Wednesday, July 30, 2008

Why Vodafone introduced the NZ iPhone plans

There is a very clear reason why Vodafone introduced the initial contract plans for the iPhone - reducing ARPU for postpaid customers.

This article suggests postpaid ARPU fell around 10% in the quarter. Ugly. Driven by the current economic situation as opposed to the competitive situation, in my opinion.

That being the case, iPhone presented an opportunity for Vodafone to increase ARPU through higher rate plans with a lower initial hurdle. All very sensible but as we know the marketing execution did not have the intended result.

I had a look at the Vodafone site today to check my facts on the iPhone plans - being offline for a couple of weeks I missed that the high end plan that caused all the angst seems to have been removed and it is much clearer that you can use other existing Vodafone plans. I was going to say that Vodafone had introduced these plans purely for raising ARPU but it appears that they listened (to some extent) to their customers post-launch and at least tightened up the information. 

Related I heard a rumour (unsubstantiated) that they are in the dog-box with Apple as a result of the negative publicity around the iPhone release. Probably opens up another window for Telecom as I assume being in the Apple dog-box means that iPhone stock allocation from Steve Jobs is not forthcoming...


6 comments:

Bwooce said...

I think that while they left it unlocked, they did the next best thing (from their perspective) by trying to lock the data APN to an iPhone specific data plan. The data plans in turn have a 24 month contract (irrespective of anything). And so you have customers locked into a 24 month contract even if they buy the thing outright.

Nice to see www.unlockit.co.nz appear to help people out, but it won't stop the majority signing up for 24 months because they're told it is the only way to use the data side of the phone...

Miki Szikszai said...

@bwooce you're right - still no prepay...

Anonymous said...

I think you'll find if you look at the ARPU for Vodafone that it's declining at the same rate as the agreed decline in mobile termination rates or there abouts. Year on year the decline isn't as bad as you say..

As for the iPhone plans, what makes you think it's Vodafone and not Apple that's decided to use a "locked down" APN?

Miki Szikszai said...

Mobile termination rate decline is fixed to mobile only. Given ARPU covers blended F-M, M-M and M-F if the rate of decline is the same as the mobile termination rates then you'd expect only a proportional decline. This is faster than this - my view is that this ARPU decline is driven by the current economic 'contraction'.

As for the APN - could easily have been Apple who did this given the AT&T plans etc. They have a 'unique' deal with carriers for this phone compared to the Nokias etc.

Miki Szikszai said...

Anyway - point is that Vodafone ARPU is declining. iPhone was an opportunity to tie in some longer term, higher value ARPU. That, combined with whatever limitations exist in the Apple contract, means that's why the iphone plans are what they are. And why there will be no 'official' prepay

Anonymous said...

Good point - don't forget the iPhone launch hasn't impacted on any ARPU figures released yet. It comes in the next quarterly result, not that one.

oh, prepay? watch this space.