I retired from personal blogging in July 2008.
But you can find me over at http://blog.xero.com.
It was uncomfortable watching a peer like Mark Rushworth having to defend the impossible on Campbell Live. He was earning his money tonight and did a pretty good job. Rite of passage that stuff.
Comparing data pricing to what I saw in the UK last week, one of the big contributors to sky high data prices must be international broadband prices.
For the iPhone is the breakthrough mobile device it should be then I think data pricing needs to be at the Sky subscription level. Say $75 per month. UK mobile data was about that for 5GB.
Say that $150 of the $250 monthly cost is international traffic then $100m of investment in more international capacity, at a 10% cost of capital, could be covered by as few as 5500 customers.
It just reinforces the business case for driving international connections to a cost plus model. An unconstrained digital lifestyle and the small business transformation that is possible with abundant connectivity is just not possible in New Zealand by the current market. Not great for brand NZ
blog
@Rod have to say Rod that I disagree with your assessment of Mark on Campbell. Firstly fronting up could not have been easy but he was on a hiding to nothing anyway. How many times did Mark say that had not seen the other plans. For somebody in his role of course he will have seen the plans, if not then I’m afraid for the state of Vodafone in this country. Campbell did a pretty good job quoting the other plans.
This is a clear case of taking advantage of early adaptors. When we see true competition we will see a true price. In Australia you have 3 vendors fighting for the customer, who wins….the customer, through choice..
What I did notice about the coverage on both the news and Campbell is that Apple came out of this pretty good. Vodafone are taking all the heat and rightly so, but they will both lose out in the end.
I have been eagerly awaiting the launch of the iPhone here (been using the current version for 6 mths) but now vodafone can stuff it I will just keep using my current iPhone and make the best of WiFi.
Sorry Vodafone you totally blew it……….
I have to agree with Stan - I think you’re giving Mark Rushworth too much credit here. I’m assuming that he must be heavily involved in the pricing strategy of the iPhone in NZ, so good on JC for turning up the heat.
Sorry Rod, I’m a little confused by your logic on the international traffic. I understand that more international capacity is desirable, but I just can’t see how international traffic impacts mobile providers any more than it does PSTN/ADSL/Cable. So Vodafone must be making a pretty decent (read ’supernormal’) profit out of these plans.
Personally, I find Vodafone’s pricing atrocious. I was glad to see that Reuben Schwartz over at Stuff.co.nz picked up on one of my comments:
“I was seriously considering buying an iPhone come Friday, but I would feel like an idiot signing up for a $250 a month cellphone plan. Sorry, that is ridiculous. I knew that Vodafone would aim high, but not that high”
That statement is entirely true. $250 a month is too much of a behaviour change to expect from New Zealand mobile consumers, including myself. In saying that, I disagree with the petitioners who want the iPhone to be made available on prepay. Sure, that payment model is desirable for some people, but only those who can’t afford to pay any amount of money on a monthly basis - not the type of customers Vodafone are ideally looking for, especially not when they are expected (reportedly) to give a kickback to Apple. The better solution would have been lower priced plans with less focus on call minutes, and more focus on data and txt messaging; that would better suit the majority of the early adopter target market and instituting it now would certainly resolve much of today’s bad PR.
The $250 iPhone plan includes 600 voice minutes, equivalent to a You Chose 600 plan, which costs $224.95 a month. This leaves a 1 GB mobile broadband plan of $49.95.
Reality is the data coming down to an iPhone is no different than the data coming down to a Nokia N95 and Windows Mobile devices - those already in the market and using mobile data.
The problem with the plan is not the cost of Internet traffic. The problem is the lack of flexibility. You are welcome to buy an iPhone outright, pay $1129 and use your existing voice and data plans.
This means that mobile data is not the problem. Mark’s assertion on that programme was wrong.
The point is that if you want to pay $199 for the device, Vodafone will tie you to a $6000 plan over two years. Or you can buy the device for $1129 and get a cheaper plan.
Or not buy it at all.
Your choice.
@Evan… Absolutely right. Vodafone shouldn’t be paying much more than other providers - so Xnet manage to sell their bandwidth at $1 per gigabyte, but Vodafone charges $49.95 for gigabyte.
Delivery for mobile infrastructure? Check. Available in some places other than your home/office? Check. Fifty times more expensive? Double check.
I doubt Vodafone’s pricing plan has anything to do with international data costs. Rather, I suspect the lack of competition in the NZL market ALLOWS Vodafone to crank the price to what they think the consumer will bear.
I like the iPhone, but not that much. Will check the plan options out thoroughly in the next few weeks, and will probably end up retaining my Nokia e50 for voice (great form-factor and battery life) and Macbook for everything else.
Also, I retract my statement about the ‘kickback’. Turns out that the 3G kickback is given to Apple up-front following each phone sale. So Vodafone could theoretically sell the phone prepay. But I still think that ruins the experience of the product (I periodically borrowed a first-gen iPhone from a friend without a data plan. It was hell trying to constantly avoid using the mobile data capabilities, even with the WiFi).
I just think this whole thing is extremely disappointing from the perspective of someone who has waited for supported NZ iPhone services.
yes I have to agree with others comments here there really is NO justification behind the ‘it costs more to get a packet here’ to the point of it being (as has been pointed out) that much more then say xnet.
It’s pretty much a take it or leave it proposition and I will leave it.
It is simply wrong for anyone from Vodafone to say they haven’t seen the other plans. It is their business to judge expectations and make market assessments based on the obvious facts.
Vodafone is an international company and so is Apple. Anyone can get the comparisons so such statements are just another example of “confusion as a marketing weapon” unless of course there is another explanation which I can’t mention in polite company.
Either way the iPhone pricing model and data plans disrespects customers and potential as idiots by treating us as if we haven’t seen a rort before.
I did my own spreadsheet before the news came on and even allowing for purchasing the phone/s at full rates of $979 for the 8GB iPhone or $1129 for the 6GB model plus adding a data plan to my existing phone plan the numbers still don’t work.
