Telecom on the ball to widen mobile gap

By PETER GRIFFIN

A 300m strip of road separates the Auckland strongholds of Telecom and Vodafone, but the divide between the two in the billion-dollar mobile phone market is getting smaller by the day.

As Telecom Mobile's new head, Kevin Kenrick attacks the job of luring customers to the high-quality but under-used 027 network, Vodafone is drawing neck and neck with the company that once dwarfed it.

At the start of the year 9000 customers separated the two - Telecom had 1,229,000, Vodafone had 1,220,000.

Few would argue that Vodafone has made impressive progress in building the small operation it acquired from Bell South into a serious rival, a turn of events that caught Telecom off-guard.

The problem Kenrick now faces is that nearly a million subscribers are hanging on to out-dated 025 mobile phones that offer Telecom little scope to make more money from them.

The solution, says Kenrick, lies in giving users something that will make them upgrade - and overhauling Telecom Mobile's stale image.

"The perceptions of Telecom Mobile up until now have been shaped by the limitations of our past, rather than what's possible for the future," said Kenrick, a seasoned marketing man, who spent 5 1/2 years at Lion before joining Telecom.

"We've got superior technology, now the emphasis is on marketing what people can do with it."

He plans to draw more heavily on Telecom Mobile's internet provider cousin Xtra in a bid to make 027 services more attractive. A range of mobile services built around Telecom's sponsorship of the Super 12 rugby competition kicks off the closer relationship.

"You've got Sean Fitzpatrick giving pre-match commentary over an 0800 line, scores from other matches coming in via text message and the capability to look up player profiles during the game," said Kenrick.

More of these types of home-grown services were in the pipeline, and applications would also come through Telecom's 19.9 per cent stake in Hutchison Australia's mobile venture, H3G, which allows Telecom to buy from a global pool of services churned out by Hutchison's developers.

Telecom's Advanced Solutions division is responsible for developing services for the business market.

Kenrick does not get excited about the "youth market", which Vodafone has largely won with clever marketing and zealous promotion of text messaging and SIM-based services.

"We're less concerned about age," he said. "It's more about their profile and what they want to do with their phones."

There would be no "foot race to gain customers".

Customer numbers aside, Vodafone's subscribers are spending more.

The all-important ARPU (average revenue per user) statistics show Vodafone is tapping its subscribers for more each month in the prepaid and post-paid account categories.

Customers topping up their phones with pre-pay cards spend on average $8 a month with Telecom. Subscribers to Telecom services resold by third parties average $3 a month.

Vodafone's prepaid customers spend around $25 a month. The post-paid account situation is similar. Telecom contract-holders spend on average $74.60 a month, their Vodafone counterparts $153 a month.

After a failed ad campaign that Telecom insiders claim cost Kenrick's predecessor, Lorraine Witten, her job, Telecom is taking a much simpler approach in trying to lure customers to its high-speed mobile network.

"The adverts were too complicated, they focussed too much on the technology," said Kenrick.

"With 'go27', we just interviewed a bunch of people and asked them what they wanted to do with their phones."

A mass-migration of subscribers to 027 is Kenrick's ultimate goal, and in the coming months attractive upgrade deals will be waved about to try to achieve that.

Kenrick retains his role as Telecom's marketing manager, making him another of the company's top brass juggling two major roles.

With the departure of AAPT head David Bedford, chief financial officer Marko Bogoievski is doing the top job in Australia until a new, probably Australian, candidate is hired.