Vodafone comments on mobile regulation

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#436940 8-Feb-2011 19:12

MikeSkyrme: Should cheaper wholesale rates not transfer directly to the consumer anyway?
I understand the current regulation is about opening up pathways to fair competition (at least I think that is the intent?), but the competition must surely be good for the end user of the products?

If you're still a Telcom Retail customer and paying 63c/m for mobile calling, then feel free to contact me off list and I'll sort you out to save some cash.

Telecom has higher costs than I do to service customers. For one they pay their CEO more than mine gets paid... oh, hold up, that's me. :)

A free open market needs to mean that Telecom has the right to keep its prices as high as it can/chooses to.

This is great for my business because I can offer customers a way to save some money and still make money.

D

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sbiddle

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#436948 8-Feb-2011 19:34

MikeSkyrme:Should cheaper wholesale rates not transfer directly to the consumer anyway?

Maybe it should, maybe it shouldn't.

Because wholesale rates have no relation to retail rates for mobile originated calls however however it becomes hard to dictate that a reduction in wholesale costs should lead to a reduction in retail costs.

MikeSkyrme

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#436950 8-Feb-2011 19:41

sbiddle:
MikeSkyrme:Should cheaper wholesale rates not transfer directly to the consumer anyway?

Maybe it should, maybe it shouldn't.

Because wholesale rates have no relation to retail rates for mobile originated calls however however it becomes hard to dictate that a reduction in wholesale costs should lead to a reduction in retail costs.

Hmmm....., ok,

Can we agree that if the wholesale costs are lower, the retailer then at least has the ability to pass on savings to the consumer?

Michael Skyrme - Instrumentation & Controls

DonGould

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#436954 8-Feb-2011 19:45

MikeSkyrme: Can we agree that if the wholesale costs are lower, the retailer then at least has the ability to pass on savings to the consumer?

Yes. And in fact some do. I only pay ~25c/m for calls to mobile and I can pay for a $10 package and get a bunch of discounted minutes.

Disclaimer: /me is a 2Talk reseller.

Edit: 21 c/min + GST (24.15 c/min inc GST) - http://www.2talk.co.nz/pages/newrates.html

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NonprayingMantis

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#436968 8-Feb-2011 20:04

sbiddle:
ahmad: Steve can you explain how that works please?

Quite simply fixed line carriers don't drop prices and absorb MTR increases. Why does it still cost 63c to call a mobile phone from Telecom? It cost 71c in the early when the network was launched and MTR rates were ~50c per minute, and dropped to 63c around 3 years ago despite the MTR cost having dropped from ~50c to ~17c in that time.

ah but surely it depends on what plan you are on. You have picked the most expensive option there is.

On total home I pay only 30c/min to call mobiles from my landline (to any network) and I have a $2 calling cap too for up to 2 hours. that's quite a bit cheaper than 63cpm.
If I make very long calls (i.e. use up the full calling cap of $2 for 2 hours) then I could be only paying an effective rate of less 2c/m

http://www.telecom.co.nz/totalhome/detail

so if prices back in the day were 71c across the board and MTRs have dropped ~33c and I am paying less than 30c (43c less than the old rate) then surely this means that Telecom have more than passed on the decline in MTR on this plan.

sbiddle

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#436969 8-Feb-2011 20:05

MikeSkyrme:
sbiddle:
MikeSkyrme:Should cheaper wholesale rates not transfer directly to the consumer anyway?

Maybe it should, maybe it shouldn't.

Because wholesale rates have no relation to retail rates for mobile originated calls however however it becomes hard to dictate that a reduction in wholesale costs should lead to a reduction in retail costs.

Hmmm....., ok,

Can we agree that if the wholesale costs are lower, the retailer then at least has the ability to pass on savings to the consumer?

For mobile originated calls? No. What happens if the retail cost of the calls is already less than the MTR? All 3 mobile networks in NZ offer pricing plans or addons that offer retail pricing below the MTR.

Fixed to mobile calls are a cost plus pricing model and if MTRs drop there is no reason why retail prices shouldn't drop by the same amount. Mobile originated calls aren't.

sbiddle

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#436970 8-Feb-2011 20:07

NonprayingMantis:
sbiddle:
ahmad: Steve can you explain how that works please?

Quite simply fixed line carriers don't drop prices and absorb MTR increases. Why does it still cost 63c to call a mobile phone from Telecom? It cost 71c in the early when the network was launched and MTR rates were ~50c per minute, and dropped to 63c around 3 years ago despite the MTR cost having dropped from ~50c to ~17c in that time.

ah but surely it depends on what plan you are on. You have picked the most expensive option there is.

