The Telco Levy and Vodafone

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gregmcc

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Topic # 191491 5-Feb-2016 17:53

As most people know a lot of the ISP's are paying their share of the Telco Levy of $50Million

This levy is used to provide funding for uneconomic cell sites/broadband coverage amongst other things, a good idea I think.

I don't know what other ISP's are doing but VF are passing this on to their customers, not a big deal, someone has to pay for it, in this case VF charge each customer $0.99 per month incl GST ($0.85 before GST)

I thought I would run some number on this as VF claim:-

"Isn’t this just a way of increasing Vodafone’s profit?

No, this contribution is to help manage this increase in expected costs and to make these costs more transparent to our customers."

Running some quick sums, from VF's web side they claim 2.5million customers

2,500,000 x $0.85 x 12 = $25,500,000.......$25.5 million

So how much is VF share of the Telco Levy?

From the Commerce Commission, Final liability allocation determination under sections 87 and 88 of the Telecommunications Act 2001 for 1 July 2014 to 30 June 2015 [2015] NZCC 34

Pager 6, has a table , VF's share $13,791,711.50

So it seems VF are making $11,708,289, off this levy.

This can't be right you say, Most likely isn't exactly right as the number of customers are in flux.

I've been trying for several weeks to get some figures from VF that prove my calculations wrong, I've been lied to (Customer retention team told me that the ComCom set's the $0.99/per customer/per month fee, the ComCom have denied this).

I could understand if things didn't work out exactly, as it would be near on impossible to calculate as customer numbers constantly vary, but a ball park figure would be close enough, $11.7 million is no where close.

So I'm putting it out the for public comment, Vodafone, tell your customers how you arrive at this figure.

We can on make calculations based on what we can find out, give us some accurate figures

People who are with other ISP's, post here what you are been charged per month, is your ISP overcharging you?

Oh and by the way, I know VF can't do maths, they claim $0.85 +GST is $0.99, well it's not, It's $0.9775, 98 cents for the sake of rounding to the nearest cent.........

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Reply # 1486148 5-Feb-2016 18:00

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I believe not all vf customers are being charged the fee. Only 'on account' customers and fixed line. not prepaid customers.

So if vf has roughly 1.2m prepaid customers, then the number works out about right.

networkn

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Reply # 1486150 5-Feb-2016 18:08

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Seriously? You don't think the customers of all those OTHER ISP's are paying for the Telco Levy? Of course they are, where do you think ANY business gets it's money from? It's customers.

They might not be as open about it, but make no mistake, if you aren't a VF customer, you are still paying the levy, it's just not itemised as such on your invoice.

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Reply # 1486151 5-Feb-2016 18:10

sounds plausible, but this is just a wild stab in the dark.

sbiddle

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Reply # 1486170 5-Feb-2016 18:14

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Not every Vodafone customer is being passed on this levy. I'm too lazy to use Google but it's safe to say around 60% of Vodafone's mobile customer base is on Prepay and won't pay this so you can assume that number will drop to roughly 1 million customers paying 85c

gregmcc

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Reply # 1486171 5-Feb-2016 18:16

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networkn:

Seriously? You don't think the customers of all those OTHER ISP's are paying for the Telco Levy? Of course they are, where do you think ANY business gets it's money from? It's customers.

They might not be as open about it, but make no mistake, if you aren't a VF customer, you are still paying the levy, it's just not itemised as such on your invoice.

The point here is VF are making a point at putting this as a separate item on invoices, so it would be fair to be expected that they money they are collecting should be an accurate figure based on what they are paying to the ComCom

gregmcc

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Reply # 1486172 5-Feb-2016 18:19

sbiddle:

Not every Vodafone customer is being passed on this levy. I'm too lazy to use Google but it's safe to say around 60% of Vodafone's mobile customer base is on Prepay and won't pay this so you can assume that number will drop to roughly 1 million customers paying 85c

Most likely right, but i've been trying to get some figures from VF to prove (or dis-prove) that.......without some alternative figures from VF I can only use publicly available figures

gregmcc

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Reply # 1486174 5-Feb-2016 18:22

networkn:

Seriously? You don't think the customers of all those OTHER ISP's are paying for the Telco Levy? Of course they are, where do you think ANY business gets it's money from? It's customers.

They might not be as open about it, but make no mistake, if you aren't a VF customer, you are still paying the levy, it's just not itemised as such on your invoice.

Which part of my post implied/stated that OTHER ISP's aren't charging their customers?

Hammerer

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Reply # 1486201 5-Feb-2016 19:19

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gregmcc:

So it seems VF are making $11,708,289, off this levy.

...

I could understand if things didn't work out exactly, as it would be near on impossible to calculate as customer numbers constantly vary, but a ball park figure would be close enough, $11.7 million is no where close.

So I'm putting it out the for public comment, Vodafone, tell your customers how you arrive at this figure.

We can on make calculations based on what we can find out, give us some accurate figures

People who are with other ISP's, post here what you are been charged per month, is your ISP overcharging you?

I think that your posts will go down a lot better if you aren't so dogmatic with so little evidence based on more than one negative interpretation of Vodafone's behaviour. It is no surprise that we're reading your post as implying things that you may not have intended.

Your post reads for me as accusing Vodafone of overcharging or profiteering. The problem is that you use one shoddy estimate for the comparison and didn't even bother to give Vodafone the benefit of the doubt by using a more reasonable range of figures.

gregmcc:

Oh and by the way, I know VF can't do maths, they claim $0.85 +GST is $0.99, well it's not, It's $0.9775, 98 cents for the sake of rounding to the nearest cent.........

The way you put it implies overcharging but there's a good chance that it works the other way around with the 85 cents as the mistake.

