July 12, 2008

Vodafone Says Commission ‘Looking for Work’


VODAFONE corporate affairs manager Tom Chignell has upped the ante in a spat with the Commerce Commission over the price of mobile calls, and has questioned whether the commission is considering investigating mobile-to- mobile termination charges because it is "looking for work to do".

Vodafone said in January that consumers were paying less for mobile phone calls in New Zealand than in most OECD countries.

The claim was met with scepticism from Telecommunications Users Association chief executive Ernie Newman, who later accepted it, but the commission was not convinced.

It disregarded Vodafone's cheapest "You Choose Base" plans when producing its own benchmarking study, which painted mobile pricing in a less favourable light.

Vodafone's cheapest Base plan offers 60 minutes of off-peak calling, 20 minutes of peak-time calling and up to 40 texts for $18.95 a month.

Mr Chignell wrote to the commission in April, criticising its decision to exclude the plans and accusing it of being "fixated on ensuring the results of its benchmarking analysis reach a preconceived conclusion".

"Not only does this lack integrity, it also represents a continually pessimistic approach which seems to wish to deny improvements to the state of competition in New Zealand markets that the commission, the Government and industry participants have worked hard to achieve," Mr Chignell wrote.

Telecommunications commissioner Ross Patterson said the commission had not included the plans in its benchmarking study because Vodafone had refused to say how many customers used them, the conditions attached to the plans were restrictive, and its investigations suggested they were not being actively promoted.

Dr Patterson said the commission visited Vodafone dealers asking for details of their cheapest plans and the You Choose Base plans were not advertised, promoted or offered by staff.

A commission staff member visited one of Vodafone's central city stores and asked about the plans, but was told by a salesperson that they had never sold one.

The salesperson phoned Vodafone's helpdesk, which was also unfamiliar with them.

"On this basis, and in light of Vodafone's refusal to disclose to the commission the number of customers on the Base plans, the commission intends to continue to exclude the Base plans from its 2008 monitoring reports," Dr Patterson said.

Mr Newman said in his blog the exchange was "not a good look for Vodafone", but an unrepentant Mr Chignell says Vodafone has addressed the issues raised by the commission. Restrictions on Base plans were removed last year, and as of May 9 the plans could be bought online and were easier to find on Vodafone's website.

"There is no way the commission can exclude these plans again -- they have got no grounds. They should probably admit that."

Mr Chignell says Vodafone is seeking more information on the visits to its dealers. "Not all our channels sell on account plans. The people in the stores are salespeople and like most retail staff they don't spend many, many years in the same place. There is quite a high turnover of staff, so it is quite possible they could have got someone who wasn't well trained . . . or was a bit rusty."

The commission recently signalled it would consider regulating the fees mobile network operators charge other mobile carriers to route voice calls and text messages to their customers.

The move threatens Vodafone's ability to set different prices for "on-net" calls and texts between its own customers and "off-net" calls and texts to customers of Telecom and would-be new entrant NZ Communications.

Mr Chignell says mobile-to- mobile termination charges are "hardly regulated around the world" and this had not put off new entrants elsewhere.

"It sounds like they are looking for things to work on at the moment. I'm not quite sure where they are going with this."


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