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Vodafone’s next desperate move in mobile market campaign

I couldn’t really blame them, I guess.  The duopoly, one must admit, is rather competitive and considering who they’re against, Vodafone is doing remarkably well.  Desperate or not desperate, they will do whatever is necessary to maintain and build on their 55 per cent of the mobile market, and to be fair, why shouldn’t they?  The alternative is an eventual monopoly, and when it comes to the mobile market, monopoly means doom.

But I’m having trouble understanding their latest move.  Their TXT2000 promotion is, I would think, intended to compete with Telecom’s $10TXT, and the value offered by TXT2000 far outweighs that of $10TXT.  Unlike their Free TXT Weekends and Telecom’s equivalent, TXT2000 comes with several catches.

TXT2000 isn’t available on all plans like $10TXT and Free TXT Weekends were.  You have to switch to their new plan, Supa Prepay.  This effectively means the advantages of Motormouth are forfeited.  You either get rewarded for loyalty in text messaging, or loyalty in calling, but you can’t have both, no way.  Rather, if you want the 2000 text messages, you have agree to pay 89 cents a minute—80 per cent more—to call your Vodafone friends.

With TXT2000, you have to buy the whole 2000 text messages in advance—so you pay $10 whether or not you use $10 worth of text messages.  This might seem trivial to many people, but I say it’s a moot point.  It creates insecurity—with $10TXT, where you’re charged at normal rates until you reach $10, you know there’s no risks in taking it.  With TXT2000, there is, at the very least, a small risk in its undertaking.

Thirdly, such is the height at which Vodafone considers Supa Prepay that the expectations of those customers is that top-ups are every 90 days.  This makes it the odd plan out—every other plan requires top-ups only every year.  The minimum top-up is below the threshold for TXT2000 and only marginally above the threshold for BestMate, but it starts to push things for the $2 for two hours promotion.  In any case, it means that, in effect, you’re more committed to the programme.

Whether most people will realise the catches is questionable, and for many mobile users they will probably not be of great concern.  But with Vodadone going four times further than Telecom, I sit and wonder what’s in it for them.  There’s the catches, of course, if people fall for them.  But in giving away 2000 text messages for $10, Vodafone loses $390, per customer, per month.  Telecom loses $90, but that’s besides the point.  For Vodafone to lose $390 per customer on Free TXT Weekends, the customer would have to send between 195 and 244 text messages on each of the weekend days (depending on the month).  It may well be possible to do this, but not without forfeiting a life.  That’s what, one text message, every six minutes, for the entire weekend, including through sleep time?  (I guess maybe some people do that.)  Even if I were to assume one text message every ten minutes, it would only cost them $230 a month.   By comparision, 66 messages per day, as would be needed to make full use of TXT2000, is not a difficult feat.  I might be wrong, but I say this promotion’s more expensive.

This might be just me thinking about this a lot because, for me, it means I have to start spending a significant amount of money on my phone.  Since I started using a mobile phone, I’ve never exceeded $5 in a month, and this looks set to change.  Can I afford $10 a month?  Am I prepared to sacrifice the 49 cents a minute rates for calling?  Do I want to commit myself to this new plan for a minimum of 90 days?  It doesn’t really help that I’m sort of jobless.

But all in all, I must admit I was a little bit surprised at Vodafone’s next retort to Telecom’s mobile promotions.  I wasn’t really expecting a lesser form of a copycat approach.  At least, not from a company that, not so long ago, criticised TelstraClear for trying to be Telecom.  Vodafone could, perhaps, think of their own promotions—and sticking in catches doesn’t count as an “own promotion”.  Otherwise, they are in effect doing what they said was TelstraClear’s “losing strategy”, a “strategy of copying Telecom”, with their own spin on it: a few strings attached.

Related Links

Vodafone’s TXT2000 promotion allows its customers to buy 2000 text messages to other Vodafone mobiles for one month for $10. It replaces Vodafone’s Free TXT Weekends promotion, which allowed customers to text message during weekends to other Vodafone mobiles for free. Telecom’s $10TXT promotion allows its customers to send up to 500 text messages a month to any mobile with a $10 cap on it. For explanations of other plans, see the links above.

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