Is Telecom struggling to get customers onto XT?

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

langi27

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#38321 28-Jul-2009 10:00

Far be it from me to point out the obvious,

http://www.stuff.co.nz/business/industries/telecoms-it-media/2582022/Telecom-XT-draws-100-000-to-network

Stuff.co.nz is reporting XT has only signed up 100,000 customers of its 2 million+ customer base, since its launch 5 weeks ago. About 5% give or take as a rough estimate. (maybe more now its 3 weeks after the article).

This is a terrible run rate if you ask me.

If I had just spent $500 Million on a brand new network, I'd want as many people to start using it as possible, even if that meant giving away free sim cards, forcing people off the CDMA network, better pricing plans, whatever, it doesn't matter. Telecom has the power to cancel contracts or at least move existing one across.

The reason I wanted to bring this up is that I see 2Degrees have already signed up 50,000 potential subscribers in 2 weeks, and they haven't even launched yet. Maybe it’s just the fact us kiwi's love free stuff, and the 50,000 may only end up being 25,000 real customers at the end of the day. But I get the underlying feeling Telecom have dropped a pretty big and expensive ball.

When Telstra moved to WCDMA-850 they forced everyone across within 12-15 months, sure some people were unhappy but overall they did what they had to keep their customers.

So I guess the discussion is - Has Telecom dropped the ball buy not doing enough to get customers onto XT, and how much market share are they going to lose to 2Degrees and perhaps Vodafone?

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BDFL - Memuneh
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#239577 28-Jul-2009 10:13

Interesting topic... It's a though time for all mobile players. Vodafone Group PLC reported that Vodafone New Zealand gained only 9,000 new customers in the last quarter. This is net of course which means they could have lost [x] to Telecom and gained [x + 9,000] from Telecom.

2Degrees might have collected a wealthy 50,000 names and addresses where to send its SIM cards to, but they will need paying customers. So the question will be really "how many of those 50,000 SIM cards will convert into paying customers after the $5 free credit runs out?"

I'd say Telecoms' 100,000 sign ups on XT Network are a mix of people moving from CDMA and people moving from Vodafone.

Should they be faster in their acquisitions? Yes I agree. But do people really care about 3G? Not unless you're using mobile data I'd say. Voice calls and SMS work just as well on any other network, so no reason for some to move really.

So, 100,000 people, mainly early adopters is not bad. Vodafone tells me they have about 500,000 conneced to their 3G network now . I'd say mainly people who bought 3G mobile devices for data and other services such as music downloads. IF you just want voice calls and SMS you wouldn't pay more for a 3G handset. Really.

Time will tell. But yes Telecom should accellerate it while they can.

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langi27

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#239589 28-Jul-2009 10:29

To me it seems a no-brainer that if your having an ok experience on CDMA, with what is probably a dated and featureless CDMA handset, then you'd have an even better experience with an XT handset, surely Telecom want to (force) get them enjoying the new XT experience as soon as possible. Before they get a free taste of 2Degrees.

If you only use your phone for voice and sms then you are exactly the type of person Telecom want on their XT Network, the theory being you have still to discover the other aspects of 3G, mobile data, online activities, video calling (not that anyone uses video calling) and new phone features like good quality digital camera, GPS, MP3 Audio, Podcasts and games etc.

I just don't think they are doing enough, especially at a time when 2Degrees is champing at the bit to take telecom customers off them for little to no effort, and they haven't even announced a launch date yet.

wellygary

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#239603 28-Jul-2009 10:48

To be frank I would have thought that the last thing Telecom want is 500,000 customers wanting to sign up to XT in the opening 6 months.

It causes all sort of logistical problems, as well as likely degrading the customer experience with slower speeds, waits for hardware etc,

XT is a slow burner for T/Com, and I am sure that pushing customers will come which I would expect to get done first by reducing the range of handsets availabel for their CDMA network, and making XT appear as the default solution.

With a highly saturated market, its takes time for churn to build up.

The first thing you need to do is make sure that customers know that your new Network exists, which is what the current media plan is doing, the next step is to get existing customs to move across, and this take time.

allstarnz

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#239605 28-Jul-2009 10:49

I think a few people are hanging out to see what 2 Degrees has to offer.... know a few around these parts like that.

There is a wide expectition around here that prices will drop as a result of 2 Degrees coming in to the market. I suspect a few are waiting to see how the lie of the land is after these predicted price drops.

I'm currently on Voda, will go to XT once i buy out of my contract.

