VODAFONE NEW ZEALAND LIMITED

Transcription

1 VODAFONE NEW ZEALAND LIMITED Submissin t: The Ministry f Ecnmic Develpment Submissin n: Trans-Tasman Mbile Raming Discussin Dcument 2 nd July 2010

2 Executive Summary Vdafne is prud f the internatinal mbile raming services that we prvide t ur custmers. Raming has lng been an area f differentiatin fr Vdafne in the dmestic market. With the launch f tw new mbile netwrks in New Zealand in the last 12 mnths and varius Mbile Virtual Netwrk Operatrs (MVNOs), raming is an area f significant retail cmpetitin in New Zealand. All mbile peratrs strive t ensure their prducts are easy t use and understand, and cst effective fr ur custmers cnnectivity needs. We invest significantly in building and maintaining a cmprehensive netwrk f verseas raming destinatins and facilities t ensure ur custmers can use their mbile phne when they are verseas in the same way that they d at hme. We have develped new pricing ffers that simplify what can be a cmplex prduct, and we have put in place a wide range f infrmatin tls that prvide custmers with the infrmatin they need t ram with cnfidence. Vdafne New Zealand custmers already get very cmpetitive rates fr their raming in Australia, particularly fr vice calling. We als ffer the mst cmpetitive data raming prices by a lng way. This is nt t say that there is n rm t imprve. Our data pricing is a particular area f cntentin, with custmers cncerned abut the csts they will face when they ram in Australia. Likewise, we are lking t enhance ur price ntificatin and transparency effrts, bth unilaterally and at an industry level thrugh the Telecmmunicatins Carriers Frum (TCF). The New Zealand mbile market has never been mre cmpetitive than it is tday. We have three mbile netwrk peratrs prviding nt nly retail raming services, but als whlesale raming services fr freign netwrks whse custmers visit New Zealand. This mre cmpetitive landscape is still relatively new, and the impacts f these changes in industry structure are cntinuing t play ut in the market. We therefre cautin against premature interventin in a market that appears t be trending n its wn twards exactly the utcmes that are being sught. We lk frward t wrking with the Agencies n these issues. 2

3 Intrductin Vdafne New Zealand (Vdafne) welcmes the pprtunity t cmment upn the Trans-Tasman mbile raming Discussin Dcument (the Discussin Dcument) prepared by the Ministry f Ecnmic Develpment f New Zealand and the Department f Bradband, Cmmunicatins and the Digital Ecnmy f Australia (the Agencies). In this dcument we utline ur pinins n the issues raised in the Discussin Dcument and address sme f the questins psed by the Agencies. We have als invited Cvec t prepare a reprt n the price benchmarking that the Agencies have perfrmed. That dcument, Trans-Tasman Mbile Raming: Benchmarking Review, is included with this submissin. Vdafne s raming prduct set Vdafne ffers tw retail raming vice prducts, which are available in all f the 215 raming destinatins available t ur custmers. These are Standard pricing and Traveller pricing: - Traveller pricing in Australia allws custmers t pay their standard dmestic vice rate fr all call types. 1 Traveller is an pt-in prduct that all retail custmers are eligible fr. Traveller usage accunts fr the majrity f ur vice raming traffic. - Standard pricing varies by call type and the Australian netwrk prvider that carries the calls. Standard pricing is better fr sme custmers in specific raming scenaris, such as Prepay custmers raming n the Vdafne Hutchisn Australia (VHA) netwrk wh predminantly make calls t Australian numbers rather than back t New Zealand, and On Accunt custmers n the VHA netwrk wh predminantly make vice calls during ff-peak hurs. In additin t vice raming, we als prvide ur retail custmers with SMS raming t the same 215 destinatins, including all Australian mbile netwrks; and data raming in 100 destinatins als including all Australian mbile netwrks. We als prvide inbund raming services t custmers f all Australian mbile peratrs n a whlesale basis and we als purchase whlesale raming services in Australia frm all three mbile peratrs, thugh as the Agencies nte we have a preferred purchasing arrangement with VHA. Demand fr trans-tasman raming services Our custmers require raming t Australia mre than they require raming t any ther destinatin. In 2009 Statistics New Zealand recrded 950,000 shrt-term departures frm New Zealand t Australia. 2 We estimate that up t tw thirds f these travellers utilise trans-tasman mbile raming services. In the same perid, Statistics New Zealand reprted that New Zealand received nearly 1.1 millin shrt-term visitrs frm Australia. 3 The raming usage f thse custmers was split between the three netwrks, with 1 Fr utbund calling. Custmers pay $1 per minute t receive calls while raming in Australia. There is als a difference in runding n utbund calls: dmestically fr On Accunt custmers we typically rund minute plus secnd, whereas all internatinal raming is runded minute plus minute ,277 recrded departures. Surced frm Statistics New Zealand Infshare - Shrt-term NZ traveller departures by cuntry f main destinatin and purpse (Annual-Dec) 3 1,082,680 recrded visitr arrivals. Surced frm Statistics New Zealand Infshare - Visitr arrivals by cuntry f residence and purpse (Annual-Dec) 3