There has to be some kind of utility tipping point where the advantage of having a combined phone/ipod/browser device has some combined killer factor and I just don’t see it.
Personally I have a Mac for driving around time / and an account at CafeNet. Even allowing for the fact that their partners in Auckland (Vector!) don’t know that they have such a product and those hotspots are limited they reach the places where I have most of my meetings.
In my view utility that a wireless enabled pc or Mac offers is still much better than what an iPhone might provide unless you can actually replace a computer with the iPhone. Now that a MacBook is $1800 and a new MacBook Air is around $3k now maybe Apple is just hoping more people will look will check out the alternatives.
So an IPhone compared to a PC and a phone is no contest but it just doesn’t beat a real Mac and almost any mobile out there.
If I can buy 6 Mac Minis or 3 MacBooks for roughly the same price as price as the infamous “special” $6000 data plan I know what I’d rather do.
Of course I’d still like an iPhone if someone can show me the utility point beats a wireless Mac or PC with even a gumboot phone anytime.
I didn’t see the interview on Campbell but its pretty clear that this is a fairly standard subsidised plan.
This will have very little to do with international traffic.
You can buy a 1Gig plan @$50 - that is saying that $200 covers 600 min and 600 texts. Looking at Voda’s You Choose 600 plans that is actually less than you would pay for that amount of usage. Compared to their normal pricing its pretty sharp!
As an aside, Based on full price, there is an $800 subsidy that is being covered by Vodafone for the 16G iphone (of course they will be making some $ on that as well. Vodafone will be in gravy from about 8 months on based on no overage.
If you want a 3G iphone, buy one on open term and build your own plan - at least you can do that.
@freitasm spot on
I think the reason a lot of people (including myself) feel that these plans suck, is that, like I said, the focus is too much on minutes, and not enough on data.
I understand that piecing together a 600 minute plan with 1GB of data would cost more to do regularly than with the iPhone specific plans, but there are a lot of early adopters out there who are of such a demographic that call minutes do not matter so much. I would be much happier with 6GB data and 100 minutes than 1GB data and 600 minutes. In saying that, I would have to retain my work-provided Nokia for making calls on (I don’t think there are many non-business users out there who would need 600 minutes), but this wouldn’t particularly bother me. And for those business users who are currently paying for 600 minutes anyway (and whose employer would support the iPhone) - that’s great for them. The current plans discriminate against non-business users, who value data over minutes.
Now I have watched the interview - ouch - my guess is that there are not many people in this forum who have had to deal with a full frontal attack like that. Reminds me of talking to school halls full of scared parents when we were rolling out mobile networks. i digress…
Campbell gets it right at the start - and an interesting contrast with apple marketing tactics I think. People are p!ssed at the supposed cheap price but being turned around. Apple don’t do a partial tease then pull back (per the $199 sticker price and $250 per month) - they release the lot. And if they overcharge they find a way to revert.
Rushie thinking on his feet with the international data line is my guess - total red herring. Not as though he had many choices - JC was firing. if anything his angle should have been that if he compared this plan with a You Choose 600 plan, Vodafone are actually charging less. You could even have wrapped a reality distortion field around that.
In the end they will sell out of stock - guaranteed
Apologies for the the bad typing earlier.
It is possible to watch the Campbell Live interview online
the TV 3 news here
I certainly feel for the vodafone guy having to front up on something to be attacked like that.
But international bandwidth costs have nothing to do with it because I can buy 20GB off vodafone for $90/mo via their ihug acquisition. I suppose their cell towers are overloaded and the price their bandwidth in such a way to discourage use to leave call quality high.
I think I’ll buy an unlocked phone here in france and take it home in december when I return. Seems less pricey than the vodafone option. The other alternative is to wait 3 months till some crazy internet-nerd figures out how to unlock them again…
A huge missed opportunity for Vodafone NZ to redefine and reduce their pricing for On Account mobile data.
Ignoring the headline-grabbing $250 per month for a minute (that was a dumb decision to lead with a $199 phone and that plan), the iPhone pricing is pretty reasonable compared to their existing voice plan combinations, assuming you need the Choose 120 or higher. But, it’s not just about voice minutes - the iPhone is about 3G mobile data - a lot of potential customers would be happy for a lot less minutes in exchange for a lot more data.
Sure, you can buy the iPhone outright, use an existing Choose 20/60 plan, and buy your own data - but the data is still too expensive for what you get. That is still the real problem here.
Here was Vodafone’s chance to take full advantage of the super-hyped iPhone, by announcing a range of cheaper data plans (or at least more data for the same price) - not just for the iPhone, but for all phones. But after weeks of anticipation, and a teaser in reduction of casual data rates, they’ve totally blown their opportunity and in doing so, turned more of their customers against them.
Instead of an appreciative consumer base with a potential uptake in the tens of thousands, Vodafone have managed to alienate just about everyone who was thinking of buying an iphone despite current economic conditions.
Expect a labour-like backlash from the punters. Parallel importers must be rubbing their hands with glee.
How do you think the vodafone launch debrief will go?
@ freitas & miki - totally agree.
@ Rod - JC nailed MR and I suggest Mark could have utilised some of the great come backs as outlined in the posts here and other places. Sadly JC will nail you if you can’t come back without pause and strong fact - he is a pro and Mark should not have been put up against him as spokesperson first time up. Stanners would have been a bull dog…and Mark would have enjoyed yakking about the Internet Plans.
I must say though, convenience versus price will always be measured closely in this market. Especially when a perceived monopoly exists.
@Povi Masima They will sell 10’s of 1000s - might take a month longer than expected. These plans are actually better than their current plans. If you bought one from a parallel importer then you would have to buy a plan still. Or use prepaid and not use data.
The fact is mobile is expensive - that’s the core issue - OECD stats back that up. That should be the real target.
Voda’s only mis-step was releasing the top-line sticker price a day before the plans - the only people alienated are the ones who thought that price was too good to be true. It was. They won’t release in that way again. That was to try and maximise the hype - and they didn’t really need to do that.
