CallPlus/Slingshot has signed with Telecom as a Mobile Virtual Network Operator, ditching its existing contract with Vodafone.
CallPlus CEO Mark Callander says the company has made the switch after reviewing Telecom’s service offering. He also notes that according to independent tests carried out by TrueNet, Telecom’s XT network in central Auckland has the best download and upload speed for users accessing the web on their mobile phones.
“The use of smartphones has grown dramatically in the last couple of years and they are now an essential tool for many people. The Telecom network is designed for smartphones and moving mobile data around the country at ultra-fast speeds.”
Callander says the agreement with Telecom is a “thicker MVNO” than the agreement with Vodafone and will allow deeper integration with CallPlus’s fixed line network. He says CallPlus will be able to offer business customers group data plans, and in the consumer market it can target prepay customers.
The transition from Vodafone to Telecom will start in mid-October and is expected to take several months. Callander says the company will be announcing new mobile plans in two to three weeks. For many customers it will involve a handset change, as Telecom’s mobile network operates on a different frequency band to Vodafone's mobile network.
Callander says switching wholesale mobile providers will be a costly process for the company but it is better to make the transition now, when CallPlus provides an MVNO service to “thousands of customers”, than in the future when it might have 100,000 mobile subscribers.
He’s not concerned about Vodafone’s on-net pricing plans, which has seen Vodafone dominate the mobile market in Auckland (at the recent mobile termination rates conference held by the Commerce Commission, Vodafone said it had 68 percent of the Auckland market). Callander says there has been a shift to any-net text deals in the past 12 months. According to the Commerce Commission’s mobile monitoring report released this month the percentage of cross net voice traffic was 17.6 percent for voice and 23.1 percent for text in the three months following the regulation of mobile termination rates in May.
Under the MVNO agreement with Vodafone, while it did have access to some of Vodafone's on-net deals CallPlus couldn’t participate in the Best Mates plan, which enables customers to call up to three numbers as often as they like for a fixed monthly amount.
In total CallPlus/Slingshot has around 150,000 customers in the business and consumer market, and it will have unbundled 105 exchanges by the end of the year.
Telecom Wholesale general manager of marketing and product David Joyce says CallPlus is New Zealand’s second largest MVNO.
“MVNO is one of the fastest growing areas of our wholesale business and this deal is a huge endorsement for the current proposition as well as for the WCDMA network,” Joyce says.
At its half-yearly results briefing,Telecom announced it had 1.2 million connections on its XT network, which represents 56 percent of its mobile subscriber base and 82 percent of cellular revenue.
To date Vodafone has been the most successful in signing up MVNO players with its largest mobile wholesale customers being TelstraClear and Orcon. When asked to comment on CallPlus’s defection to Telecom, a Vodafone spokesperson emailed Computerworld the following statement:
“The wholesale market is a competitive and vibrant marketplace. We are competing hard and will continue to do so, we wish CallPlus all the very best as they continue their journey in the mobile space.”
In its annual report on the telecommunications market released in April, the Commerce Commission notes that MVNOs have yet to gain a significant share in the New Zealand market, with reported total subscribers 37,000 and retail revenue for 2009/10 at $25 million.