4 bth 2Degrees and Telecm launching GSM-based netwrks that were cmpatible with incming Australian custmers devices in Structure f ur respnse In ur respnse t the Discussin Dcument, we: - Explain hw we see mbile raming services as part f the verall retail service bundle that custmers receive frm us and discuss the range f substitutes that exist t raming services t assist the Agencies in frming an apprpriate understanding f the relevant markets fr services. - Examine the degree f cmpetitin at bth the retail and whlesale level f internatinal mbile raming services in New Zealand, and demnstrate hw cmpetitin has never been higher at bth levels. - Prvide further infrmatin abut the structure and cmpetitiveness f ur current range f retail raming ffers, and the transparency initiatives we already have in place t help keep ur custmers infrmed. - Outline the initiatives that we intend t deliver that will imprve pricing, services and transparency f ur retail raming services ver the next year. 4

5 Raming is part f a retail mbile service bundle In the Discussin Dcument, the Agencies prpse the fllwing retail market definitin: Internatinal raming is assumed t cnstitute a separate retail market frm ther mbile services, althugh internatinal raming is currently bundled with dmestic services. 4 We believe that internatinal mbile raming services are mre lgically cnsidered in the cntext f a wider bundle f retail mbile services. Given the nature f a raming service, this certainly seems the mre sensible definitin - a custmer must have a dmestic mbile service relatinship befre that relatinship can be extended t ther freign netwrks. This market descriptin better illustrates the way cmpetitin wrks fr this prduct. - New Zealand and Australian peratrs sell raming services as part f a wider bundle f retail services. We d nt see peratrs wh ffer nly internatinal raming services t New Zealand custmers anymre than we see peratrs wh ffer SMS services withut selling vice and data services in the bundle. - A wider definitin als better reflects the way that custmers purchase these services. We d nt see custmers buying SMS separately frm vice any mre than we see custmers buying raming services separately frm dmestic services. The Agencies seem t be arguing that raming in, say, Australia is n substitute fr raming in sme ther destinatin, say Fiji. This is plainly true, but it nly cvers the demand side f the market. On the supply side, peratrs supply raming t all the internatinal destinatins they can in ne retail bundle, and that is hw custmers buy them. S it better highlights the interplay f the cmpetitive frces at wrk t see internatinal raming in different destinatins as part f the same bundle f services, and as part f a brader retail mbile services market that includes dmestic mbile services. The Agencies prpsed market definitin is unusual in an internatinal cntext. T ur knwledge, n ther jurisdictin has defined mbile raming services separately frm general mbile services. Fr example, the Eurpean Cmmissin has explicitly cncluded that the mst apprpriate market definitin is fr a cluster f services: Custmers use mbile phnes fr different purpses, such as making a vice call r sending an SMS. Rather than using different prviders f these services, custmers appreciate the ease and cnvenience f having nly ne handset and SIM card. Thus, cnsumers purchase a bundle r cluster f services frm ne mbile peratr which usually includes lcal natinal and internatinal (and ramed) calls and SMS. In this manner mbile firms benefit frm ecnmies f scpe and cnsumers benefit frm a reductin in transactin csts. Thus, the relevant market shuld include a cluster f prducts, where nn-substitutable services are included in the same market. 5 Frm a demand perspective, the retail prvisin f internatinal raming services culd be examined t see if it is a separate market. Hwever, it is a standard part f the bundle f services ffered by mbile peratrs. Mrever, raming is likely t be even mre marked by transactinal 4 Para c_2007_1483_2.pdf page 40 5

