Freedom flees cut-price phone deal

By Karyn Scherer

A price that was too much of a bargain is forcing fledgling mobile phone reseller Freedom Communications to back out of a deal with The Warehouse discount chain.

Freedom signed up more than 30,000 customers for its pre-pay service in just two months over Christmas.

The Warehouse confirmed yesterday it had struck a new deal directly with Telecom, after Freedom was unable to maintain its cut-price rates.

The offer, which did not require customers to sign contracts or commit to monthly usage charges, increased mobile phone use from 17 per cent to 21 per cent in just six months.

Freedom's general manager, Mark Spiers, said yesterday the company had spent more than $3.5 million subsidising Nokia and Ericsson phones for customers, which it could no longer afford.

Warehouse spokesman John Journee confirmed Freedom had wanted to raise the price of its offer from $99 to $149. The Warehouse baulked at the change, and had managed to strike a new deal directly with Telecom, he said.

The new service will be known as Gold Mobile and will use Nokia phones sourced directly from Singapore.

The first company to have struck a deal with Telecom to resell its analogue cellular services, Freedom is believed to be keen to offer a GSM digital service, but Mr Spiers would not comment.

* Telstra's claim that Telecom's refusal to continue re-billing is anti-competitive and discriminatory will be heard in the High Court at Auckland on Friday. Re-billing allows customers to receive one bill containing charges for all services even though they may have a number of service providers.

* Meanwhile Cable and Wireless Optus has asked the Australian Competition and Consumer Commission to arbitrate a dispute with rival Telstra over local number portability. Optus said Telstra refused to re-route calls made to Optus local call customers to the Optus exchange closest to the customer. Instead, calls were being arbitrarily routed to any Optus exchange.