I suspect the lack of movement from CDMA to XT may be for some of the compulsive texters who are unwilling to move from their $10 TXT 2000 plans. They are unwilling to stump up more for the XT text plans.

tr3v

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#239609 28-Jul-2009 10:54

"If it ain't broke, don't fix it."

Maybe if I was wanting to upload (or download) lots of multimedia files then I may feel differently, but right now, I have no idea why I would want or need to change.

caldazar

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#239849 28-Jul-2009 17:59

100,000 in 5 weeks seems like a good amount.

Lets say for example that they can maintain this conversion rate (whether from Vodafone or CDMA is another discussion).

In 52 weeks, XT will have 1,040,000 customers.

In 2 years, they have 2 million customers... not too bad at all. Obviously it won't be that easy but I think 100,000 is quite a good start.

I'm sure Telecom will be competitive when they need to be - in fact, as it is a new network, they probably are better off making higher profits on new customers now (recouping costs) and then wait it out for the price war to begin rather than starting it now themselves.

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Wade

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#239868 28-Jul-2009 18:34

I have to say from my (probably ignorant) viewpoint i am very surprised TCNZ have not tried harder to lure more CDMA users across to XT. My being on CDMA means i need to invest in hardware to change networks, an expense i could do without hence i will fence sit until a suitable deal comes up and then lock in, I am 100% happy with service received so far from Telecom however quite simply i will change to the provider that gives me the best overall deal in the upcoming months, i'm cheap, i can be bought :P

ajobbins

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#239885 28-Jul-2009 18:59

I believe most will likely change when the time comes to upgrade or replace their current handset. People arent going to fork out for a new phone when their current one is still serving it's purpose. Much like when they lauched the CDMA network, it will take time for people to be convinced to change.

As far as I am concerned, 100,000 so far is bloody good progress. The rest will come in due course.

I do notice there are still plenty of CDMA handsets for sale in Telecom stores tho, if they want to speed up uptake, they should start phasing these out ASAP. I would say they will try and sell of existing stock and leave it at that.

Loftus

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#239890 28-Jul-2009 19:04

langi27: To me it seems a no-brainer that if your having an ok experience on CDMA, with what is probably a dated and featureless CDMA handset, then you'd have an even better experience with an XT handset, surely Telecom want to (force) get them enjoying the new XT experience as soon as possible.

I would have thought trying to force your customer base to do anything is a recipe for unhappy customers. I agree with having incentives to lure people across, but Telecom is probably fully aware that now that if they try to force migration of CDMA customers before they are ready, some of them may end up on a competitor's network instead.

tardtasticx

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#239942 28-Jul-2009 21:19

I think the reason they arent doing so well, is because of the interesting bands they chose to run the network on (850/2100) and not to many people would be willing to choose a new phone because most of those phones cost over $200 atleast wheras vodafone ones can cost as little as $90. But like everyone else is saying, 100,000 isnt too bad, but if 2 degree's actually keeps those 50,000 customers, then they should be ahead of telecom after launch I think, and because it would be so easy for people to switch, they should gain quite a few customers. thats just my opinion anyways

NonprayingMantis

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#239959 28-Jul-2009 21:58

100,000 paying customers sounds pretty healthy to me.

to compare it to 50,000 non-paying customers (the 2degrees Chinwaggers) seems, well, a little silly IMO.

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bjhoogs

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#239968 28-Jul-2009 22:16

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.

I have made the switch from cdma to xt and in my case telecom stood to gain far more from keeping me on cdma. The casual data rate on cdma was far more expensive, the off net text plans were less flexable, and call charges were rounded to the next minute, all of which means I will spend less on xt. I also now own a gsm handset (which wasn't purchased from telecom) which means I can easily switch to 2 degrees, or vodafone without buying a new handset.

sinner

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#240012 29-Jul-2009 07:58

Alternatively, most of the people who could upgrade (whether actual upgrade or new connection) may have done so. The rest of the base on Telecom may not be in a position to do so right now.

The economy is still hard and I would say a significant amount of people may not have the means to spend money on a new phone. Bearing in mind that, overall, XT handsets are more expensive than the old CDMA range.

Farzan

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#240449 30-Jul-2009 08:53

Isnt it true that XT and Vodafone coverage both drop in certain areas, especially when passing by the opposition cellsites? I cant wait to see what the new 2degrees comes up with, anything would be better than Tcom or VFone

xlinknz

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#240472 30-Jul-2009 09:30

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

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