6 cmplementarities than ther services ffered by mbile peratrs (where a cnsumer might like t sign cntracts with different peratrs fr different cuntries and fr different times f the day etc.). Thus, retail raming is part f the cluster f services purchased. 6 We als questin whether the Agencies definitin f the whlesale inbund raming market has been fully thught thrugh. We agree that Australia and New Zealand have separate natinal mbile markets. But we dn t see peratrs prviding just retail mbile services withut prviding inbund raming, and nr d peratrs prvide just inbund raming withut als prviding retail services. The netwrk assets required fr these tw services are the same. In ur view that at least raises the questin f whether they might be in the same market. Substitutes fr Mbile Raming are readily available The Agencies ask respndents t cmment upn the availability f substitutes fr internatinal mbile raming. The Agencies cnsider a recent reprt by the Organisatin fr Ecnmic Cperatin and Develpment (OECD) where alternatives t internatinal mbile raming are evaluated, which infrms the Agencies cnclusin that internatinal mbile raming services are nt readily substituted. T the cntrary, Vdafne believes that there is actually a wide range f readily available prducts and services that can and d substitute fr internatinal mbile raming services. These alternatives therefre act as a cmpetitive factr against ur prducts. We als nte that many f these alternatives have nt been fully cnsidered in the OECD reprt that the Agencies have referenced. We believe that these substitutes need t be cnsidered as being in the same market fr prviding telephny services whilst verseas; r, at the very least, as exerting cmpetitive influence ver peratrs internatinal raming prducts. Substitutes fr Vice Raming Custmers wh wish t make and receive vice calls whilst in Australia have a wide range f ptins available t them that may substitute fr using their standard mbile raming vice services. - Dmestic fixed lines fixed lines, calling cards and phne bths are all cmmn in Australia. Custmers may use these t call back t New Zealand r t be called n in the case f fixed lines. - Purchasing a dmestic SIM card as n New Zealand mbile peratr puts in place any lcks t swapping ut SIM cards, custmers may substitute their New Zealand mbile raming pricing fr Australian dmestic pricing at any time, particularly if they pt fr PrePaid pricing ptins. - VIP custmers may als utilise bradband cnnectins in Australia t access VIP services such as Skype. Many f these VIP slutins als allw inbund calling via the same identifiers as thse used when in New Zealand. Given that VIP services are essentially netwrk agnstic, they are nt subject t the challenges usually present with traditinal telecmmunicatins raming services. They als suffer frm the limitatin that VIP slutins may nly be used when a data cnnectin is available hwever, this is inherent t the slutin regardless f whether the custmer is raming r using it dmestically. 6 Ibid p

7 The Agencies statement that peratrs in New Zealand d nt currently allw end users t use VIP applicatins is incrrect. We are surprised that the Agencies relied upn a media reprt that is nearly a year ld in terms f making this statement, when accurate and up t date infrmatin n the use f VIP is available n ur website. 7 T clarify, we state in ur terms and cnditins and with reference t ur mbile data plans that Vdafne des nt supprt Vice ver Internet Prtcl (VIP), and can prvide n assurance that currently available access levels may be maintained. This means that at this pint in time, we have nt designed ur netwrk t accmmdate particular levels f VIP traffic, we d nt prvide supprt fr custmers wh are having truble with VOIP calling sftware, and we make n guarantee f sufficient quality f service t supprt VIP traffic. Our custmers are, hwever, free t use VIP ver ur services with these caveats in mind. Like the OECD, we recgnise that the inherent disadvantage f sme f these ptins is that they d nt allw custmers t be cntacted via the same numbers, as if they were at hme. While this des therefre render all f these as imperfect substitutes, it des nt cmpletely rule them ut frm cnsideratin. We als recgnise that there are limitatins in substituting the SMS functin f a raming mbile phne, as nly purchasing a dmestic SIM card can prvide SMS, and that is via a different number t that which is used dmestically, althugh ntifying peple f a new mbile number is bth easy and cmmn. Substitutes fr Data Raming A wide range f alternatives als exist t mbile data raming services bth n handsets and via mbile cnnect cards - which effectively cmpete against mbile data raming slutins prvided by Vdafne: - WiFi Htspts r internet cafes custmers may utilise the WiFi antenna that is built int nearly every ntebk cmputer and the majrity f newer smart mbile phnes t cnnect t WiFi netwrks at htspts, such as thse cmmnly available in cafés (such as Starbucks 8 and many McDnalds restaurants 9 ), airprt r htel lunges and public libraries. This allws custmers t use data at dmestic WiFi prices in Australia. Custmers may als cnnect via renting time in internet enabled terminals in internet cafes. - Dmestic fixed line cnnectins custmers may als plug their ntebk cmputers int wired access pints that may be available t them, and therefre use data at dmestic rates. - Purchasing a lcal SIM card custmers may als substitute their New Zealand SIM card fr an Australian ne, and therefre take advantage f dmestic mbile data pricing via bth data cards and mbile phnes. Unlike vice services, all f these alternatives prvide slutins that are near perfect substitutes fr mbile data raming services. They replicate the custmer experience and prduct functin in every substantial regard. One difference is cverage: nly using a lcal SIM card prvides the same ubiquitus cnnectivity that a custmer is used t in their dmestic situatin. 7 See 4. (f) f ur Prepay Terms and Cnditins: and 3. (e) f ur On Accunt Terms and Cnditins:

