CommentsPosted: Monday 12/10/2009 08:19
Vodafone Netherlands has introduced a new service add-on that allows mobile VoIP services, called Internet Totaal Blox. The Internet Totaal Blox is an enhanced verison of the standard data add-on, Internet Blox for € 9.95 per month, which excludes use of VoIP services.
Mobile VoIP and in particular calling over a 3G data connection is a hot topic in the mobile industry. A cheap voice tariff plan and an internet plan for less than EUR 10 could offer a much cheaper way of calling for consumers. But for the operators, they lose the voice traffic, and the chance of customers calling outside their monthly plan becomes smaller. It becomes especially a problem if the consumer agrees with his closest contacts to only use mobile VoIP calls. Then the operators lose out on the termination access fees as well. These are just a few of the reasons why the operators are not rushing to allow mobile VoIP.
For Vodafone another issue is that it's cheapest internet plan offers much higher download and upload speeds than at rival operators. This was a small but fundamental mistake when mobile internet services started. In contrast, T-Mobile chose to differentiate its mobile data plans by the amount of MB included, rather than the speed. As a result of the difference, Vodafone's cheapest mobile internet plan is more suitable for mobile VoIP than data plans at KPN and T-Mobile.
With the differentiated pricing for Internet Totaal Blox, Vodafone's making a first attempt at rebalancing, allowing its revenues to shift from voice to data. Customers who provide minimal revenues - a voice plan at EUR 22.50 or lower - have to pay more for mobile internet than customers with a more expensive contract plan. A customer with a monthly voice plan at EUR 27.50 and the Internet Totaal Blox at €14.50 pays in total €42.00 per month. With the differentiated pricing, Vodafone (NYSE:VOD) ensures that every customer who wants to use mobile VoIP generates a minimum ARPU of €40 or more.
Currently around 13% of all Vodafone postpaid customers in the Netherlands have a mobile internet subscription, according to Telecompaper's Consumer Panel. So there's plenty of room still to grow, although for a large number of consumers €40 a month is still too much, especially given the current economic conditions. For early adopters though, there is now finally an option to use the over-the-top voice applications. Vodafone's chosen pricing means it no longer has to be so afraid of these applications becoming a huge success.
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