The debrief will go fine :)
Average iPhone 2G data consumption according to Deutsche Telekom AG is just over 100MB per month (http://www.unstrung.com/document.asp?doc_id=144563&f_src=unsthttp://www.unstrung.com/document.asp?doc_id=144563&f_src=unstrung_gnewsrung_gnews). While the price per MB is much higher than our overseas counterparts, their markets are different to ours.
Our average user won’t have an issue with an iPhone 3G 250MB monthly plan. As the network improves and iPhone app/media consumption grows, we’ll see a demand for bigger and better plans.
There was a very long and useful dicussion a few weeks ago on this site
at 1-a-day/ which was about another misleading data pricing deal from Vodafone.
It covers much of the data plan debate and shows that Paul Brislen of Vodafone was very clear on the range of pricing comparisons well before the iPhone prelaunch.
In my opinion this very much reinforces the more cynical views on market behaviour by large duopolies.
Point is that even though such mobile data pricing plans have come down they are still very expensive
to quote Bruce Hoult from that post
“$10,485.76 a gig for non-contract data. The new rate will reduce it to $1024. Ok, actually only $1015 if you do a gig in one day. Or $754 if you spread it out over 30 days.” and then mentions much better alternatives.
or the “Comment by Clarke at 7:32 pm on 23 June 2008″ where the words rape and pillage are used. (Go right down to the bottom of the comments thread.)
Which is why after more than 10 year on various mobiles I still don’t use that service except in emergency.
CafeNet is looking better all the time. (thanks CityLink)
And I hear that running ones own iMap based server for the Blackberry might just be the answer to many corporates looking for a choice over the iPhone sticker shock.
@ Jason Kemp
Mobile Data in NZ = $$$
Get used to it
Wi-Fi = cheap or free / fast. For instance, Tomizone offering free Wi-Fi for iPhone / iPod touch users is just scratching the surface (and yes - Hotspot owners get paid for it).
Oh - one more thing - iTunes Wi-Fi Music Store will not work on 3G. :(
@Steve I like WiFI
So when I get my new ADSL2 service (not from Vodafone) I’ll sign up with Tomizone - I love that idea - thanks for the tip.
I’ll say something similar here to what I posted over on a “popular and currently full of very angry people” site.
These plans are tantalisingly close to being good.
The one thing the iPhone loves is data.
Sure it is a great user interface for calling etc, but data use is where it shines, be that email, the web or the upcoming applications.
Now adjust the plans slightly with this in mind and, suddenly (i think) they are significantly more appealing.
iPhone1 iPhone3 iPhone5
Cost per Month $80 $130 $250
Included Minutes 120 250 600
Included TXT 600 600 600
Included Data 1GB 3GB 5GB
Additional Usage
Per minute $0.69 $0.55 $0.53
Per TXT $0.20 $0.20 $0.20
Per MB $0.10 $0.10 $0.03
iPhone with plan
8GB iPhone $549 $449 Free
16GB iPhone $699 $599 $299
We know (thanks to the $10 double your mobile broadband insurance) that vodafone can afford to give extra data.
I am first to accept that if I want the best iPod ever with a great phone I’m going to have to shell out some cash, so accept the subsidised prices.
But c’mon vodafone, the thing eats data for lunch. 250mb is chickenfeed.
bugger, formatting lost…but you get my drift.
p.s. good week to be on holiday Mr. Brislen.
one last thing,
good summary of what 250MB, 500MB and 1GB gets you
http://forums.appleinsider.com/showpost.php?p=1274503&postcount=9
What’s with this $50 a month iPhone plan with the fone costing $850 that Mark Rushworth mentioned? Or did I hear that wrong?
Aren’t there only 3 plans they’re offering?
He’s being particularly disingenuous.
850 is pretty close to the outright price of the 8GB (979) ex GST
you can have the phone outright with any You Choose plan, so it’ll be choose 20 at 19.95 + the $29.95 200mb.
@Rod, I am saddened that you consider Mark Rushworth a peer of yours.
I always held you in much higher regard.
If you create the impossible, be prepared to defend it. I am certain MR had a lot to do with the pricing.
Lets not forget that M.R was a former Marketing Manager for Telecom Mobile… so we have established what he is, now its just about price.
Just another exposure of the high price of NZ bandwidth and the lack of competition in the market place IMHO.
The iphone sucks bandwidth like no other mobile device and these tariffs will put people off from using the iphone like it was meant to be used.
I’m currently working in the uk on an iphone software startup that is treating unlimited bandwidth as a given. I’m sad to say that this startup could not exist in NZ in the current environment.
As well as rolling out fibre to the home, perhaps some regulatory attention should be focused on the mobile duopoly of Telecom and Vodafone and the monopoly on international bandwidth held by the Southern Cross consortium ?
Have to agree with the majority of comments here, Mark was clearly ill-prepared and was way out of his depth. I too am surprised that you consider this guy a peer Rod and like many people I can’t really see how his smug behaviour on Campbell Live could be considered rite of passage stuff. The one good thing about all this is that the rest of the world is now seeing how bad our mobile data prices are.
Seriously? … you are all a bunch of moaning !@#& :) You really want the phone … well pay for it then. Stop complaining about it.
The $250 isnt due to the data its due to the huge subsidy on the phone and them claiming that back. Do you really think AAPL is selling iPhones at less than full price to Voda NZ? Hell no … NZ is a pin prick in terms of market size and they have zero incentive to sell here anything less than full price. In the US and UK they sell the phones for much less to the providers because they know they are going to sell millions.
Voda got a bad rap … but really its all AAPLs fault :)
-Chris
Here is another surprising thing about mobile data - I did the check on a couple of locations and got this (possibly out of date information.)
According to the Check your coverage link -
2G/2.5G coverage in your area - Best (Green graph)
This location has a very strong signal, so you will definitely experience excellent quality for all services. Your mobile data connection will be as fast as a dial-up connection.
