Vodafone floats bid to offer local calls

Vodafone is planning to introduce a local call service using cellphones that also act as home phones.

The company would not comment on its plan, but it is understood the phones would have a local area code and number, such as 09 for Auckland and probably connect through a home wireless internet router. They would then revert to mobile phones once taken out of the defined area.

The plan is contingent on the Commerce Commission's forcing Telecom to offer fixed-line pricing and Vodafone has applied for a ruling.

At present Telecom home-phone users who call a Vodafone cellphone are charged 45c to 55c a minute. Vodafone said the service was dependent on it being classified as fixed-line, in which case the interconnection charges would be nil under terms of the Telecommunications Act.

Vodafone said in its application it had been unable to reach a commercial agreement with Telecom because the two companies differed in their definitions of local calls. Vodafone feels that because its phones will have local numbers, the service should be considered the same as a fixed line.

"Vodafone is of the view that local calls can be made by, or to, customers on a mobile network," the filing said.

Telecom argued that because the phones were essentially mobile, they did not qualify as fixed lines.

"When the customer is on the call and travelling down the motorway ... that hardly looks like a fixed-network service," said Bruce Parkes, Telecom's general manager of regulatory affairs.

"We have absolutely no disagreement with the type of service they want to offer ... [but] we would be looking to negotiate commercial terms that reflect the fact that they're not a fixed network."

Since November 2004, Vodafone has offered a service in Germany called At Home, which provides voice and internet capability. The service allows customers to designate a 2km radius around their address as their At Home Zone.

For $35, customers get 1000 minutes of talk time, which they can use to call landlines around Germany or other Vodafone mobiles as long as they are within their zone. If they leave the zone, normal mobile pricing applies.

Macquarie Equities analyst Steve Hodgson said Vodafone's planned service was similar to that offered by Woosh Wireless, in that it circumvented Telecom's network completely.

The commission said it would seek comments on Vodafone's bid before deciding whether to investigate it.