Vodafone tempts phone customers to hang up on landline

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This was published 13 years ago

Vodafone tempts phone customers to hang up on landline

By Lucy Battersby

THE mobile phone operator Vodafone is trying to lure Telstra and Optus fixed-line customers with new plans offering unlimited calls to all phones for the same price as monthly landline fees.

Starting at $45, the plans offered by Vodafone Hutchison Australia undercut Optus's unlimited voice plans by more than $50 and Telstra's by $80.

Vodafone's marketing director, John Casey, said the new strategy ''provides customers with the perfect reason to hang up on landlines''.

Telstra offers fixed-line plans with unlimited local and interstate calls for $89.90 per month, and Optus offers $500 worth of calls for a similar price, but both charge additional fees for calls to mobiles and overseas numbers from fixed lines.

The cheapest plan offers 1 gigabit of mobile data with unlimited phone calls and text messages, while the most expensive plan, $100 per month for at least 12 months, includes 4 gigabits of data and $100 worth of international voice and video calls.

Phone handsets are not completely subsidised unless customers sign up for 24 months on either the $85 or $100 plan.

Analysts pointed out that Vodafone risked sending its own high revenue customers to lower value plans, but this may be limited by charging customers for handsets on lower value plans.

''Vodafone is effectively introducing a new pricing model by offering unlimited voice and SMS at all price points … and pricing under these plans is now largely based on tiering of data allowances,'' Goldman Sachs and Partners telecommunications analysts said.

The number of people signing up for Vodafone's services had declined in recent months after Telstra made its mobile services more competitive. Vodafone, they said, was fighting back with this new plan.

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A Telstra spokeswoman said it was ''confident of the value we offer, the range of plans to suit all budgets, and an unbeatable network''.

But Cameron Craig, the chief executive of the comparison website Whistleout, said Vodafone's plans were ''supercompetitive'', and cheaper than current plans offered in the US and Britain.

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''They see an opportunity for people to completely ditch their landline … Telstra has seen a decline in fixed-line customers and this is just going to exacerbate that,'' he said.

One catch in the new plans is handset pricing. Vodafone is asking customers on a 12-month $45 plan to contribute $540 towards the cost of an iPhone4 and $480 towards the cost of a HTC Desire.

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