Vodafone, are you completely brain-dead?

Vodafone Logo

I’ve previously called Vodafone “brain-dead” because they don’t redirect the misspelt version of their web address and couldn’t respond intelligently when I told them about it. But now… [sigh]

A fortnight ago there was confusion over Vodafone’s plans for the iPhone. Were data charges included in the cap or not? Vodafone’s “explanation” seemed to contradict their published terms a conditions.

Even though all their previous plans allowed data to be included within the cap, billed at $1 per 5 minutes of connection, Vodafone reckons that for the iPhone it’s billed separately. Can anyone give a rational explanation for why the data should be more expensive if the device happens to be an iPhone?

Other than price-gouging, that is.

After all, if your mobile device is a laptop they’ll sell you 5GB/month for $39! Given that Telstra and Optus had already announced their pricing, Vodafone could have scooped them both with a better package, rather than looking like a greedy also-ran.

So with this background, I was… erm… thrilled to receive my phone bill this month.

Here’s a picture.

Vodafone bill showing $476.91 owed

Yes, instead of the usual $79, a busy month saw me go over cap. I’m up for $476.91.

I reckon Vodafone should have given me a warning.

I do realise that I signed up for the deal and I’m supposed to know what I’m spending. I do realise that telcos make Big Fat Profits from mistakes like mine. It’s in their short-term interest not to warn me. But I reckon it’s customer service FAIL. Particularly as I’m not on a contract and I can switch carriers tomorrow.

Vodafone could have made this a customer service win. Noting that my data usage was climbing, noting that I’m a business customer who’s not on contract, they could have called. “Hi, you’re going over cap. Would you like to upgrade now? It’ll save you money, and if you sign a contract we’ll throw in a new phone.”

As it stands, though, I’m unhappy. I used what felt like “a bit more than usual” but have a bill six times more.

I’ll be calling Vodafone tomorrow. Let’s see if they can make me happy again.

16 Replies to “Vodafone, are you completely brain-dead?”

  1. You wonder just how many parents are about to get bills like this as well from young Timmy or Tammy’s new iPhone.

    You know the one they took to school and hey see all the cool music videos i can watch in my lunch time. And the I am cool, I can download this whole album from iTunes whilst I am at it.

    I think the real question will be who is first, TT or ACA with the telco bashing story, I know it is coming.

  2. If you’re a heavy data user Optus is probably a better deal for you

    If you’re a lighter data user I’m on Virgin Mobile using the 50 Mb data pack for $5/month, alternatives are $10/300mb or $15 for 1GB

    PS Virgin mobile gives you a reasonably accurate estimate of how much data you’ve used so far each month in the accounts section of their website

  3. Vodafone can only do what it can do I suppose, without me getting in detail about it. Let’s just say that they ‘rent’ wholesale from the big T.

  4. Oooh, I can’t wait to hear what happens and how they respond!

    I’m also a Vodafone slave (customer), so this will decide my future dealings with the company.

  5. Price gouging? You mean Vodafone is trying to maximise their profits? You know, you’re right — that is wrong. Thank God Prussia.Net doesn’t do that.

    You have nowhere to go really, so the “only good in the short term” argument doesn’t really stick. Oh well, if you think they’re doing it wrong, go into business and compete with them*. If your judgment is correct, you stand to make a lot of money.

    *FAUC is a joke. It demonises one of the hardest and most noble things a man can do: make a fair profit.

  6. @Wolf and @Ken Burgin: Both “current affairs” programs will already have the iPhone shock-horror data charge story on their whiteboards — particularly as the ACCC has already issued the warning.

    @Anastasia: I agree that the pricing of anything Internet in Australia mostly comes back to Telstra, and that in turn reflects some fairly fucked-up deals done years ago. For those who don’t know, look up “Reach” or “Pacific Century Cyberworks” for some history.

    Still, the same Vodafone can buy wholesale bandwidth from the same Telstra to profitably sell 5GB/month of HSDPA data for $39 retail. I reckon they could have offered that as an add-on data plan for iPhone and made a killing.

    @Alex: Not your best work. You’ve missed the nuances of what I’m saying and have responded with a slogan.*

    I’m happy for Vodafone to make a profit. That’s what attracts the investors to pay for the network in the first place. In summary, apart from the iPhone pricing issue, my points are:

    1. It’s a better strategy to make a customer feel happy rather than stupid or angry — and right now I feel stupid and angry.
    2. Vodafone missed the first, obvious opportunity to make me feel happy (or at least prevent the stupid-angry thing).
    3. The barrier for me to move to another carrier is very low: fill in a form and wait for a new SIM to arrive.
    4. Vodafone’s choice is between insisting that I pay $400 extra now and getting nothing more after that, or adding maybe $40/month to my spend for the next two years for a total of nearly $1000. Their business decision should be obvious. We’ll soon see.

    *Your criticism of FAUC is a joke. It demonises one of the hardest and most noble things a man can do: join with his fellow man to create something of lasting value for the common wealth.

  7. It’s not that simple with the wholesale aspect where contracts/deals are involved between Telstra and service providers — if the primary provider (that on-bills Vodafone) can only provide certain products/bandwidths they want to provide. Telstra clearly indicated that it had control when it decided (finally) to activate a faster broadband network recently. Then there’s not enough competition because Telstra is the main provider of wholesale services/products, it’s like a monopoly and when that changes then the price issue will change. In Canada, the monthly charge for iPhones was reduced to less than fifty dollars a month (from more than a hundred), after customer pressure, but I think that telcos in North America (and Canada) are deregulated. In Australia it’s the opposite.