What good is a 3G phone on a 2G network? really.
My question
And HOW is very slow data a good thing and worth paying a premium for?
This takes me back to the early days of Bellsouth when I first tried to buy a data card only to be told it would be 9600 or some other really slow speed not worth the trouble and it was like that until only a few years ago until network upgrades.
If I can get up to 54Mbps of wireless connection speed using a WiFI connection then that is clearly the only viable option unless I’m travelling overseas in which case local data plans almost anywhere look way better.
So pay the full price for an iPhone / use existing plan and WIFI for local data seems to be the best option.
Well - slightly off topic but only just.
I’m sure Rod wouldn’t mind me taking some of the gleam of the halo that his readership seems to present him with but…
Mark Rushworth is an executive at a technology company
Rod Drury is an executive at a technology company
Whoever can’t see that Mark and Rod are peers is somewhat deluded.
Again no offence to Rod but what do you think would have happened if JC had been lashing Rod and Xero up there? - Rod would have put his best marketing spin on things (and no doubt done a better job than we saw last night). Marketers and execs need to talk their product up - as someone who has to do more than his fair share of talking up, Rod was sympathising with a peer who was put under pressure last night.
Whoever can’t see that is less than realistic about the way business, and business relationships, work
Leaving aside voice and text and just focusing on the data side of things, which surely is what the iPhone is all about:
Using the iPhone from Vodafone NZ
1GB Vodafone broadband plan for mobile $49.95 per month on a 24 month term http://www.vodafone.co.nz/iphone/plans.jsp#expander2
Using a Vodem from Vodafone NZ
3GB Vodafone 3G Broadband Pro plan $69.95 per month on a 24 month term. Pay $10 more and you get another 3GB, effectively $79.95 per month for 6GB
http://www.vodafone.co.nz/mobile-data/3g-broadband-plans.jsp
The iPhone and the Vodem use the same cell towers and other infrastructure.
Why the huge price difference?
Commerce Commission or Telecommunications Ombudsman anyone?
@ Chris
I would be happy to pay the $80 per month for the iPhone (I pay just slightly less than than for my current you choose plan anyway).
To me, relative to what VF charges currently (and im not saying what they charge currently is all that great either, but i digress), these plans represent good value for money.
It’s more the $699 jaxy-ramming price for the 16gb model on the $80 plan that has me feeling pretty sore.
If the fone started at $199 on the $80 p/m plan, and then went DOWN to say $99, and the FREE for the other two plans respectively, I would not be complaining. In fact you’d have probably seen me in the front of that lambton quay line come friday.
But because they’ve pulled a fast one on us and reversed all that, that’s why I’m annoyed.
> The $250 isnt due to the data its due to the huge subsidy on the
> phone and them claiming that back.
Rubbish. If you pay $199 for the phone instead of $979 then that’s a $780 subsidy, which is $32.50 over the life of a two year contract. That’s a tiny fraction of the $250 plan you have to pay to get that price.
On the cheapest plan (most expensive phone), you’re paying $18 a month towards paying back the subsidy.
> You really want the phone … well pay for it then. Stop complaining about it.
I would happily pay the full $979 for the phone and then use it on prepay. But that’s the one thing you’re not allowed to do.
Also that “$1 a day” casual data rate Paul Brislen was so happy about a few weeks ago, where everyone in the thread was talking about “that will go well with the iPhone”? It seems the iPhone is the ONLY phone you can’t use those with. Vodafone’s iPhone FAQ clearly says that if you don’t buy a data plan then you can’t use the internet AT ALL, and that the $1 a day is not available. Wtf???
Oh one interesting thing came out o the Campbell interview. Mark Rushworth at one point said that there were over five thousand 1st generation iPhones being used on the VFNZ network.
We’d all figured that Vodafone knew exactly how many were out there jailbroken and unlocked with VF SIMs jammed in them, but this is to the best of my knowledge the first time that a Vodafone representative has given a number.
It is worth noting than an 8Gb iPod touch will set you back $449
So onteh $80 per month plan, that iPhone is only going to cost you an extra $100. That seem pretty good value to get phone, gps and 3G data! There will also be a host of application that make use of this extra functionality.
The iPhone was never going to change the cost of mobile comms (both voice & data) in NZ. However it has now become a focus for the discontent!
@benkepes you know why I think some people are offended by the comparison? Rod is an accountant and billing guy and Mark is an engineer. Both are now diametrically transformed into CEO and Marketing GM respectively. Anyone who is from an accountancy, billing and/or engineering background is suitably mortified at how they could be betrayed in this way.
Simple equation: VF + iPhone = Monopoly = A Rort.
Saw the JC interview, Rod why pity a guy in his position, its his job and unfortunately he takes the good with the bad, yes he had no answer as to why VF in NZ is simply a lot higher than every other country, no amount of spin can cover this up - simply a very very bad day at the office.
I disagree its not about international broadband prices or these excessive 150 costs for only 1gb would apply pro rata to all ISP / non mobile charges.
Simple answer is demand and supply and I think in NZ based on these VF ripoff prices that supply won’t be an issue, economics will take over - in due time.
I’m currently a Telecom customer of many years and was going to switch to VF for an iphone. VF have really missed the boat and short term competitive advantage big time on this. 6k for 1 gb per month plkus still buying the phone - someone in VF is on something. NZ screwed yet again - look over the ditch and no wonder why people are leaving NZ - small population + monopoly is not a godd situation.
Pity on you VF… from a Telecom customer who you did have chance to convert.
It just shows that Vodafone had a wonderful opportunity to completely change the mobile data market with some cunning advantage - four months? - over Telecom New Zealand.
They lost the plot, and in the process managed to show their face to some of the New Zealand’s most influential figures around.
Really, clueless execution.
@miki
A little bit of that and a little bit of the blogosphere having totally unrealistic expectations about our own.
couple of quick thoughts a. Where is the vodafone Australia pricing? When it goes live it will be interesting to see how it compares to NZ. b. How will vodafone stop users from getting access to data if they source a phone elsewhere and pop in an existing sim card that is already on a data plan?
