Vodafone withdraws Talk plan

Vodafone spokesman Paul Brislen says the plan was popular with customers. Photo / Sarah Ivey

Vodafone has pulled its controversial Talk plan after it caused the Commerce Commission to reconsider regulating mobile network operators.

Vodafone spokesman Paul Brislen said the offer had been popular with customers but because of the commission's view Vodafone had withdrawn it.

Weeks after the April launch of Talk - which offers customers 200 minutes on its network and to landlines for $12 a month - Communications and IT Minister Steven Joyce requested that the commission review the plan in light of its recommendation he accept commercial mobile termination rate offers from Vodafone and Telecom.

Termination rates are the wholesale fees mobile phone companies charge each other for taking calls or texts from other networks.

Vodafone claims reducing termination rates would cost the company up to a net $80 million a year for the next five years, with Telecom estimating the impact at $50 million.

The commission's view was that the new plan increased competitive headwinds faced by new players.

The review of the original decision came after new entrant 2degrees wrote to the minister complaining that the plan was extremely damaging.

2degrees operating officer Bill McCabe pointed out in a letter to the minister that Vodafone charged 89c, or 15 times the "on-net" rate, for calls to other networks.

He said it was telling that the on-net rate of 2.25c, once GST and 18 per cent cost of sales was deducted, was a quarter of the wholesale rates other networks would pay Vodafone from January next year if the company's commercial termination rate offer was accepted.

"Vodafone has designed this offer to make rival networks as unattractive as possible for its customers to call, and constitutes classic monopoly," wrote McCabe.

Vodafone yesterday launched a new product, Simply Prepay, offering calls to any mobile or landline for 49c a minute and 12c texts.