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Sunday, May 16, 2004 1:14:36 PM
By Mike Barton
May 15, 2004
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Hutchison and Vodafone are stepping up the mobile price war with new plans aimed squarely at stealing away landline customers.
With Telstra increasing its rates for a monthly line rental to as much as $29.95 from June 1, and Optus charging $28.50 a month, landlines are looking more and more like a luxury.
Last month Vodafone launched new plans with a set number of 20-cent calls to other Vodafone phones.
Hutchison is stepping up its capped plans with its cut-rate Orange service at the end of this month. Orange, available in greater Sydney and Melbourne only, will offer new capped-call plans that directly target the landline.
The plans include $29 with 500 free minutes for calls up to 10 minutes long to any landline. For $99 you get 1000 free minutes to use in the first 10 minutes of calls to landlines; for $149, 1500 minutes; and $199, 2000 minutes. Five-minute calls to other Orange mobiles are free.
The clincher with Vodafone is that every cent you pay goes directly to calls; and calls to other Vodafone mobiles are dirt cheap.
There are no line rental or access charges - prices are set by what you spend on calls a month. With Orange, $29 gets you 500 free landline minutes. Calls over the limits are charged at 30 cents a minute - landline territory again. With landlines, users will be paying nearly $28 a month just for access and basic voice messaging.
"It must be scary for a lot of the [wired phone companies]," says Vodafone Australia's chief, Graham Maher. "The real question is what is the future of copper wires."
Telecommunications analyst Paul Budde says that with Telstra constantly increasing landline rental rates, consumers are looking for alternatives.
"There will be an increased number of people that will cut the landline."
Budde says the first people to do this will be people who don't need their landline for internet access. But he says the landline will get new life with broadband connections that will soon start offering voice calls over the internet, or VoIP.
He says VoIP will take some time to mature but as part of an internet bundle it could see line rentals melt away. In the interim, the main reason people and businesses would not cut the cord now is that they want to keep their numbers.
"The access charges from Telstra are rapidly turning into a tax on telephone numbers," he says.
And the mobile price war will only hot up, says Budde, as Vodafone joins Hutchison's "third-generation" (3G) service, 3, with an upgrade to 3G in the middle of next year. Third-generation systems are as much as 30 per cent cheaper, he says.
Hutchison is already enjoying the benefits of its more efficient 3G network with capped call voice and video plans, which are reportedly drawing 7000 new users a month.
There's also 3G's wireless internet invasion with the launch this month of 3's NetConnect card. It offers maximum 384 kbps speeds - higher than most budget home DSL plans - at a flat casual rate of 0.4 cents a kilobyte, or on a capped plan ranging from 3MB for $10 a month to 100MB for $150 a month.
Maher says Vodafone will match 3's data speeds when it shifts up to 3G but will offer better coverage. Vodafone is also reviewing how it might go about selling.
http://www.smh.com.au/articles/2004/05/14/1084289871893.html
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