Go Cambell. What a grilling.
It is at his level that pricing decisions get made. Better him to front than a PR spokesman who has no pricing input and is then fed to the lions.
It was absolutely fantastic to see Campbell make a dog’s dinner of Mark Rushworth. While I don’t need/want an iPhone, I am pretty disgusted at the pricing VFNZ have adopted.
Highlights included not being able to answer the question “what other countries is the iPhone more expensive than New Zealand” and his response that he had not seen other carriers plans.
classic.
Come on VF just front up, what abt VF in Australia pricing - will be significantly lower than here. Maybe Mark can apply to VF in Aus where his BS wouldn’t be needed as the Aussies are not being ripped off like us.
miki the iphone release is a public relations nightmare - have you seen the vitriol on the herald, Geekzone etc
the iphone will be hacked within a month, be available at parallel importers and then be used on either network. People will then just add the 1gb data plan for $50 all for a lot less than $250 per month.
This is all besides the point and that is vodafone had a real opportunity of launching 3G data into everyday mobile phone use. What is the uptake of Vodafone Live? Non-existent with current data plans.
Vodaphoney has showed a real lack of vision and creativity - everything the iphone was supposed to be.
The iphone will now be a wifi itouch phone instead of a multi purpose 3G device.
Enjoy the muffins at the debrief :-)
Meh, don’t like? Don’t buy it.
I don’t, and I won’t (except from overseas).
PR nightmare, that should have been a HUGE win from VF. Still, I’m sure they’ll sell as many as they can put on the shelves.
Maybe reaching too far, but I also see it as a big loss for NZ in terms of changing the way we think about mobile data and the talent and productivity gains it might bring us.
Maybe Telecom will come to the rescue. (Can’t believe I said that, but then VF is the global giant and Telecom is a NZ company).
I will happily switch from my current VF/ihug set up to TC if they can bring prices closer to ‘fair’ (and in my unedcuated position I consider that anything closer to parity to Australian markets).
ps; Mark got ripped on Campbell, but then there was really no position he could take that would work - was surprised he turned up at all really. The PR advisors should’ve known better and said he was unavailable - or on holiday ;-).
@Povi Masima Muffins - didn’t think I would be invited !
I’ve seen the vitriol - I just think what they messed up was splitting the headline price and the plans.Implied iPhone would be cheap when it wasnt. Will be interesting to see what the Parallel Importers seel them at - I am holding my breath.
Have my views over here in detail if you are interested - in detail below if you don’t want to link
http://szikszai.blogspot.com/2008/07/vodafone-nz-iphone-and-marketing-step.html
There’s been an outrage on Vodafone NZ’s iPhone plans. I’ve been commenting on Rod Drury’s blog on Mark Rushworth’s performance on Campbell Live.
I’ve known Mark for a good while now and thought he did well given the approach that John Campbell took. Unfortunately for him he couldn’t get the really good news out there.
There is a lot of emotion in the NZ market about Vodafone ‘ripping people off’ and its easy to see how that could happen. The fact is, with the exact same information and a different approach this could be significantly different - and it all comes back to wanting to take the marketing a step further than they needed to.
My hypothesis is pretty simple - Vodafone have Telecom on the ropes at the moment and want to make a killer blow. iPhone is pretty close to that. However instead of landing one massive punch, they have only ended up with a relatively weak hit. And that is as a result of trying to overplay their hand.
The overplaying of the hand was by a two stage release of handset prices and plans.
The announcement of $199 sticker price for the iPhone on Monday was designed to maximise the hype around the iPhone. That price all of a sudden meant that someone on Sunday who thought iPhone was unobtainable found that they could afford the entry ticket. That would have got a lot of people very excited (hey - we were talking about 2 of them at home!). An implied promise was made - you could afford the iPhone.
The release of the plans the next day broke the promise - it wasn’t affordable.
That is the root of this issue - an implied promise was made and then broken.
When you look at it in more detail, its a like a fighter who has swung to land the killer blow and then ended up hitting himself in the back of the head. Here’s why.
1. There was no benefit in splitting the plans and the headline price - the people who are most upset now are the people who would have ruled themselves out of buying an iPhone already based on their expectation of the price. Vodafone have upset their next tier of customers down. By launching the sticker price and the plans on the same day these customers would not have even been in the conversation.
2.These upset customers are looking very deeply into Vodafone plans - the issues around prepaid, $1 a day data and lack of total customer choice means that Vodafone is getting more scrutiny that it would have expected and is having to defend this.
3. What has been missed is that the $250 plan, when compared to existing Vodafone plans is actually very sharp. It’s a 10% saving on an equivalent plan for the same bundle - it costs less. No-one has picked that up. In fact most people seem to think this is somehow a rort. So Vodafone has actually cut some prices but is not getting any credit for it.
4. Instead of basking in the glow of iPhone solely, it opens up an opportunity for Telecom to do something different with mobile data pricing. Whether it takes this opportunity is a moot point - this is an opportunity that simply was not there at the start of the week.
My view - launching these plans in one hit at an event would have given Vodafone a pretty strong position. Trying to milk it has led to an instant loss of trust.
Will be interesting to see how Vodafone learn from this - that is the next challenge - my guess is that they are locked into an Apple contract that gives them limited flexibility at this point and will just have to tough it out.
Disclaimer - I am working for Telecom Wholesale today, 9th July 2008 (and for the next two days). These opinions remain my own and do not represent any company position.
Have not read the commentary in detail. There is too much.
Vodafone offer 6GB for $90
I don’t think that is outrageous, all things considered.
Buy the iPhone outright (or finance it if you must) and make your own plan.
@miki “lack of trust”. Companies fail on creating trust.
Vodafone failed on me - and that’s why I ported my ten year old 021 number to Telecom as soon as number portability came out.
@chris… read the FAQs. You can only make your own plan if you are allowed to resign an existing plan. Otherwise you must buy from these “specials”.
