I retired from personal blogging in July 2008 but you can find me over at blog.xero.com
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Posted by rod@drury.net.nz in Communications at 2:06 pm on Sunday, 12 August 2007
One of the news stories I picked up on my return was the Vodafone landgrab for fixed line customers that includes Free broadband access if you commit to $20 worth of tolls.
It’s great that we have competition but I have two concerns.
-  Effectively this cross-subsidization of services means that only the big multi-service providers may be able to play in the game. What does this mean for niche providers where the local innovation is occuring? It reminds me of competing in past life for providing a bespoke software solution where a competitor was owned by a carrier and could sweeten their proposal with free telephony services.
- Is this level of competition providing any real benefit or improvement to the issues we have. Is it promoting investment in infrastructure?
This move may be great. I’m not sure. What do you think?
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A ‘Land Grab’ is usually executed by those with a ‘Land Lord’ mentality.
Once you have the property and the availability of other property reduces, you charge what you want.
Vodafone might be cool with the kids, but underneath it, they’re just a telco.
It’s pseudo competition. The intention is to get some extra buy in from Vodafone customers - create another level of encumbancy. And as Rod infers - it only hurts those boutique providers who might actually up the ante on data/voice provisioning
With comments like this Rod you could give the impression you are going left wing. Why shouldn’t Vodafone offer this type of service. Someone like Orcon has offered similar but different services for quite a while, Orcon has now jumped into offering an increase on their old offering and so has Telecom. This is called competition. You have been beating a drum for months now that the government should basically sponser broadband for all New Zealanders. What Wellington City Council was talking about regarding broadband is only a variation on what Vodafone/iHug offers, a sponsership for Wellington rate payers. Electricity companies offer cheap gas for consumers who buy both products from them.
These are all limited shelf live deals, if it gets more people off dialup and onto broadband you should be beating that drum even louder in more celebration.
A more important issue on broadband is this article - particular the speeds in Hong Kong.
http://www.nzherald.co.nz/topic/story.cfm?c_id=250&objectid=10456596
If NZ is going to compete, we don’t need 1Mb broadband, we need broadband like HK has. If we cannot get it everyone lets start by getting it for businesses who employ the people, earn the export dollars and pay the taxes.
You wouldn’t have seen but Angus Tait died this week. Tait Electronics has earned over 2 billion export dollars for NZ. Two billion dollars!!
Can I float a broadband idea…sorry if it’s a little off topic.
Last month my 15 year old son was off school with the flu. He spent two days immersing himself in the world of youtube and places where there is music (I’m guessing, but I’m good at guessing).
So, two weeks into my 10gig monthly plan with Telecom were dialed back to dial-up.
Here’s my idea:
I checked previous use. Averages out at about 6gig a month.
Rolling over the unused portion of your account month on month probably doesn’t make any sense - certainly not accumulating the unused balance.
But how about this?:
If you go over your allocation, instead of dragging the relationship back to the stone-age, how about you get a ‘grace’ allocation equivalent to the unused portion from the previous month. After all, you paid for it.
The Internet is the embodiment of ‘a two way street’. Let’s expect suppliers to behave with that in mind.
Think different baby.
David, maybe Telecom think its your responsibility if your 15 year old son chews through your broadband. Some might say if he was sick enough to not go to school, maybe using Youtube all day was not a good idea.
I am sorry, I’m being rude. I just get fed up when I think parents want the rest of the world to be responsible for their children when they won’t be. I’m sure you are not like this.
On another note I have been checking out broadband in the UK as we are opening an office there in November. If you convert pounds to dollars say by 3 it can look expensive, however if you work it out pound to dollar or 2 dollars to a pound it isn’t. Why is it so expensive here? Sure we have less people, but doesn’t that mean less equipment needed.
Maybe thats why Vodafone are entering the market. They are just rolling out their UK business model to NZ. More competition, lower prices.
Dermott,
You have firmly grasped the wrong end of the stick. Your sweeping comment on my parenting beliefs is utterly ‘off’. I’m not fussed about my son using the bandwidth (it could easily have been me, I was simply giving a little human context).
My point is simple:
When a business enters into an arrangement with consumers it should be mutual.
When there is an equilibrium - where I perceive the benefits received are equal to the costs I am satisfied and will be loyal.
When the cards are stacked in favour of the vendor - for example if I under-utilise the bandwith they profit. If I overutilise I am penalised with no acknowledgment of my prior behaviour (including consumption and loyalty).
This applies to all businesses.
Interestingly I buy web hosting from a business in the US called Dreamhost. The more you use their service the more they ‘bonus’ you. In effect rewarding you for loyalty.
Too many businesses are so busy attracting new customers they ignore their existing ones. Telecom’s broadband ads and offers only serve to renforce my negative experience. When the time comes to change (i.e. a truly competitive arena) what do you think I will do? Attrition is not a ‘natural’ consequence of business. I buy their second most expensive plan. I would expect to be considered a valuable customer (part of the 20% that buy 80%). To replace me Telecom need two customers on a standard or discounted plan.
David, as I pointed out in retrospect to my comments “I am sure you are not like this”.
The point in business is someone like Telecom cannot please all of the people all of the time. You are one that they cannot. So am I. When they recently changed their plans I was upset and annoyed. And did consider changing.
You say “Attrition is not a ‘natural’ consequence of business.”
Unfortunately it is for companies that have a monoply and Telecom do as all ADSL goes through them at the moment. Do they care, probably not.
But the bottom line is both you and me made deals with Telecom to use their 10GB plan and if you use more than this they drop you to dial-up speed. That was the contract we entered into. Its like complaining about the IRD. Its the law, there is no other valid argument. Its time we voted with our feet.
The only reason I did not change was because we had Xtra email accounts. However you can pay Xtra $2 a month to redirect your email to another address I am told after you leave them.
I said it back on 30 June 2006 that vodafone was the isp to watch.
http://www.drury.net.nz/2006/06/30/ie7-beta-3-is-out/