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Topic # 58713 17-Mar-2010 15:25
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Wasn't sure where to put it but since Vodafone seems to have more on-net pricing options than our other 2 players I thought I'd start here.

Open question and discussion about on-net pricing and what effect it has on pricing - is it good for consumers or bad for consumers?

What can we learn from overseas experiences?

I use Vodafone and XT in conjuction on two phones - one for data and one for voice and TXTs. However I anticipated heavier than usual TXT usage this month so utilised the "TXT150" plan on XT for $6 for the first time since I joined.

All of a sudden I found myself in a situation where friends were reluctant to contact me because I was suddenly "off-net". I told my friend (who is on Vodafone post-paid and has TXT2000, as well as free calling minutes to VF mobiles) that he was welcome to call and TXT me on my Vodafone phone so as not to pay additional costs, and I would just continue to TXT him from the XT phone.

Ironically he doesn't even use a few hundred TXTs each month and was not aware of the TXT600 add-on for all-networks.

He wasn't the only friend in such a position, and eventually my friends decided that I could still be friends with them because I had a Vodafone phone that they could contact me on (cheaply).

Which lead me to wonder - does this on-net pricing help consumers? Sure it means that husbands and wives can have a hotline to each other, but does that really encourage lower prices? Or is Bestmate and on-net pricing simply going to drive a culture of unusual usage patterns in NZ? Much like the way NZers usually TXT rather than call because of the history of disparity between very cheap TXTs but very expensive calling?

Now that we are so used to this TXT culture it seems impossible to turn it around. Will on-net pricing go the same way such that NZers would complain if they are no longer able to call their husbands and wives constantly for one low fixed cost?

I would be interested to know more Laughing

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  Reply # 308340 17-Mar-2010 15:40
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To answer your question somewhat indirectly ... I can relate my own recent experience.

In the last month I have dived headlong into the smartphone world (in the form of a Nexus One). As approximately 50% of the people I have previously TXTed also have smartphones I am now electing to skype(chat)/IM/twitter/{insert your app of choice} whenever possible as they are. I find this to be a better experience than TXT. Correspondingly I find my TXT usage patterns have dropped significantly so that I am almost at the tipping point where I am better to spend money on an upgraded data plan at the expense of a TXT plan.

Ok, so thats a bit long-winded, and yes, its just my experience (extrapolated over a very short sample so far), but my point is, as the costs of data drop in the future as they are bound to (2D dont even have an on-account data plan yet), and more people go down the smartphone route (as is predicted by pretty much any media/comms commentator you care to mention), then isn't TXT going to die a natural death anyway?

In which case on-net/off-net becomes somewhat irrelevant as we transition towards IP delivery of textual information?

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  Reply # 308377 17-Mar-2010 16:46
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I hate these on-net only deals. I want to contact anyone anytime and not have to think about what network they use, I also don't want to pay a fortune if they happen to be on a different network.

That being said I don't think it is fair to say it is anti-competitive as many people love them.



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  Reply # 308392 17-Mar-2010 17:15
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DeroyBoy: That being said I don't think it is fair to say it is anti-competitive as many people love them.

Just to make to clear, I'm not accusing Vodafone or any network of anti-competitive behaviour. I'm just curious as to whether people can give me an idea based on overseas models/data whether favourable on-net pricing hinders general price competition or encourages it (or is price-neutral) in the long term.

It was never a problem when I just stuck to the Vodafone mobile because Telecom don't have a lot of on-net differentiation (aside from their Favourites/Bestmate equivalent). TXTs and calls from Telecom generally seem to be flat-rate. However that's not as much the case with Vodafone, which is how I struck upon this "issue". 

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  Reply # 308398 17-Mar-2010 17:26
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ahmad:
DeroyBoy: That being said I don't think it is fair to say it is anti-competitive as many people love them.

Just to make to clear, I'm not accusing Vodafone or any network of anti-competitive behaviour. I'm just curious as to whether people can give me an idea based on overseas models/data whether favourable on-net pricing hinders general price competition or encourages it (or is price-neutral) in the long term.

It was never a problem when I just stuck to the Vodafone mobile because Telecom don't have a lot of on-net differentiation (aside from their Favourites/Bestmate equivalent). TXTs and calls from Telecom generally seem to be flat-rate. However that's not as much the case with Vodafone, which is how I struck upon this "issue". 