You are doing it wrong…
This has been a PR disaster for Voda - it’s how to take the hottest product on the planet, and turn it into a stick for consumers to beat you with. I’m sure it will turn up in the textbooks as the best possible example of how not to launch a product.
- Clarke
@Clarke: I agree, it is a PR disaster. From the complete lack of Vodafone communication until a few days ago, causing a loss of the momentum from Apple’s own marketing in the last month, to the complete lack of iPhone PR on the Vodafone homepage during that month (they were still featuring the usual range of craptacular Korean junk yesterday), to this debacle, they really show they don’t have a clue.
Overall, the whole thing just leaves me laughing; once again, NZers are reduced to begging relatives and friends in other markets to purchase goods at reasonable prices and send them home. Good old third world NZ, with a massive multinational ripping us off yet again.
Vodafone has always overcharged, both for the phones, and the plans. All the comment about the iPhone-specific plans being good value compared to the regular vodafone plans are like prisoners saying that the porridge tastes great compared to the gruel. All I can say is.. roll on November. I will be cheering Telecom at the launch of their GSM network, when we finally will have some competition in the GSM space.
Oh yeah, and “iPhone Dev team”’s new iPhone unlock tool is due for release in 3 days. So I’ll be running my iPhone (imported from Hong Kong) on a pre-pay plan.
Seems to me that voda know they have a relatively short window of opportunity on this one - with WCDMA going live in a few months this is their one shot at performing a rort. Hook people on and worry about the inevitable price cutting later
Also seems to me that they know that they have the other telco(s) by the balls. If someone else were to undercut it would create a price war that would do no one any good.
Sure announcing the $199 a day earlier was kind of bizarre, but maybe just maybe voda is thinking that “any publicity is good publicity” - there are probably 100000 NZers that now know about the iPhone and didn’t before - what is that sort of marketing worth
It is starting to look like that much of the iPhone discussion is beside the point if the available mobile data plans are (for NZ based users)
a) inflexible and restricted if you have an iPhone
b) expensive - especially on the iPhone
c) really, really slow anyway. (almost as fast as dialup)Can anyone explain if that is just my location or if the 2 /2.5G network goes slow for everyone
On the other hand those phone look still look great so we just need Vodafone to come up with some new price plan models and more flexibility or we have to work around their systems and do what most of the 5000 first generation owners are doing anyway.
The question for Vodafone is - the spotlights are on / Is anyone home? Can they / will they make some changes and rescue their reputation?
It is interesting to see that Rogers Canada have (if reported accurately) earned the ire of apple with very similar plans.
My take on this launch is that they were paranoid about undermining their existing revenue streams from devices sales of RIM and other high end devices. They had to price it to match or kill the sale of Blackberry’s (for example). The matching of the service plans could be seen as naturally falling out of this and the lack of competition.
I currently pay about $62 a month (Youchoose60 + 200 texts + 120 ofpeak minutes), so readjusting to $80 a month isn’t that a big a deal financially, but its worrying to feel you need to stay within 250MB of data.
Breaking it down, $62.85 x 24 months, is about $1508, if I stick with my current (very simple) phone and plan.
Switching over to iPhone 8GB 250MB plan is $549 + ($80 x 24) = $2469. Thats $961 more. And just under the buy-outright price of $979. I’m sure I can cope with that over two years. But can I imagine being stuck on 250MB a month, even in 2010? That’s nutty.
So, what if I build my own? I can do this for $1000 more over two years, and only need to lock me in to the data side of it for 1 year, by which time, we might get, well, maybe a whopping 2GB for the same price..
Vodafone has a amazingly complex set of options, but one that stuck out was a Vodafone “BestDeal” Talker plan, upgraded. Sadly only with a 24 month contract: (See http://www.vodafone.co.nz/specials-promos/best-plans.jsp#upgrade)
This is:
$59.95 per month, giving you 120 anytime minutes, 200 texts, one free call-all-you-want person.
$49.95 per month, broadband 1GB. If you use up to 2GB, you pay $10 more that month, which is a nice safety net.
$979 upfront for 8GB model
= $3616 over two years.
So, the question is:
1. Do nothing, no iphone. Keep paying a grand and a half over the next 24 months.
2. Pay extra grand over two years, keeping roughly same minutes/texts, but get an Iphone with 250MB
2. Pay extra two grand over two years, keeping roughly same minutes/texs, but get an iPhone with 1GB
Decisions, decisions.
I would have enjoyed seeing more attractive plans from Vodafone, especially since they had all sorts of ways of being creative. E.g. free national data; data and minutes and texts using a shared quota so you can talk heaps one month and then download lots the next.
“My take on this launch is that they were paranoid about undermining their existing revenue streams from devices sales of RIM and other high end devices. They had to price it to match or kill the sale of Blackberry’s (for example). The matching of the service plans could be seen as naturally falling out of this and the lack of competition.”
This really hits the spot. Vodafone can’t price the phone cheaper than all of these other similar purpose but still selling phones. Where did the Blackberry plan prices come into play in comparisons? Both with Telecom and VF in NZ. They have a similar data subscription based service and cost very similar to an iPhone. How are you they supposd to sell the Blackberry if they have a much better price on the iPhone. The customer says ’so this has an iPod, maps/gps, is much bigger, works with exchange, has a full browser and is cheaper than a Blackberry???’.
To get any real benefit from having an iPhone you HAVE to have a data plan. Not having to think about where you are to access services is really a defining feature. If you were one of the previous users in NZ, the arguable minimum you could pay was already $80 a month, ($40 YouChoose, $40 for 200MB Data). The new plan gives you more data/minutes/texts than this old setup, what’s to complain about. Sure, I and everyone in else in NZ wants to pay reasonable rates on our cell phones, but since when has $0.49 for calls been reasonable in any other country?? Rather than Campbell Live just having a go at the rates of Data, he should be looking at all cell phone rates.