    Here in Australia, there are many service providers that want to start making their own way but they can’t afford it. Telecommunications can be nightmarish, especially when connections are flawed, and have to be corrected for mobile networks. I’ve had to deal with many enquiries from service providers who’ve had to dispute accounts/bills (in the hundreds of thousands of dollars) due to incorrect provisioning, so in one way, I’m not surprised by the current situation with the iPhone. I’ve worked in the industry for close to four years, and it’s a terrible industry in terms of gaining any competent knowledge because each manager has a narrow mentality. Each department likes to think it is specialized (typical bureaucratic corporation and processes with more paperwork than anything else), and although customers are supposed to matter, they’re always given the runaround.

  8. By the way, I completely sympathize with the Vodafone issue. I doubt that I’ll get the iPhone any time soon, based on the plans. I haven’t had a plan for years due to shambolic behind-the-scenes issues that unfold with billing. It’s a pity because the iPhone is a great new technology, that would be ideal for business people, but it seems that corporations (telcos) can’t really get their act together.

  9. @Alex I suspect that there is something in your slogan that you are overlooking.

    That is the use of the word fair.

    Nothing that I see in the Vodafone pricing structure (that differentiates so much between iPhone data and dongle-data) indicates making a FAIR profit from iPhone users.

    I do, however, agree that Vodofone, Telstra and Optus are all indulging in ‘Market Segmentation‘*

    My concern is that the difference that Voda et. al. are using to segment the market appears to be gullibility and/or susceptibility to advertising pressure.

    The Telcos went through similar pricing/invoicing problems in the mid/late 90’s, and if I recall correctly, were required to change the way that they dealt with it in order to mitigate the “Unexpected Massive Bill” phenomenon. (Pre-paid plans was part of this strategy – Sorry, I cannot find my references to the ACCC guidances on this issue at the moment.)

    This is a particular problem is the supplier does not provide an easy and accessible method of identifying your current spend/bill during your billing period or contact you if something unusual (i.e. massive overspend) occurs on your bill. (Credit card providers, for instance, attempt to contact you if you have an unexpectedly large transaction, or your spending location changes – these are NOT difficult systems to implement.)

    * In this case it involves providing a similar service to different markets at a different price-point.

  10. @Stilgherrian: The barrier for you to move to another carrier is low, but what does the barrier separate? If what I’ve read is true, and I believe it is, the difference between each Telco is minimal. For every angry customer they lose, they gain one from Optus and Telstra.

    As for a better argument, I thought of it this morning and kicked myself for not writing it yesterday:

    You wrote “Can anyone give a rational explanation for why the data should be more expensive if the device happens to be an iPhone?“, and my simple answer should have been “demand.”

    Also, I’d sooner respect a company driven by profit than a company driven by “the common wealth”, as the former is the thing that achieves what the latter aims to achieve, and the latter invariably ends up doing nothing more than confiscating others’ means for their ends (through the Government, of course.)

    I don’t foresee a not-for-profit FAUC surviving without Government funding, it would not have the drive (actually, it might for the first six months), and it wouldn’t attract the people needed to get a thing like that going. On the other hand, for the same reasons, I see it being highly successful if it was profit driven.

    In fact, I wish I liked telecommunications more, or even understood the essentials, because it seems as if there’s an unmined goldfield of consumers out there, waiting only for good service, competitive pricing and a decent overall product to dosh over streams of their hard earned.

  11. There is a new website — non commercial — that has a working spreadsheet with scenarios that allows you to calculate mobile phone plans — including a sheet for iPhone.

    This sheet gives actual figures for going over the cap etc so comparison is more accurate. I used it and found out, surprisingly, that Virgin Beancounter (pre paid) was cheaper for me than any other plan including capped plans. As you have found out Capped Plans are not capped at all.

    The sheet was developed by a Whirlpool user:


    There is also useful discussion over at Whirlpool itself.

  12. @Francis Xavier Holden: A useful comparison tool indeed. Thank you. The Fairfax papers also have their own mobile phone plan comparison tool.

    @Alex: You’re right, in general there’s not a lot of difference between phone companies because they all treat phone service as a commodity item, i.e. phone calls all the same and price is the only differentiator. None has chosen, say, quality customer service as a differentiator. Since technically they’re all heavily dependent on Telstra for landlines and Internet data anyway there’s little else for them to compete on.

    (Telstra continues to operate in its own delusion-bubble, insisting they can be more expensive because they offer a “premium” service when technically there’s no difference and their customer service is consistently rated the worst — but that’s another story.)

    Yes, you should have used “demand” as the explanation. Demand to own the iPhone 3G within hours of its release was sufficient to override people’s perceptions that the pricing was wrong. A few weeks later, the rush is over and now those eager-beavers have the hangover of a 24-month contract locking them into data rates much higher than those now being offered. “Suckers,” I say.

    Telecommunications is indeed a ripe field, ready for you to exploit. People are social animals, and will spend money on their communication. Plus you can buy wholesale capacity from the Big 4 and re-sell in different packages.

    Now, FAUC…

    I think FAUC’s greatest problem is that to create a telco requires a sustained effort, with a lot of paperwork and other boring stuff. The people who’d love to be FAUC member-customers are also, I suspect, likely to have very short attention spans and won’t be able to sustain focus.

  13. Unfortunately both the online comparison tools above don’t include data.

    Even if they did, it’s going to be very difficult for most users to estimate their data usage given the iPhone behaves differently to other devices and most people wouldn’t have a clue how much they will use until they start getting their bills.

    It’s interesting how the telcos are pricing mobile broadband. The question is whether their policies will kill off demand and innovation in the Australian market.

    I suspect take up of mobile services won’t be huge until one of the big three breaks from the pack and starts offering data allowance similar to landline plans.

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