Customers large and small are being forced to rethink their mobile communications plans as the simmering row between Vodafone and TelstraClear deepens.
Ernie Newman, CEO of user group TUANZ, says users are caught in the middle of an “extraordinary situation” not knowing who they are “the property of” and condemns the behaviour of both telcos as unprofessional.
TelstraClear, meanwhile, has come out swinging against Vodafone, as relations between the telco giants curdle even further after the Tauranga Unplugged fiasco.
In response to Vodafone saying it will “assume direct control” of some 30,000 mobile customers who had bought service via TelstraClear under an agency agreement that expired on June 30, the Australian-owned telco says it intends to seek a wholesale deal with Telecom, and leave customers with a choice of whether or not to go to Vodafone.
This would, according to Raymond O’Brien, TelstraClear’s head of wholesale, involve switching from GSM to CDMA technology after an unspecified “period of discontinuity”. Asking customers to switch their GSM handsets to CDMA isn’t an issue, O’Brien says, but roaming overseas is, unless customers go with Telecom’s WorldMode phones that work on both types of network.
Telecommunications analyst Darian Bird says signing an agreement with Telecom won’t solve the problem as business customers may be hesitant to move onto CDMA and then back to W-CDMA in a year’s time, changing handsets and mobile broadband devices each time. Bird says computer purchasing plans would also be affected, as there are already notebooks available with W-CDMA embedded, but not EV-DO.
O’Brien has slammed Vodafone for being unable to offer TelstraClear a wholesale deal to replace the agency agreement. “We had to come out from the existing agreement as it had little to offer us,” he says, and adds that Vodafone only gave three months’ notice when terminating the agency deal.
Tom Chignell, Vodafone’s general manager of corporate affairs, however says that after TelstraClear was notified of the termination of the agency, a new proposal was put forward.
“At the time we were also negotiating a wholesale agreement with them and knew that it would not be ready to launch until after the 30th of June, leaving them with a gap in their mobile offering. The proposal was to extend the notice period for termination of the agency so that it coincided with the launch of the wholesale service, some months later,” Chignell says.
According to Chignell, TelstraClear rejected this offer and wanted to completely renegotiate the agency for the period from July 1 until its expiry. Vodafone, however, was “not prepared to waste time and expense on such an exercise which would have been for a three-month term”.
Both telcos say customers will continue to receive mobile service. O’Brien says Vodafone asked TelstraClear to support mobile customers indefinitely after the agency deal expires, and this will be done.
According to Chignell, the support is TelstraClear’s obligation under contract, and will only be in effect until the last customer has transitioned to Vodafone.
IDC’s Bird warns that Vodafone is running the risk of irking the regulator in assuming that because Orcon and Compass were happy with one agreement, then everyone else should be too. Vodafone is playing a dangerous game, Bird says, as the government is looking into the lack of competition in the mobile market.