The real killer in terms of the pricing is that previously the iPhone only cost $500NZ. So for the last 9 months (the US price drop) we’ve become used to thinking of the iPhone as a $500 product. However, now, in the US the iPhone is (unsubsidised) $599 US (8GB). Which (not quite) the $949 RRP here is still the new price of the iPhone.
“Overall, the whole thing just leaves me laughing; once again, NZers are reduced to begging relatives and friends in other markets to purchase goods at reasonable prices and send them home. Good old third world NZ, with a massive multinational ripping us off yet again.”
Sorry… yes, the iPhone used to be about $500 NZ, but now the cheapest you will get it is about $599US. So, you may save a little bit of money getting it from the states, but only similar to the difference of an iPod Touch between the US and here.
If you already have the original iPhone, there is absolutely no point in getting the new one without a data plan, as all you are gaining is 3G… and GPS is irrelevant without data, unless you want to see how accurate the maps can locate you at your office and the cafe’s you visit. And with the few available Wi-Fi hotspots, you may as well just add bookmarks in your Maps app.
Regarding Vodafone having a Press Release saying from $199. That was the stupidest press release ever, way to go, idiots. I really want to talk to the people that thought that one up.
So not sure if you all have seen all the other options around the world which make VFNZ look like “stuck in the past” rip off merchants, but this one from the UK looks like the way it should have been - why did I bother to register with VFNZ if they werent going to give me a value proposition (rather than just a product overview email)! shame on you VFNZ.
In the UK you can buy before 11 July and have it couriered to you on the day…..O2 get it Vodafone - you dont!
http://www.engadget.com/2008/07/07/iphone-3g-launching-00-01-nz-time-home-delivered-in-the-uk/
Oh, mobile broadband appears to be for 24 month term, too. So if a better deal comes out in the next 2 years (which I have to say is really quite necessary), you’d need to factor in the $30-$160* early termination fee.
* http://www.vodafone.co.nz/iphone/plans.jsp, open “Ending your contract early (Early Termination Charge)” and view the line marked “Broadband 1GB”
Mark Rushworth also noted that the 5000 first generation iphones were over $1200, implying that they’re now cheaper through vodafone. Mine was around $800.
Also, as someone above pointed out, NZ doesn’t even have a 3G network in most places, so what’s the point?
The iphone is fantastic, the wifi aspect meets almost all my requirements for using all the features of the phone. I’ve turned off the data from my account completely and the phone still rocks.
[...] early adopters and business users. They’ve elected a low volume high margin model. Rod Drury argues that data charging should be done on a cost plus model, rather than the consumer monopoly type pricing that we are seeing. I agree with his idea that the [...]
@Philip Lamb:
In the US they have changed the rules so that you much sign up and activate your contact/iPhone in the store before you can leave. So no more buying contract free and then hacking them to work on other networks :(
I have to say listening to people breaking down their current cell plans really woke me up. I only left NZ just over a year ago but obviously slipped into cheap american life pretty quickly :)
Currently I pay on AT&T:
$35pm and that gets you:
- unlimited mobile to mobile calling on AT&T (anytime of the day)
- 1500 mins to anything national anytime
- 200txt/pxt (its only just really catching on still here)
$20pm for unlimited data (get close to a MB/sec on the 3G network)
Its hard to imagine having to watch data. I mean who does that? Do they expect my mother to watch how much data she is using? thats crazy! :)
-Chris.
Vodafone NZ has lost the plot completely.
Just received a text from Vodafone advising that from 1 August 2008 it will cost $1.00 for every call to Vodafone Customer Services from a prepay.
VF suggests that people use the internet to manage their accounts instead of ringing customer services.
Three points:
1. How much of my data plan is that going to chew up and at what cost?
2. In my experience, the My Vodafone server has been down 70% of the time I try to use it.
3. The information stats, etc on My Vodafone are completely wrong most of the time anyhow. For example; the “total used” for the last month shows as 19.2 GB. When I look at the daily breakdown and manually add up the numbers they come to 3.8 GB. According to the Vodem data counter hoodacky on my laptop it’s 3.1GB. When I ring Customer Services, they confirm it’s actually 3.1 GB.
Roll on a new 3G provider!
Ok, so rang up vodafone and it seems anyone with a history of having an account can get this:
135 minutes
600 text
1GB data
Best mate (free calls 24/7 to a nominated vodafone number)
for $109 a month. (plus a grand or so to buy the phone)
Start with TXTer plan and upgrade from 60 to 120 mins with $20
http://www.vodafone.co.nz/specials-promos/best-plans.jsp
I got 15 extra minutes a month from my “customer loyalty” ( 8 years) ring vodafone to get your number
then add the 1gb mobile broadband for $49.95
Now if we could just drop $20 a month in price we’d be happy.
@sigurd
So let me get this straight….
You want, (like many)
Same deal as the base iphone plan but 750MB more data,
(which they usually charge $7.50 for usually using 1GB doubled for $10)
But you’ll accept,
no subsidy on the iPhone.
+
still locked into 24months (broadband plan contract terms)
+
pay $29 more per month!
This is crazy!!!
Don’t vodafone get it?? The consistent complaint is the level of the data caps.
It’s a fantastic device. $80 + $549 for 120min/600TXT and 1GB for the 8GB phone is perfectly reasonable.
If vodafone would raise the data plans to even 1GB, 2GB and 3GB they will sell these quicker than they can get them in.
Putting it down like that actually has me thinking,
Looking at the current subsidies, Vodafone theoretically would owe you $979-$549 = $430.
Which is $18/month for 2 months.
Which is just under the difference between the between the 200mb and 1GB plans broadband plans as they currently stand.
So really, you should be demanding that 1GB for free!!
@Siggy:
You should be able to get a handset subsidy from resigning your plans: Choose 60 gets you $130 off any phone on a 2-year contract, and a 1GB broadband plan gets you a free vodem (”worth $299″), so $400 off your upfront iPhone purchase wouldn’t be unreasonable. Apparently different dealers/stores can negotiate different subsidies, so it might depend on who you go to.