Sorry I didn't mean to suggest you were accusing anyone of anything. Just stating my own opinion.



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  Reply # 308406 17-Mar-2010 17:38
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It's ok :) I was just clarifying my comments in case they were to be taken the wrong way :) No worries :)

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  Reply # 308417 17-Mar-2010 18:11
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I got an earful from someone for "screwing them over" by having an 021 number on telecom and costing them serveral dollars when they were texting me meaningless bull that I would rather have not recived.

I dont give a crap if you can only text on net for cheap, That is your problem with choice of telco and plan, not mine.




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Reply # 308449 17-Mar-2010 19:51
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The bottom line is that all Telco's are in competition to get you to spend your Hard earned money with them. The other thing is that all companies cannot be all things to all people. I believe that the market is competitive with a variety of companies market a range of plans to suit all people, contrast this with the situation of a few years ago where Vodafone and Telecom plans were virtually mirror images of each other.

At the end of the day if you don't like the plans offered by a company you can move to a company who's plan you do like. That is competition

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  Reply # 308450 17-Mar-2010 19:52
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richms: I got an earful from someone for "screwing them over" by having an 021 number on telecom and costing them serveral dollars when they were texting me meaningless bull that I would rather have not recived.

I dont give a crap if you can only text on net for cheap, That is your problem with choice of telco and plan, not mine.


That person better get used to having to pay for off net texts, mobile prefix number means nothing today!

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  Reply # 308496 17-Mar-2010 21:55
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Having to consider on and off net pricing is annoying.

It's definitely a real barrier to changing network, it gives a (perverse) incentive for a customer to be on the same network as friends and family.

However not illegal currently as far as I know so therefore it's actually smart marketing.






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  Reply # 308498 17-Mar-2010 21:56
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With all the talk about MTRs, has favourable on-net pricing ever come under the scrutiny of our telecommunication watchdogs?

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  Reply # 308601 18-Mar-2010 08:32
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Ironically the history of cheap on net calling started with new providers in established countries who offered deals with lots of included on-net calls so they would hopefully take friends with them when they moved networks.

When I was in the UK in 1998 you could get plans on one2one that offered (from memory) around 3000 minutes per month of on net calling. It's now become commonplace around the world and you've only got to look at the recent announcement in Australia where YHA announced a myriad of new plans on both Vodafone and 3 that offer unlimited calling to other on net phones every month.

Even if MTR costs were 1c per minute it would still be cheaper to call an on-net customer than one off-net. I don't see it as being anti competitive but I do have issues with the fact it shows how cheaply a provider can deliver on-net calls for to some customers and yet sting other customers significantly more for an on-net call just because they don't have this person as a "friend".

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  Reply # 308766 18-Mar-2010 14:27
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I love Vodafones BESTMATES and FAMILY addons, they let me call and text the people i communicate with most as much as I like and i don't need to worry about the cost.

None of the people in our Family addon will leave Vodafone because then the rates for calling each other will no longer be free. This is exactly why Vodafone offer unlimited on-net calling/txting offers and why not? It sure works!

Is this anti competitive though? Of course it is...

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  Reply # 308770 18-Mar-2010 14:34
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On-net deals are fine when you are not in a monopoly or dominate player position. When you are such a big player in the market then deals such as these are anti-competitive because they erect a barrier to entry for the competition.

Whether or not you consider Vodafone's market share to be big enough to be considered a monopoly or dominant is another question altogether.


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  Reply # 308773 18-Mar-2010 14:35
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friedCrumpet: On-net deals are fine when you are not in a monopoly or dominate player position. When you are such a big player in the market then deals such as these are anti-competitive because they erect a barrier to entry for the competition.

Whether or not you consider Vodafone's market share to be big enough to be considered a monopoly or dominant is another question altogether.



That's exactly right, no one in our Family addon can join 2degrees directly because of the cheap on-net calling offered by Vodafone.

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  Reply # 308793 18-Mar-2010 15:21
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simon14:
Is this anti competitive though? Of course it is...


In exactly what way?

How is Best Mate or Family either reducing or preventing competition in the marketplace?

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