Challenge for Telecom

By Peter Griffin

The debut of the Vodafone at home service this week is significant for two reasons - it bulldozes the outdated notion of separate, distinct toll-calling zones and is the first home phone line alternative being offered on a national basis that doesn't depend on Telecom's network.

Smaller firms like Woosh Wireless, Xnet and Slingshot are doing both in a niche capacity using internet-based telephony services - but they're far from ready for mainstream users, who just want to pick up their home phone and hear a dial tone.

At home's success ultimately depends on how seamlessly it can do just that with the $99 home line replacement box it will use to deliver the service. Vodafone has the network reach - the at home service is based on its 2G mobile network, which covers 97 per cent of the population.

But as anyone who uses a mobile phone regularly knows, it's not as reliable as your regular home phone line.

However, Vodafone has made a success of similar services abroad - most noticeably in Germany, where under the moniker "ZuHause", the mobile operator has signed up over a million subscribers.

So at home represents a bold move to raid Telecom's $1 billion treasure chest in annual access and calling revenue.

Only a move on this scale will satisfy Vodafone boss Russell Stanners' stated desire to claim 50 per cent of the telecoms market and no other player is in a position to make such a competitive play.

However you'll still need to keep that fixed-line if you want DSL broadband. Vodafone has cut prices to try to lure people across to its mobile broadband service, but that won't cut it for moderate and high broadband users.

At the moment fixed-line broadband still requires that monthly access component be paid, so until so-called "naked DSL" delivers broadband-only access, the savings of waving farewell to Telecom won't be truly realised.

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