8 Substitutes are having a real impact n the market Substitutin appears t be cmmn accrding t the survey data cllected by INTUG and APECTel 10 n the telephny usage habits f regular travellers 11 : Alternatives used fr vice Survey 4 Mst cmmn frm f internet access Survey 8 Cmpetitin has never been greater in the retail market Netwrk-based cmpetitin is driving retail cmpetitin The New Zealand dmestic mbile market has fundamentally changed in the last 12 mnths with the entry f 2Degrees int the market and the launch f Telecm s XT mbile netwrk. All f the three majr mbile netwrk peratrs are nw perating n GSM-based netwrks, the mst cmmn technlgy 10 As presented by Ernie Newman, CEO f the Telecmmunicatins Users Assciatin f New Zealand in The Increasing Issues Arund Mbile Raming, Presentatin t the Asia-Pacific Telephny Wrkshp n Internatinal Mbile Raming, Brisbane Australia, 8 th June Thse wh respnded travelled internatinally, n average, abut six times each year abut fur f these trips fr business and tw fr hlidays. Mre than 98% tk their mbile fr vice calls every time they travelled, and 93% accessed data while travelling; abut half n them n cellular-based services and half n fixed lines r WiFi. 8

9 chice fr mbile netwrks internatinally. This means that the retail custmers f all three netwrks are able t ram n the majrity f netwrks internatinally and n every mbile netwrk available in Australia. 12 Many Mbile Virtual Netwrk Operatrs (MVNOs) are als cmpetitrs in the New Zealand retail mbile market. 13 Retail innvatin and cmpetitin is abut mre than just price Cmpetitin takes many different frms, f which price-based cmpetitin is nly ne. Cmpetitin in the retail raming market als manifests itself in the fllwing frms: - Service based cmpetitin raming can be a cmplicated prduct. There are hundreds f destinatins, many with multiple raming netwrks available. Each netwrk peratr usually has a different pricing cnstruct at a whlesale level, which ften leads t different retail prices as well. Each individual service available t ramers is at a different price pint, and may include different charges fr calling different destinatins and fr things such as n and ff peak usage. Freign exchange rates als cmplicate the pricing f these prducts, leading t fluctuatins in retail rates ver time. This cmplexity is the reasn why we intrduced ur pt-in Vdafne Traveller pricing structure. Traveller simplifies raming pricing by dividing the wrld int Znes. Pricing in all cuntries and n all netwrks is the same inside that Zne, prviding custmers with a raming prduct ptin that is greatly simplified and mre certainty ver the charging that will be applied t their usage. Telecm has als launched a Zne based pricing structure fr raming. - Cverage based cmpetitin New Zealand mbile netwrks als cmpete n the number f raming destinatins and netwrks that they prvide raming cverage t. The current state f this cmpetitin is: Vdafne New Zealand prvides vice and SMS raming services in 215 destinatins; and data raming in 100. Prepay custmers may autmatically ram in 30 destinatins, and in all destinatins with pre-departure setup. Telecm New Zealand prvides vice and SMS raming services in 210 destinatins, and data raming services in Degrees prvides vice and SMS raming services in 52 destinatins. - Feature based cmpetitin custmers value the ability t be able t use services such as vic seamlessly and t be able t call custmer service via the same cntact numbers as they wuld use at hme. These are features that we make available t ur custmers when they ram in Australia n the VHA netwrk. Operatrs cmpete and differentiate their services by develping slutins t these challenges, and allwing custmers the ability t use their devices as they wuld at hme. 12 Subject t the apprpriate agreements 13 Black & White; M2; Cmpass Cmmunicatins; CallPlus; Slingsht; TelstraClear; Digital Island. Orcn is als expected t launch mbile services in the near future via an MVNO relatinship with Vdafne; and TelcInABx and Cgent Zintel (see raising the ttal number f MVNOs in New Zealand t ten. 9

