Telecom probably cut it very finely, it's largely to capitalise on exactly the marketshare issues referenced earlier in this thread. Theyre trying to keep the 'critical mass' of Telecom customers who can unlimited-txt eachother.
tardtasticx: But if Telecom can do it, then why not Vodafone? Vodafone has a bigger market share and would make more money than them wouldn't they?
Because they don't need to. They have the lions share of high value customers so why cut your own revenue and margins to gain more lower value customers and drop the ARPU of your existing base? Doesn't make commercial sense. Its almost always the company who have little to lose that offer the "loss leader" pricing to gain share...just look at the cut price airlines, classic example.
But in terms of MTR it effectively becomes a zero-sum game?
There was an excellent discussion or article on this which I need to find. Telecom is leveraging the idea that every text gets a reply. So (for argument's sake) a Telecom customer texts a Vodafone customer. VF charge TNZ 9c to receive this text. The VF cust then replies and TNZ charges VF 9c to receive this text. Net = 0 for both carriers.
tardtasticx: But if Telecom can do it, then why not Vodafone? Vodafone has a bigger market share and would make more money than them wouldn't they?
Because they don't need to. They have the lions share of high value customers so why cut your own revenue and margins to gain more lower value customers and drop the ARPU of your existing base? Doesn't make commercial sense. Its almost always the company who have little to lose that offer the "loss leader" pricing to gain share...just look at the cut price airlines, classic example.
From the statistics I've seen refered to elsewhere here on geekzone that I'm too lazy to dig up again I thought it was Telecom which had the high value customers, not Vodafone. Vodafone's customer base is weighed towards prepay...
So if by 'they' which following the conversation I believe you do, then your argument makes little sense. (feel free to prove me wrong :-)
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zkcow: But in terms of MTR it effectively becomes a zero-sum game?
There was an excellent discussion or article on this which I need to find. Telecom is leveraging the idea that every text gets a reply. So (for argument's sake) a Telecom customer texts a Vodafone customer. VF charge TNZ 9c to receive this text. The VF cust then replies and TNZ charges VF 9c to receive this text. Net = 0 for both carriers.
Yeah but if that that equation HAS to be neutral 100% of the time to have ZERO benefit. It it slips to 5-10% difference, it can quickly add up to hundreds of thousands of dollars, and now with multiple SIM, it may go TNZ~VFNZ then 2D~TNZ which certainly does not offset each txt, which blows that theory out of the water.
tardtasticx: But if Telecom can do it, then why not Vodafone? Vodafone has a bigger market share and would make more money than them wouldn't they?
Because they don't need to. They have the lions share of high value customers so why cut your own revenue and margins to gain more lower value customers and drop the ARPU of your existing base? Doesn't make commercial sense. Its almost always the company who have little to lose that offer the "loss leader" pricing to gain share...just look at the cut price airlines, classic example.
From the statistics I've seen refered to elsewhere here on geekzone that I'm too lazy to dig up again I thought it was Telecom which had the high value customers, not Vodafone. Vodafone's customer base is weighed towards prepay...
So if by 'they' which following the conversation I believe you do, then your argument makes little sense. (feel free to prove me wrong :-)
Thats what the conversation is about, prepay. do you think On Account holders worry about off-net vs on-net txts? I certainly dont as all my txts cost about 8c regardless of who they go to . For prepay, VFNZ has the highest ARPU, followed by 2D, then TNZ waaay down the bottom, so why would VFNZ want to pick up the bottom of the barrel users who are always after the cheapest txt deal, and want to limit their spend to $10/m.
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