On total home I pay only 30c/min to call mobiles from my landline (to any network) and I have a $2 calling cap too for up to 2 hours. that's quite a bit cheaper than 63cpm.

http://www.telecom.co.nz/totalhome/detail

so if prices back in the day were 71c across the board and MTRs have dropped ~33c and I am paying less than 30c (43c less than the old rate) then surely this means that Telecom have more than passed on the decline in MTR on this plan.

I picked the standard rate for calling a mobile phone. If you choose to buy an addon/plan option to reduce that it's fine, it doesn't change the fact the standard rate is still 63c.

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DonGould

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#436972 8-Feb-2011 20:12

sbiddle: I picked the standard rate for calling a mobile phone. If you choose to buy an addon/plan option to reduce that it's fine, it doesn't change the fact the standard rate is still 63c.

That really is a bit like my saying "My base fee is $6000 an hour but is you just click Here you can have me for free".

How many people are actually on those base prices these days?

Again, if you are then more fool you for just not caring. It's a bit like someone who chooses to do all their shopping at a dairy because they just can't be bothered walking next door to the supermarket.

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ahmad

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#436973 8-Feb-2011 20:12

Slightly off topic here but related.

What is the point of 2 Degrees "textmerace"?

Is it to make money (quite unethically it would seem to me given their MTR stance and then profiting from...MTRs) or to force down SMS termination rates?

It's quite funny that the report above says that 1c SMS rate was determined to deter SPAM which might happen at 0c - how does that work given how much (deliberate) SPAM the textmerace has generated at 9c?

MikeSkyrme

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#436974 8-Feb-2011 20:14

sbiddle: Fixed to mobile calls are a cost plus pricing model and if MTRs drop there is no reason why retail prices shouldn't drop by the same amount.

Now I am confused..... (even more than normal),

Does your statement not support regulation of MTR reductions?

Michael Skyrme - Instrumentation & Controls

ahmad

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#436976 8-Feb-2011 20:16

DonGould:
sbiddle: I picked the standard rate for calling a mobile phone. If you choose to buy an addon/plan option to reduce that it's fine, it doesn't change the fact the standard rate is still 63c.

That really is a bit like my saying "My base fee is $6000 an hour but is you just click Here you can have me for free".

How many people are actually on those base prices these days?

Again, if you are then more fool you for just not caring. It's a bit like someone who chooses to do all their shopping at a dairy because they just can't be bothered walking next door to the supermarket.

D

Until I signed up for Total Home I was paying the 63c. Heaps of people have the 63c rate. I never phoned/paid it but I'm sure many do. I would guess most people wouldn't go looking for a plan unless they really had a need, given that most plans incur minimum monthly commitments.

ahmad

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#436977 8-Feb-2011 20:18

MikeSkyrme:
sbiddle: Fixed to mobile calls are a cost plus pricing model and if MTRs drop there is no reason why retail prices shouldn't drop by the same amount.

Now I am confused..... (even more than normal),

Does your statement not support regulation of MTR reductions?

Pretty sure he is saying that MTRs don't have a direct impact on what is charged at retail to us. They play a part but if you reduce an MTR by 10c, that doesn't mean the wholesale/retail cost goes down 10c.

But for fixed to mobile, if the MTR goes down by 10c, then the effective wholesale cost of that call DOES go down by 10c because fixed to mobile is a "cost plus" pricing (ie. the cost of providing the fixed to mobile call, "plus" the MTR).

sbiddle

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#436981 8-Feb-2011 20:27

MikeSkyrme:
sbiddle: Fixed to mobile calls are a cost plus pricing model and if MTRs drop there is no reason why retail prices shouldn't drop by the same amount.

Now I am confused..... (even more than normal),

Does your statement not support regulation of MTR reductions?

I support MTR reductions. My point is that for mobile originated calls that there is absolutely no relationship between MTR costs and retail prices.

SaltyNZ

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#436986 8-Feb-2011 20:42

sbiddle: for mobile originated calls that there is absolutely no relationship between MTR costs and retail prices.

Frown: this statement makes my head hurt. MTRs are a wholesale cost to the carrier which are passed on to the retail customers. In the mobile to mobile world where, for the sake of argument, traffic costs are broadly similar, the only one who ends up paying is you.

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DonGould

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#436989 8-Feb-2011 20:46

SaltyNZ: the only one who ends up paying is you.

Yes that's how I understood it too. What it's all basically doing is just holding up the base price of calls.

That's why moving calls to data is important for users to do if call prices are bothering them.

This is why I don't think it should be regulated anymore, it doesn't need to be. The consumer already has a technical choice that they can exercise.

Now is one or all of the mobile providers was blocking Skype, SIP, HTTP and VPN access then we might have something we need to look at. But they're not.

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