10 - Quality f service based cmpetitin service quality als impacts n custmer demand fr raming services. Vice quality, call cmpletin, SMS delivery accuracy and timeliness and maintaining data cnnectins are all aspects f netwrk quality that prviders cmpete with. New Zealand custmers receive very cmpetitive raming prices, fr vice in particular The Agencies cnclude that retail prices are high. This cnclusin is based predminantly upn retail price benchmarking that cmpares the raming prices New Zealand retail custmers pay t ram in Australia, cmpared t theretical benchmarks and ramers frm ther destinatins. The Agencies cnclusin that the raming prices ffered t custmers seem relatively high des nt match the evidence that the Agencies have presented. New Zealand custmers in Australia receive better pricing fr all services than ramers frm ther cuntries. Vice call and vic pricing, in particular, cmpare very favurably against these ther cuntry cmparisns, with the Agencies analysis that the average cst f vice calling fr a New Zealander in Australia is less than half f that fr a Singaprean, the nearest cmparisn. Pricing fr SMS and data is als better than all cmparatr cuntries. A mre apprpriate cnclusin that is supprted by the data the Agencies have prvided is that New Zealand mbile custmers raming in Australia receive better pricing than thse custmers frm ALL ther cuntries cnsidered. Data raming prices are imprving We recgnise that data raming prices are higher than thse paid by custmers when they are at hme. Hwever, the price f data raming has already changed dramatically ver recent years in particular fr data raming in Australia. Our standard data raming pricing has already been cut frm $30 per megabyte n Telstra and Optus netwrks t match the pricing fr data raming n the VHA netwrk at $10 per megabyte; and n a prmtinal basis frm $10 per megabyte t $2 per megabyte n all Australian netwrks until August The Agencies average retail pricing methd and benchmark cmparisns require further analysis Vdafne is als cncerned abut the basis upn which the Agencies have cmpared these prices. We d nt believe that the methdlgy that the Agencies have used t benchmark the prices that New Zealand custmers pay fr raming in Australia is crrect

11 Cvec have lked at this issue, and their cnclusins are set ut in the reprt we have included alng with this submissin. We wuld cautin the Agencies n drawing definitive cnclusins yet regarding the cmparative value f New Zealand retail raming prices. Cmpetitin has never been greater in the whlesale market Telecm and 2Degrees having GSM-based netwrks has fundamentally changed the market Netwrk based cmpetitin is als driving cmpetitin in the underlying whlesale market fr internatinal mbile raming and this market has als never been mre cmpetitive. With three GSM based peratrs available in New Zealand, Australian peratrs and their retail custmers nw have three different chices fr their inbund raming activity. These market cnditins are als relatively recent Telecm launched their XT Netwrk in May 2009, and 2Degrees nly entered the market in August Whlesale IOT access agreements are usually negtiated upn fixed terms. This means that changes within that market will take time t flw thrugh int pricing, as different agreements expire and cme up fr re-negtiatin and re-tender. Just like the retail side f internatinal raming, cmpetitin at the whlesale level als takes multiple frms in additin t pricing: - Cverage based cmpetitin just like dmestic custmers, inbund raming custmers wish t receive services frm the raming prvider that are as ubiquitus as pssible. Operatrs therefre seek ut agreements with netwrk peratrs that have cmpatible netwrks and can prvide as fulsme a degree f cverage in the visited cuntry as pssible. - Feature based cmpetitin in rder t encurage custmers t use their phnes whilst raming, peratrs seek features such as netwrk quality, netwrk speed, vic cmpatibility, ruting f custmer service calls and ther features t supprt custmer behaviurs. The Agencies nte that peratrs als cmpete fr inbund raming traffic n the basis f prices, encuraging freign peratrs t have their inbund raming custmers autmatically pt t a particular netwrk in return fr preferential prices. Cnsumers benefit frm these arrangements, as the lwer rates that these peratrs are able t secure frm these preferential arrangements may then be passed nt cnsumers, lwering the retail cst f raming. Retail peratrs may als be able t redirect their custmer base t default t whichever freign peratr is currently prviding the best pricing fr raming, therefre allwing cmpetitrs t readily respnd t incentives ffered by cmpeting prviders f inbund raming services. 15 These measures d nt mean that the inbund retail custmers themselves are bund nly t using their peratr s preferred netwrk partner. Custmers may chse whichever netwrk they prefer, based n the availability f that netwrk accrding t their cnnectivity needs; the features that they require; the prices that they will be required t pay and whether their hme netwrk has negtiated access t multiple raming partners. The Agencies have already nted that in the case f Vdafne we prvide ur custmers with the chice f all three Australian netwrks. 15 Nte that this is nt necessary when a custmer is raming in Australia n ur Traveller pricing, as this standardises csts acrss all netwrk prviders. Nte als that substitutability can be slightly cmplicated by the frequency allcatin f the whlesale prvider s netwrk cmpared t the retail prvider s custmer handsets. 11

