Vodafone Kills 029 Deal; TelstraClear Left With No Mobile Offering From June

By PULLAR-STRECKER Tom

VODAFONE is understood to have given TelstraClear notice it won’t renew a long-standing arrangement under which TelstraClear has resold Vodafone’s mobile service.

Customers including Inland Revenue, the Agriculture and Forestry Ministry, BNZ and Foodstuffs South Island buy their mobiles from TelstraClear, which sells connections to Vodafone’s network using an 029 prefix.

The agreement, which will end in June, has proved a win-win for both firms, though TelstraClear has long complained of thin margins and has tried in the past to renegotiate the deal to give it greater control over the mobile offering.

There are believed to be more than 30,000 phones with 029 numbers, most of them belonging to “high- value” customers.

Vodafone has gained from being able to sell its mobile service to government clients and large corporates that want to deal with a single fixed and mobile services supplier and have complex billing requirements.

TelstraClear has benefited by using the resale arrangement to fill a gaping hole in its service offering.

It is believed that confidentiality agreements prevent both companies from acknowledging the termination of the arrangement.

However, some large customers have now been advised the resale deal is ending.

TelstraClear declined to comment. Vodafone’s general manager of commercial development Tom Chignell says Vodafone is “committed to its ongoing commercial relationship with TelstraClear”.

That relationship reached a new low ebb last week after TelstraClear publicly blamed Vodafone for the collapse of its $50 million Tauranga Unplugged initiative.

Vodafone is increasingly targeting government clients and corporates that once were the preserve of Telecom and TelstraClear by making it easier for them to replace their landlines with mobiles that can connect to its backbone network via companies’ PABXs.

In 2005 Vodafone pitched — unsuccessfully — for Westpac’s telco business in direct competition to Telecom and TelstraClear. Last year it won a deal with Wellington City Council which will replace its landlines with mobiles.

Though both developments indicate Vodafone may have long outgrown the resale deal, till this month it had no easy way of unwinding the arrangement without inconveniencing 029 customers.

However, following the introduction of mobile number portability at the beginning of April, Vodafone can now give TelstraClear customers the option of dealing direct with Vodafone while retaining their 029 mobile numbers, making it easier for the telco to pick up their business in a transition.

One analyst says Vodafone has less incentive to wholesale its network, now the Government has shown its intention to pave the way for NZ Communications to break into the mobile market as a third network operator, but predicts it may still face a backlash from regulators.

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