Competitive pricing is a win for customers

1 November 2007

Competitive pricing is a win for customers

The launch of Vodafone's 12 months' free broadband offer has stirred up the market in the way that no other product has for quite some time, says Vodafone's general manager of marketing for Ihug, David Joyce.

"Vodafone's competitors are complaining that the offer is anti-competitive and amounts to predatory pricing. Meanwhile our customers are loving the opportunity to dive into broadband with 33% of all customers signing up in the first month being new to broadband," says Joyce.

"We are fully focused on giving our customers what they want and we are delivering on the promise of making broadband more accessible to more New Zealanders."

Vodafone has considered the issues at hand and decided to extend the two offers in the market.

The initial offer, bring your landline to Vodafone and take out our Talk2 tolls package for $20 a month and receive the Broadband1 plan absolutely free, will now run until the end of November. The second offer, bring your landline to Vodafone, buy any of our You Choose 60 or higher mobile plans and receive Broadband1 absolutely free, will now run until the end of January. Both plans require customers to provide their own modem.

"We have increased our fixed-line broadband customer base by almost 30% to date so we're extending the offer to give more New Zealanders a chance to find out what broadband is really like. Customers who want more than the 1GB of traffic on offer in Broadband1 are able to buy a higher-grade plan and receive a discount of $30/month as well, so even the heavier users can make the most of our offer," says Joyce.

Bundles are commonplace both within the telecommunications market and in the wider retail environment. Sky TV sells channels bundled together and has done for years. Selling one product below cost is also not uncommon. Orcon has made it quite clear it sells its entry-level broadband at below cost *.

Telecom says it has been subsidising rural customers with earnings from the urban customers and continues to do so as well as selling its entry level broadband plan for less than the wholesale rate it charges competitors**

ENDS

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