12 Transparency The Agencies als cnclude that pricing f trans-tasman raming des nt appear t be sufficiently transparent and that cnsumer awareness f pricing is lw. The Agencies are cncerned that this dampens cmpetitive pressure in the market, as it reduces custmers ability t chse better prducts at lwer prices. Vdafne is equally interested in ensuring that ur prices and terms f service fr internatinal raming are as transparent as pssible. Cnfusin arund raming pricing leads t a number f negative cnsequences fr ur business, all f which we have every incentive t avid. These cnsequences include: - custmer dissatisfactin; - additinal call vlumes int ur call centres t understand billing r challenge charges; - difficulties in cllecting utstanding debts; - write dwns f custmer bills; - avidance f ur raming services; and - negative media articles and damage t ur brand. We have already implemented a number f different initiatives fr increasing the transparency f ur prices. These include: - Welcme SMS - All Vdafne custmers receive welcme SMS nce they arrive in Australia, regardless f whatever Australian netwrk they first ram nt upn arrival. A key challenge in cmmunicating infrmatin t custmers via SMS is the limitatins f the medium - nly 160 characters are available per message, and research has shwn that custmers have an aversin t receiving t many f these messages frm their peratr. We therefre carefully ratin these messages t prvide custmers with infrmatin that is particularly relevant t their situatin, and t encurage them t check ur website fr full details. We currently send the fllwing messages t ur custmer upn their arrival in Australia: Initial message when arriving n the VHA netwrk: Vdafne welcmes yu t Oz! Fr queries call us n 777. Fr vic call 707. Internatinal charges apply fr bth. Initial message when arriving n the Telstra r Optus netwrks: Vdafne welcmes yu t Oz! 4 queries call us n vic call & enter yur mbile n & PIN. Internatinal charges apply. Data pricing message sent upn arrival n all Australian netwrks: 12

13 Data raming charges r nw just NZ$2/MB until 31Aug10 s u can wrk r play nline. This is avail n ALL aussie netwrks &all devices. See vdafne.c.nz 4 inf. Vice pricing message sent upn arrival n all Australian netwrks: T pay yur standard NZ hme rate fr calls made whilst in OZ get Traveller ur zne based pricing fr calling when verseas. Fr inf g t vdafne.c.nz/travel. - Cmprehensive infrmatin n the Vdafne website the Vdafne website includes infrmatin n the prices custmers will pay fr internatinal mbile raming, and the features that are available t them. We use the Vdafne website as the ne place that custmers may access this detailed infrmatin because the internet is the ideal lcatin fr such detail: The website allws us t update pricing, terms and features at all times as ppsed t printed materials, which may be ut f date at the time the custmer cnsults them. The website is able t present the large amunt f infrmatin related t internatinal raming in a manner that is mre easily manageable, understd and searchable by custmers than ther mediums. The website is accessible frm every lcatin wrldwide, and therefre is able t be accessed by custmers whilst they are raming. The website is capable f prviding detailed setup and usage infrmatin t assist a custmer with using their raming services effectively and efficiently. Fr example, the resurces we prvide n hw t better cntrl data raming csts when raming with a ntebk cmputer Intrductin f ffers such as Vdafne Traveller whilst Vdafne Traveller is nt a transparency initiative per se, we have develped this ffer in respnse t custmer feedback regarding the cmplexity f raming infrmatin and the challenges that custmers face in remaining infrmed abut the charges they will pay while raming. We als seek t standardise ur pricing acrss all netwrks in a given destinatin, rather than having different price pints by peratr, t further remve cnfusin. The market is already delivering further imprvements Given the current cmpetitive landscape in New Zealand mbile telecmmunicatins, we expect that the raming market will cntinue t see innvatin in prices, service quality and transparency ver the next 12 mnths. Given these market cnditins, Vdafne has a range f price and transparency initiatives in different stages f develpment, which we believe will address a number f the cncerns raised in the discussin dcument. 13

