Wed, 22 Jul 2009 12:00a.m.
What do you look for when you pick your mobile service provider?
Good coverage, quality of service and friendly and helpful customer support? How about pricing, plans and bonus offers?
Oh, then you’ve got to see which network your friends are on, otherwise you’ll pay a lot more to communicate with them. Oh, but do you want a wider range of phones? Or have the ability to switch between two different phones in a matter of seconds, retaining the same number?
Telecom’s new XT network has been promising New Zealanders a lot, in terms of speed, and it seems that they have delivered.
Telecom’s old CDMA network didn’t use SIM cards which meant that a number became associated with a particular handset and could only be transferred at a Telecom store.
XT utilises SIM cards and although not all phones are transferable between the two networks, many more phones are now an option for XT customers (for example; although the first-generation iPhone won’t work on XT, being GSM, the UTMS-based iPhone 3G and iPhone 3GS do).
These changes are all well and good, but for me, the game changer, is XT’s One Rate.
As far as I can remember having a cellphone, I remember that I’ve had to deal with different rates for different times of the day, different parts of the week, different countries and, because mobile service providers think they are rewarding their loyal customers with “cheaper” rates, we’ve also had to deal with different rates to different local networks.
Telecom XT’s One Rate does away with all of these problems; in fact, the best thing about XT’s One Rate is the philosophy behind the pricing, the philosophy which runs through all of XT’s Pre-paid Pricing, Plans and Extras.
The philosophy which is similar to the idea of net neutrality; that there should be no discrimination when it comes to data transfer.
Now technically if we were to enforce net neutrality onto the mobile service providers then we’d only for pay data — there would be no such thing as minutes or SMS and MMS charges. We’d only pay for the data that we used (in terms of MBs/$.)
This idea of only paying for the data we use makes a lot more sense, economically, to consumers, because at the cost of sending SMS messages, using 100MB of would cost $3,125 on Vodafone (using Vodafone’s TXT2000 bundle pricing and their assertion that the TXT2000 bundle would only use 320kB).
At Telecom’s SMS prices (using the TXT1500 Extra) the same 100MB would cost $7,500. Currently, 100MB/month can be purchased at a rate of $10/month on both networks. Telecom’s $7,500/100MB may seem outrageous until you realise that their SMS price doesn’t discriminate against Vodafone’s customers, if you charged Vodafone customers for 100MB at their SMS prices which don’t discriminate against XT customers (their “standard” rate) then a charge of $125,000/100MB is incurred!
Unfortunately with the current infrastructure we can’t treat data as just data, separate systems are in place for SMS, MMS, Voice and Data.
We can however, enforce the sense that my service provider should allow me access to any website at the same cost. That is to say, that Telecom can’t charge me more, for browsing a website, just because it’s on a server that they do not themselves host or are partnered with.
Likewise, mobile service providers shouldn’t charge us more, for connecting to another number, just because they do not themselves carry it.
XT customers are no longer “rewarded” for texting other XT customers. Let’s reword that, XT customers are no longer penalised for texting Vodafone customers, whilst Vodafone customers are still penalised for texting XT customers.
Vodafone argues that with their TXT2000 plan, Vodafone customers pay much less to connect with their friends, 0.5c per SMS compared to XT’s pricing of 1.2c per SMS (based upon their TXT1500 Extra).
What they don’t tell you is that if you were to communicate with someone who is an XT customer you’d pay 20c, whilst XT customers still only pay 1.2c for communicating with Vodafone customers. If you do the math, you’ll notice that Vodafone customers pay 40 times more, to contact XT customers, than they do Vodafone customers.
It’s clear why entire schools (and even cities) of students moved to the same network when the on-network text bundles came out.
Anecdotally we can say that Auckland is Vodafone territory while pretty much everywhere else is predominantly Telecom. There were clear benefits to these on-network text bundles when they first came out but we were beginning to learn that once you are in one network, you are stuck there.
If I didn’t like Vodafone, tough, I couldn’t move because if I did, then none of my friends could text me; if you have to pay 40 times the regular amount to communicate with someone then no-one can justify it.
Clearly these VF2VF text bundle prices are their real “standard” SMS prices on Vodafone as the text bundle prices on Telecom are their real “standard” SMS prices. Where they once were a promotion or reward, they have now become de facto. The 20c rate advertised by both carriers is an inflated standard price containing a heavy Luddite tax. Anyone sending less than two text messages per day does not even use SMS regularly and therefore can’t be counted as standard.
XT has made things simpler, the way it should be. I should worry about what carrier I am on, not what carrier my friends are on. If I buy a text bundle containing 2000 text messages then I should be able to send 2000 text messages despite which network my friends are on. This becomes increasingly more important when the new network 2degrees comes out and a 3rd carrier is introduced into the mix.
This is not a problem of the future, make no mistake, it is extremely relevant today. Carriers let you take your number with you if you decide to swap networks, that means an 021 number can just as easily be on the Telecom network and vice versa (a free to text service to find out which network your friend is on in order to find out if you can text/call him in your included minutes or text bundle is not simple and does not solve the problem).
I still have to remember that a text message to John (who’s on XT) will cost me 20c, while texting Jeremy (who’s also on Vodafone) will only be 0.5c and oh, don’t forget Susan (a 2degrees customer), she will cost me 15c for every SMS I send.
I am not arguing for lower prices, that is a different story. I’m arguing for clarity and choice. Let me choose which network I want to be on without worrying which network carries my friends and make it possible for me to be clear about exactly how much I’m paying, for what I am getting.
With the introduction of a third real competitor in the mobile service provider arena and a major upgrade to one of the two heavyweights that are currently in the ring, these questions become even more important for their customers.
Let’s hope that Vodafone shapes up, and 2degrees deliver what their funny-man Rhys Darby is promising because a “just joking” won’t be accepted if they don’t.
Vodafone On Account customers have access to bundles up to 600 text messages which cost $12.95/month. All XT customers (not just minimum 12-month contracted customers) have access to their no-discrimination text bundles which are still comparatively cheaper.
100MB on Vodafone at TXT2000 VF2VF Only SMS Rates = (100MB/320kB)*$10
100MB on Telecom at TXT1500 SMS Rates = (100MB/((320kB/2000)*1500))*$18
100MB on Vodafone at non-VF2VF only SMS Rates = ((100mB/320kB)*2000)*$0