KEY POINTS:
Telecom has stolen the thunder from Vodafone by signing on 57,000 more mobile customers in the last quarter after launching the country's first fixed-line and mobile package.
Vodafone results released yesterday show net customer additions were 11,000 for the quarter ended September 30.
But Telecom went a giant
step ahead, releasing its Freedom product that offers unlimited calls between a landline and a designated Telecom mobile and signed up 68,000 customers in the same period.
Vodafone has won only one of the last eight quarters over Telecom.
The company beat Telecom in net connections in the previous quarter, boosting its market share to 55 per cent when Telecom wrote off 200,000 customers. Its share of the mobile phone market dropped to 54.5 per cent this quarter.
Vodafone chief financial officer John Tombleson said it was a very quiet quarter but it was the eye of the storm for the company as it prepared for an aggressive attack on Telecom's revenue base.
"We were building the capability to launch a suite of new plans and we did not want to alert Telecom in advance. We are only going to get more aggressive as well. For the past couple of years we have been hamstrung building our systems and now we have lots of toys to play with."
Since the start of October, Vodafone has bought fixed-line operator ihug for $41 million and launched a plan in response to Telecom's Freedom plan, released 3G mobile broadband and a prepaid offer that provides unlimited calls, video calling and texting to one other Vodafone number for a fixed $6 a month.
Tombleson said Vodafone was confident that this would take substantial market share from Telecom.
"Most of the customers who are using a Telecom and a Vodafone handset will revert back to Vodafone with these plans launched," said Tombleson.
Vodafone's average revenue per user was $46.6, down 8.6 per cent from $51 at the same time last year.
The company now has 2.11 million customers. Its calling revenue was down from the previous quarter from $602 million to $597 million.
The majority of the drop in user revenue was because Vodafone reduced mobile termination rates - the fee it charges Telecom for calls made from Telecom landlines to Vodafone cellphones.
The Commerce Commission has recommended that the Government regulate the mobile phone market and the termination rate should be about 15c a minute, down from the current level of 20c.
"It certainly has wiped millions of dollars off our bottom line, this particular regulation," said Tombleson. "We are very keen to know what is going to happen."
Australian-based ABN Amro analyst Ian Martin said: "If Vodafone wants to add customers they are going to be diluting their average revenue base so I think they will move more towards a converged product, but it's a harder thing to do from a mobile-only base."