Govt asked to review mobile wholesale services

The Telecommunications Users Association has today questioned why none of the mobile operators offer pre-pay Mobile Virtual Network Operator (MVNO) services.

In the association's weekly e-newsletter TUANZ CEO Paul Brislen writes that it will be asking the government to include MVNOs in its upcoming review of the Telecommunications Act.

He points to the UK supermarket chain Tesco, which has created a successful mobile brand as a virtual operator, to become a major force in the UK telco scene. Indeed, according to telco vendors such as Amdocs, the MVNO model has been successful around the world.

"In Australia MVNOs account for 13 percent of the market, yet in New Zealand the total for all MVNO offerings is probably in single figures," writes Brislen.

"I think I can see why -- MVNOs in New Zealand are on account only, and New Zealand is predominantly a prepay market. Immediately, most of New Zealand's customers are unable to consider switching to an MVNO provider because there is no prepay option.

"Neither Telecom or Vodafone offer prepay MVNO services and I wonder why that is. Vodafone in particular has a large percentage of its customer base on prepay -- could it be that Big Red doesn't want to risk cannibalising its own customer base?

"Until MVNOs have access to prepay services and can build their own plans and tariffs, we're not going to see the kind of dynamic marketplace that the UK or Australia has and that's a loss for customers."

Computerworld asked Vodafone and Telecom today why they don't offer pre-pay MVNO services.


Vodafone spokesperson Sarah Newcombe says while the telco doesn't offer pre-pay services now, it is open to these deals.

"Offering a prepay service requires a huge investment in marketing and distribution as there isn't that existing customer base to cross-sell into. We would be very open to a conversation with any organisation about prepay MVNO services. The fact that there aren't any providers offering prepay via MVNO suggests that the investment is a big obstacle to overcome," she says.

"If you think about our MVNO partners (M2, Compass and Orcon), they all have existing relationships with customers through related services (such as fixed line calling and/or broadband). That means they can cross sell mobile services into their customer base with a relatively low cost and they can leverage their known telecommunications brands."


Telecom spokesperson Lucy Jackson says the telco is growing its MVNO capability. It's most significant MVNO partner is CallPlus which it won from Vodafone in 2011.

"We have a good handful of MVNO partners and are very active in the MVNO market. It is correct that we don't currently have a wholesale prepay product. However - while the details are commercially confidential - we are evolving the capability of our MVNO product over time and are growing our base."


In an interview last month Computerworld asked the late 2degrees CEO Eric Hertz if the mobile telco would consider an MVNO partnership, similar to what Tesco has created in the UK.

"Most MVNOs are added to existing product line and the numbers are pretty low. An MVNO still has to have distribution, a recognised brand, customer care, credit, it has to be out in all the markets across the country," he told us.

"Where do they invest their growth dollars -- do you invest in that kind of relationship with your customers for their mobile service? Or do you expand your store footprint.

"We've been approached and it's something we'd consider."

Copyright © 2013 IDG Communications, Inc.

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