KEY POINTS:
Vodafone has launched its most aggressive mobile consumer calling and texting package yet with the new $20 'Family' deal.
It comes as mobile operators in the US enter a price war signalling that true flat-rate mobile deals have hit the market.
The arrival of Vodafone Family follows its launch in Britain in 2006 and the debut of unlimited single network calling deals here that Vodafone claims have lowered prices for consumers but also raised the operator's average revenue per user.
The Family deal allows four Vodafone subscribers, only one of whom has to be a monthly account holder, to exist in a closed calling group. A $20 fee is charged to one user for unlimited calling, text messaging and video calling between the four members.
The deal has been welcomed by the Telecommunications Users Association (TUANZ), which sees close calling group deals as helping avoid mobile phone "bill shock".
"The high-volume users, which tend to be business people, have had very good cause to be unhappy for a long time about the lack of economies of scale that have been reflected in pricing plans. Vodafone to their credit have addressed that in the last few months," said TUANZ chief Ernie Newman.
Vodafone's general manager of products, Kursten Shalfoon, said the Family deal came with a "loosely defined" fair-use policy.
"If I had my way I'd call it a network abuse policy. We're not trying to stop people making two-hour calls, we're trying to use it as a baby monitor or leaving it on for 12 hours, which we have seen," he said.
He declined to reveal take-up figures for Vodafone's Best Mate deals, which allow unlimited calling between smaller groups of Vodafone customers, but said forecasts for Best Mate had been exceeded.
"Best Mate was hugely successful in the prepay area. It took a bit of time to get it to our on-account customers due to the change in our billing system. What we've seen is our minutes of use have significantly risen while the corresponding rate per minute has dropped. But overall ARPU [average revenue per user] has gone up for us." Vodafone credits deals such as Best Mate for elevating the company's pricing across low, medium and high-use customers into the top half of the OECD pricing index in the last quarter of 2007.
But the ultimate flat-rate calling package allowing unlimited calls to any mobile network nationally, and to any fixed line seems some time away.
"It will get there eventually but there's enough value in it for the customers to just speak to the Vodafone community," said Shalfoon.
Last week, US mobile operator Verizon launched a US$100 a month unlimited national calling plan, which within hours was matched by T-Mobile and AT&T. The fourth major US operator, Sprint, which has been losing customers to its competitors, hasis yet to respond to the deals.
Research from US communications consultancy FTI suggests that initially just 5 to 15 per cent of the combined customer base of the three US mobile operators will save money by converting to the all-you-can-eat plans.
Newman said such deals were only likely here when a third player entered the market. "All the evidence points to you really only getting good price competition when you have three or more operators."
Telecom declined to say whether it would match the Vodafone Family deal. It has its own calling group deals but nothing in the market aimed at consumers as competitive as Vodafone Family, something industry insiders say is in part down to limitations in Telecom's billing system.
"We've also seen a strong demand for calling circles in the business space, and have a number of plans based around calling circles. However ours tend to give the option of including fixed or mobile numbers, rather than being limited to mobile," a Telecom spokesperson said.
Shalfoon said flat-rate deals would increasingly include fixed-line calls through ihug, Vodafone's internet provider, which is about to be rebranded as Vodafone. He defended the single network nature of the Family deal.
"The more people you know on Vodafone, the better value it becomes to you."
KEEPING IT IN THE FAMILY
* Four Vodafone customers on You Choose accounts or Supa Prepay plans can form a calling group where one participant pays $20 for all four members to make unlimited mobile calls, text messages and video calls between each other.
* Calls between people in the family group do not use up the minutes or text message allowances they have.
* Calls and texts to other Vodafone and Telecom mobiles and landlines and to phones outside of the country attract regular charges.
* There are no limits on calls or the number of text messages sent but Vodafone operates a fair-use policy.