The GST inclusive price is what is charged, i.e. $0.99, and that's the way it has to be accounted for to the IRD. The exGST figure doesn't really matter except, perhaps, that they don't mention the inclusive price for businesses. But I doubt that it makes any difference either because the contracts usually refer to pricing schedules which are not usually a press release or web page or FAQ:

https://www.vodafone.co.nz/telecommunicationslevy/

gregmcc

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Reply # 1486207 5-Feb-2016 19:32

Hammerer:

gregmcc:

So it seems VF are making $11,708,289, off this levy.

...

I could understand if things didn't work out exactly, as it would be near on impossible to calculate as customer numbers constantly vary, but a ball park figure would be close enough, $11.7 million is no where close.

So I'm putting it out the for public comment, Vodafone, tell your customers how you arrive at this figure.

We can on make calculations based on what we can find out, give us some accurate figures

People who are with other ISP's, post here what you are been charged per month, is your ISP overcharging you?

I think that your posts will go down a lot better if you aren't so dogmatic with so little evidence based on more than one negative interpretation of Vodafone's behaviour. It is no surprise that we're reading your post as implying things that you may not have intended.

Your post reads for me as accusing Vodafone of overcharging or profiteering. The problem is that you use one shoddy estimate for the comparison and didn't even bother to give Vodafone the benefit of the doubt by using a more reasonable range of figures.

gregmcc:

Oh and by the way, I know VF can't do maths, they claim $0.85 +GST is $0.99, well it's not, It's $0.9775, 98 cents for the sake of rounding to the nearest cent.........

The way you put it implies overcharging but there's a good chance that it works the other way around with the 85 cents as the mistake.

The GST inclusive price is what is charged, i.e. $0.99, and that's the way it has to be accounted for to the IRD. The exGST figure doesn't really matter except, perhaps, that they don't mention the inclusive price for businesses. But I doubt that it makes any difference either because the contracts usually refer to pricing schedules which are not usually a press release or web page or FAQ:

https://www.vodafone.co.nz/telecommunicationslevy/

I will quite happily stand corrected and offer VF the benefit of doubt if some one will provide some different figures that have some real world correlation, I've tried asking VF, they don't seem to want to justify them

BTW if you would have read a bit further down the page on the link you provided

"Why has Vodafone added this cost to my bill?

Recent changes across the telecommunications industry mean that from December, we will be applying a telecommunications levy contribution of 99c incl. GST (85c ex GST) per month......"

It does say 85c ex GST, either way VF can't do basic maths

networkn

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Reply # 1486211 5-Feb-2016 19:39

I will quite happily stand corrected and offer VF the benefit of doubt if some one will provide some different figures that have some real world correlation, I've tried asking VF, they don't seem to want to justify them

Your dislike of VF is well documented and known. In this country, unless rules have changed, we presume innocence until otherwise proven. Just because they won't explain it to YOU, doesn't make it incorrect. There are a lot of factors you haven't bothered to consider (conveniently) and a fair number of explanations that could exist.

If they are doing something wrong, and I doubt it, then they should be flayed, but realistically, would they really be doing something so obvious in such a public way?

freitasm

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Reply # 1486246 5-Feb-2016 20:42

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The latest report from Vodafone Group was released overnight (link).

New Zealand has 2,358 million mobile connections of which 38.8% are on account. There are also 413,000 fixed line customers.

There, some official numbers for you.

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Hammerer

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Reply # 1486259 5-Feb-2016 21:06

gregmcc:

BTW if you would have read a bit further down the page on the link you provided

"Why has Vodafone added this cost to my bill?

Recent changes across the telecommunications industry mean that from December, we will be applying a telecommunications levy contribution of 99c incl. GST (85c ex GST) per month......"

It does say 85c ex GST, either way VF can't do basic maths

I did read the whole page and I referred to the last part in more detail than your post, i.e. the difference between what it said for consumer and business customers. I included the link to make it easier for anyone else reading this thread, because you didn't.

I wouldn't be surprised if the 85c figure is a guess based on 15% off 99 cents.

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Reply # 1486270 5-Feb-2016 21:40

freitasm:

The latest report from Vodafone Group was released overnight (link).

New Zealand has 2,358 million mobile connections of which 38.8% are on account. There are also 413,000 fixed line customers.

There, some official numbers for you.

Glad someone has been able to point to some figures, This is the point when I admit I'm wrong

Why couldn't some one at VF have pointed this out to me??

networkn

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Reply # 1486271 5-Feb-2016 21:44

gregmcc:

freitasm:

The latest report from Vodafone Group was released overnight (link).

New Zealand has 2,358 million mobile connections of which 38.8% are on account. There are also 413,000 fixed line customers.

There, some official numbers for you.

Glad someone has been able to point to some figures, This is the point when I admit I'm wrong

Why couldn't some one at VF have pointed this out to me??

Maybe they didn't think it was justified?

I'm impressed you'll admit you are wrong, so many people on the internet won't do so, even under overwhelming evidence.

gregmcc

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Reply # 1486277 5-Feb-2016 21:56

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networkn:

gregmcc:

freitasm:

The latest report from Vodafone Group was released overnight (link).

New Zealand has 2,358 million mobile connections of which 38.8% are on account. There are also 413,000 fixed line customers.

There, some official numbers for you.

Glad someone has been able to point to some figures, This is the point when I admit I'm wrong

Why couldn't some one at VF have pointed this out to me??

Maybe they didn't think it was justified?

I'm impressed you'll admit you are wrong, so many people on the internet won't do so, even under overwhelming evidence.

On-line or in real life, if I'm wrong I'll put my hand up

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