Telecom’s smart move

Here at TUANZ we’ve long lobbied for better roaming rates
for mobile users.

The idea of having a smartphone and being able to use GPS,
connect with distant family and friends, send and receive email and all the
myriad of other things that have come about since Steve said “Build me a phone
with no buttons” has been one of the great boons of the last few years and
every time I use my tablet or smartphone I feel a little bit Trek inside.

Having to dumb it down, rip out its still-beating heart and
throw it on the concourse floor every time I disembark in a distant land has
always been something of an anathema to me. Every time I forced a local SIM in
my phone a little piece of me died inside.

I may be overselling it but data roaming charges really used
to get my goat.

I was delighted when Telecom CEO  Simon Moutter told me he was going to do
something about it. He’d just started back at Big Blue after his time at
Auckland Airport and I think he saw there just what a farce roaming charges had
become. Charging customers $20,000 for a product that should only cost $10 was
clearly bonkers, but nobody seemed willing to tackle the issue head on.

Sure, Vodafone had introduced its Data Angel programme which
warned users when their bill was getting excessive, but I always thought that
didn’t really address the problem of the price.

Moutter’s solution – a $6 flat rate for roamers who then go
on to use data out of their existing bundle ($10 if you’re roaming somewhere
other than Australia) has a simplicity about it that I really like. It’s hard to
not understand “you pay $6 on top of your usual amount and then just carry on
as you normally do”.

The danger, of course, was that customers wouldn’t bother
using the service, that uptake would stay about the same and that Telecom would
have to foot the bill for international data charges from the various foreign
network operators. “It would leave us a long way under water” was how Moutter
put it at last night’s After Five’s session in Wellington.

Instead, users responded with a nearly 200% increase in data
consumption while roaming, both in Australia and the other destinations covered
by the scheme.

This is tremendous news as it reinforces what we’ve been
saying all along. Make the price reasonable and people will actually pay for a
product. Sure, you can still get a better deal if you put a local SIM in your
phone on arrival, but the hassle of that (losing contact numbers, remembering APN
settings for the return journey and all the rest of it) isn’t worth the extra
savings for most people.

Moutter says this is part of the new approach to competition
at Telecom. Instead of “walking backwards slowly” defending market share and
generally being as negative as possible to the environment around, Moutter
wants Telecom to take a leadership position in the market and drive it forward.
Given how quickly he got the data roaming package introduced, Telecom is
certainly showing itself able to do that.

So full credit to Telecom for cutting to the chase and fixing
what has been a major problem for TUANZ members for a long time and now, onward
to see what’s next. Moutter says the company won’t be competing with over the
top providers because there’s no way he could foot it with an Apple or a Google
in that market. Instead, he says the future of telco providers is in bytes – it’s
data all the way and eventually he’ll be overseeing a company that doesn’t sell
minutes of calling or TXT messages. That’s an exciting proposition and hearing
it from the CEO of Telecom tells me that if there’s one thing the telco market
doesn’t lack for it’s surprises.

2 replies
  1. Matt
    Matt says:

    Quite a change from the, ‘we don’t want to become the dumb-pipe’ I recall hearing at various meetings back in the day. They did try for a while with Vodafone’s V-live service and Telecom’s T-World…but as history has shown, you are either all in, or all out. Good on Telecom for recognising this, focus on the experience and the price and you will reap the benefits…there’s room at the table for everyone.

    • Paul Brislen
      Paul Brislen says:

      Absolutely is and I agree with you, the telcos that figure out how to move gracefully to the world of the "just sell us data" dumb pipe will be the ones that survive. Those that resist will have cost models that don’t cope with the transition.

Comments are closed.