronic for that matter!

antoniosk

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#56225 23-Dec-2006 09:56

sbiddle:
juha: Telecom's been saying for three years now that it will kill off 025...

I know that. But do people have an expectation that they will be given a new phone once the 025 network closes down? They were not told when they purchased the phone that it would only have a finite life before it would become obsolete.

I don't actually agree that Telecom should give their customers new phones and the customers who are still on 025 are extremely low value customers that they don't be making any money off but not doing so is certainly going to create a lot of bad PR much like the whole phone card saga and does leave Telecom open to legal action which would certainly result in significant costs.

Hmm, i disagree. Closure of anything looks bad, but Telecom has been making reasonable best efforts to contact customers and let them know of closures, as well as running cheap upgrade campaigns. But as you've pointed out previously, if it's an unregistered prepay phone left in the glovebox and never switched on, how do you contact the customer?

There was also a suspicion many were on boats around the country, only switched on once a year at best.

The bad press will come from $4bn company can't even give away cheap phones etc....

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alasta

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#56231 23-Dec-2006 11:35

sbiddle:I don't actually agree that Telecom should give their customers new phones and the customers who are still on 025 are extremely low value customers that they don't be making any money off but not doing so is certainly going to create a lot of bad PR much like the whole phone card saga and does leave Telecom open to legal action which would certainly result in significant costs.

I believe that Telecom has done everything that they could reasonably be expected to do in terms of providing notification and assisting customers to migrate to 027, but you can bet that the anti-Telecom brigade will kick off a whinging campaign anyway.

johnr

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#56236 23-Dec-2006 13:49

I also remember seeing full page newspaper ads also advising about this

I think TCNZ have done a great job

DKS1DR

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#56440 27-Dec-2006 22:21

antoniosk:

The bad press will come from $4bn company can't even give away cheap phones etc....

Now remember, the govt. wiped out over half that in a couple of days not so long ago....

Insert witty remark here!

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#56444 28-Dec-2006 07:14

DKS1DR:
antoniosk:

The bad press will come from $4bn company can't even give away cheap phones etc....

Now remember, the govt. wiped out over half that in a couple of days not so long ago....

What is your point? The share price is now where it was in March before the LLU announcement. Many people would argue that therefore the LLU announcement has had no long term impact at all on the share price. Telecom's lowest point of the year was not after the LLU announcement but after their financial results where announced.

ockel

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#56455 28-Dec-2006 08:56

Seriously off topic but I have to disagree with that statement! Share price was at $5.55 immediately before the leak of the cabinet papers. It has not recovered to anywhere near those levels. In fact it hasnt even breached $5.00 since that time.

The low of ~$3.95 was on or around 21 August which was 2 weeks after its FY06 results. Stock rallied pre-result and drifted thereafter - possibly as international investors digested the result and decided that regulatory risk for NZ Inc was less palatable than elsewhere in the world.

And for the record there is a much greater likelihood that the rise in TEL's share price is due to the global rally in the telecommunications sector. There is no doubt, IMHO, that the cabinet papers and subsequent regulatory review destroyed significant shareholder wealth following the announcement. It would be naive to argue that the LLU decision has had or will have no long term impact on the share price.

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juha

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#56458 28-Dec-2006 09:24

Likewise, it's naïve to assume that the AAPT fiasco, with a total of $1.3 billion in write downs, which saw Telecom report a $435 million loss in August, had no effect on the TEL share price.

But seriously, this is going way off topic and it's been debated to death already.

Juha