The Australian Vodafone plans have been announced here: http://store.vodafone.com.au/iphone/ the plans are better in every way for value for money. But baring in mind that our international data prices are always going to be more here in NZ then Australia.
It is interesting to see how much subsidy Australian Vodafone is giving compared to NZ vodafone on the Australian comparable $69 plan.
Australia
$69 plan includes $310 of talk, TXT & more plus 250MB of data per month
iPhone 8GB for $189 upfront or iPhone 16GB for $309 upfront
New Zealand
This compares to our $80 plan includes 120min of talk, Txt and 250mb of data.
iphone 8GB for $549 upfront or iphone 16Gb for $699 upfront
So the question is why do we have to pay so much for the iPhone on our plans?
> $69 plan includes $310 of talk, TXT & more plus 250MB of data per month
Don’t quite understand that as they don’t quote the per minute or per TXT rates that assumes. Browsing around the rest of the site I suspect it may be something like 40c/min plus 30c flagfall for calls, and 25c for TXTs.
So .. you could do 1240 TXTs and no calls, or 442 one minute calls and no TXTs, or any other combination? Or to make it comparable to the VFNZ plans … you could have 600 TXTs and 228 one minute calls.
@al,
You’re right. If I choose the 250MB/$80 plan, then I get 250MB, but I pay 10c/MB which is $100 for a gig. That’s the problem / worry. How can I be sure I don’t actually download some stuff? Its like driving a car and having to stop every 5 minutes to ensure your tyres aren’t about to burst and kill you, because the vendor has supplied you only with emergency spares. Hardly a way to drive.
Rogers in Canada have flipped
$6GB for $30.
http://www.engadget.com/2008/07/09/rogers-caves-on-iphone-3g-plans-offers-up-6gb-for-30-a-month/
Aussie Vodafone plans and deal is way much better than Vodafone NZ……
16GB for A$219 purchase with
MyBusiness Cap for Apple® iPhone™ 3G
The $99 MyBusiness Cap Contract for Apple® iPhone™ 3G, designed for business people who love their iPhone. Pay just $99 a month over 24 months and get:
iPhone™ 3G 8GB for $4.13 per month on MPP? (or $99 upfront) or iPhone™ 3G 16GB for $9.13 per month on MPP? (or $219 upfront)
A massive $600 credit^ a month to use on calls to landlines and mobiles, TXT, voicemail and heaps more
500MB of included data over the Vodafone 3G network per month
Plus, connect up to 4 people on the one account and talk to each other for FREE with Mobile Office
I dont get it……we are getting ripped most probaably because of country size and location…..but one would expect Vodafone global buying power to enable pricing to be the same everywhere (on exchange rated basis)..
what gives?
1. Hopefully when Telecom will be selling the iPhone too we will see some competition.
2. People would not be as upset if Apple & Vodafone hadn’t set the expectation the way they did. Apple said US199, VF said NZD199. Real cost: OMG. Of course it couldn’t be cheaper than the iPod Touch but still..
3. You like the iPhone? Just get an iPod Touch and a Camera Phone. Maybe a SonyEricsson Kxxx?
How much of this is down to Steve Jobs doing a number on the world by saying the iphone would cost “a maximum of $199″ without spelling out that was the AT&T price on a contract over three years?
and how much of Vodafone’s timing was down to Vodafone NZ? I hear that Apple got snakey because of the time zone thing and hadn’t realised midnight in NZ was ahead of midnight in the US.
And do we really think Vodafone NZ would be setting the pricing/terms of service without sign-off from Vodafone UK? Surely not.
Say what?
Midnight in *any* country not in north/central/south America is ahead of midnight in the USA.
@Bruce:
You would be amazed at how many americans dont know/understand that. I often hear people talking about the whole world when what they really mean is just the USA :)
@Karl “our international data prices are always going to be more here in NZ then Australia.”
Why is that?
@Sam:
4 million people vs. 25 million. They can pipes/tubes and spread the cost over more people. + they are closer to Asia so those pipes dont need to go as far.
For a look at how the internet tubes work see (0:50): http://www.thedailyshow.com/video/index.jhtml?videoId=126985&title=headlines-internet
@Chris:
Even with all that extra cost to get to NZ, companies such as xnet and TelstraClear still manage to sell domestic customers GBs at $1 or $1.50 each. You’d think at the very worst (surely the largest mobile phone group in the world can do better?) Vodafone could get some from them, slap a few hundred percent markup on them, and on sell them for maybe $5 a GB, rather than $100 or $1000 or $10000.
So Vodafone can’t give you a generous data allowance for your iPhone because it “costs too much” but will happily give me 1GB free if I move my PSTN line to them? Somebody pull my other leg..
@Bruce Brislen
Hi Bruce, I see you are back from holiday - hope it was relaxing after lead up to 3G launch!!
meanwhile the discussion continues on data plans and cost per GB.
We are seeing other mobile providers/ISPs around the world reducing drastically the data prices, and we note that VFNZ has also done likewise somewhat.
But there is still further to travel……
What would be really nice is if Vodafone can put this all into context of their journey and where it is heading……..
@GI - It’s Paul Brislen - not Bruce
Did any media cover how sales were going? I’m surprised I didn’t see anywhere saying “NZ iPhones all sold out…”
As best as I can make out, there’s no way for me in Wellington to buy an iPhone. I was in San Francisco when it launched here, and I when I returned yesterday, I rang the four stores listed at vodafone.co.nz. They all said they sold out on back on Friday.
Well I bought a 16Gb iphone on Friday and my dataplan of 3gb a month and a you chosse 20 has explicitly locked out Iphone access to data so it can not be used other than to make calls. Paying for data that I can’t use, fabulous vodafone,you are taking the absolute mickey now and I shall look at the contract very carefully, how can you sell a data paln to me and then later on say, ah, but you can’t use an iphone on it unless you pay for our outrageously expensive mb under a iphone contract.
Fiona, try http://www.unlockit.co.nz/ for a solution to your problem.