14 We are als wrking within the TCF t develp an industry wide apprach t imprving the level f transparency arund raming pricing. This particular initiative cmmenced fllwing the suggestin f Ernie Newman frm the Telecmmunicatins Users Assciatin f New Zealand (TUANZ), wh suggested t the TCF in March 2010 that the TCF shuld als lk int hw t imprve transparency in the light f the OECD reprt int Internatinal Mbile Raming. The TCF Wrking Party has already been frmed with the bjective f develping a set f best practice guidelines fr custmer transparency. All New Zealand mbile peratrs, including the Mbile Virtual Netwrk Operatrs, have been invited t participate in this wrking party; as have representatives frm the Cmmerce Cmmissin, the Ministry f Ecnmic Develpment and TUANZ. Vdafne is very keen t have as many perspectives n custmer transparency as pssible, as this is a challenging area and we wuld appreciate the advice and guidance f these cnsumer fcussed rganisatins. The Wrking Party expects t have finished this wrk by the end f 2010, whereby these Guidelines may be entrenched as a Cde f Practice in accrdance with the TCF Rules. The TCF is als cllabrating with the Australian Mbile Telecmmunicatin Assciatin (AMTA) and the Cmmunicatins Alliance f Australia in this regard, as these rganisatins are als cntemplating a similar initiative. Mre details n this initiative are available in the separate respnse t this Discussin Dcument frm the TCF, AMTA and Cmmunicatins Alliance. While we will always endeavur t prvide ur custmers with detailed and accurate infrmatin abut ur raming services and their csts, the INTUG survey suggests there is an issue with custmers taking advantage f the infrmatin already available: D custmers check raming prices befre travelling Survey 5 17 This will certainly be an issue fr discussin in the industry effrts n imprving transparency. 17 As presented by Ernie Newman, INTUG in The Increasing Issues Arund Mbile Raming, Presentatin t the Asia-Pacific Telephny Wrkshp n Internatinal Mbile Raming, Brisbane Australia, 8 th June

15 Cnclusin It is wrth restating the key pints f ur submissin: - We ffer very gd raming services t ur custmers when in Australia. Our retail pricing, particularly fr vice services, cmpares well against the prices ramers frm ther cuntries pay while in Australia and against ur cmpetitrs. Whlesale prices cntinue t fall, reflecting a mre cmpetitive mbile market. - We are wrking t imprve ur raming services in Australia, particularly fr mbile data raming, and als t ensure that we present infrmatin abut ur raming services in a manner that is as transparent as pssible. We have initiatives already underway t deliver t these challenges. The TCF initiative t develp standards fr cnsumer infrmatin prvides an pprtunity fr the industry, cnsumers and the Agencies t wrk tgether t find slutins that are achievable and mutually beneficial - The New Zealand telecmmunicatins market has never been mre cmpetitive. It has been less than 12 mnths since tw new GSM-based netwrks entered the New Zealand market, which has inevitably increased the cmpetitive pressures in raming and acrss the entire mbile telecmmunicatins market. The Agencies risk uncertain utcmes in talking prematurely f regulating markets that are already trending tward delivering exactly the utcmes that are being sught. We als questin what the benefit is fr New Zealand cnsumers frm the cmbined trans-tasman apprach that the Agencies have undertaken. New Zealanders in Australia already receive very cmpetitive vice pricing, and SMS and data pricing that is better than thse ffered t ramers frm any ther cuntry cmpared. Why then wuld the New Zealand regulatrs pursue utcmes that culd benefit Australian custmers, when there is little benefit fr New Zealand cnsumers frm such actins? There is the distinct risk that such interventins culd well starve the New Zealand telecmmunicatins industry f valuable revenues when we are already in a challenging macr envirnment, with falling revenues verall and grwing demands fr investment. The beneficiaries wuld be Australian mbile peratrs wh already benefit frm their ecnmies f scale and larger custmer bases. We certainly d nt wish the gvernment f Australia t intervene n ur behalf in cmmercial negtiatins with Australian mbile peratrs. Vdafne thanks the Agencies fr the pprtunity t submit in respnse t this Discussin Dcument, and lks frward t further engagement n this tpic. 15