Telstra and the iPhone - the silence is deafening
Adam Turner wonders if an iPhone-less Telstra will lose customers.
Only a few months go Australians feared Telstra might have the monopoly on Australian iPhones and would gouge customers wanting to get a slice of iPhone goodness on Next G. Then Vodafone threw its hat in the ring, closely followed by Optus. Now the second-gen iPhone has been officially announced and will hit Australian shelves on July 11, but still not a word from Telstra.
That fact that two phenomenally arrogant companies such as Apple and Telstra couldn't strike a deal shouldn't really come as a surprise. Both like to grandstand and both are obsessed with "owning" the customer.
It would seem Telstra is paying the price for last year's scathing comments about Apple and the iPhone. Telstra technology boss Greg Winn called the iPhone "old hat" and said that "There's an old saying -- stick to your knitting -- and Apple is not a mobile phone manufacturer, that's not their knitting."
The fact Australians are rushing to pre-order iPhones with Vodafone and Optus would suggest that Apple might be handier with 3mm circular needles than Telstra gives it credit for.
If Telstra sticks to knitting socks and doesn't offer the iPhone, will Next G customers get cold feet? I think so.
Coverage and speed have always been Telstra's justification for Next G's exorbitant pricing structure, but the competition is fast catching up. Vodafone and Optus are rapidly expanding their national HSDPA networks, to the point where Vodafone will almost match Next G's coverage footprint by Christmas. At that point customers sick of being screwed by Telstra will have little reason to stay - but they need to read the fine print.
Although Vodafone and Optus are expanding their 3G networks in the 900MHz frequency band, the new iPhone will not support these networks, only 850, 1900 and 2100MHz. As such, coverage will be limited to existing 2100MHz 3G coverage – outside these areas Optus and Vodafone users will fall back to painfully slow GPRS data speeds.
Hutchison's 3 network has also been conspicuously quiet on the iPhone front, which is surprising considering Hutchison Telecom in Hong Kong announced it would be selling the iPhone. Considering 3 targets the young, hip demographic you'd think the iPhone would be the perfect fit.
Of course Telstra's insurance policy against iPhone defectors is its Next G two-year contract lock-in. Punters are unlikely to switch networks for the iPhone if it's going to cost them $1000 to break their contract. You can bet there are plenty of Next G users counting the days until they can break free of Telstra.
Even if Telstra does offer the iPhone later in the year, it will have a difficult task on its hands convincing users not to defect to Vodafone or Optus - especially city slickers who don't care about slow regional data speeds.
Steve Jobs revealed that the 8GB iPhone 2.0 will sell for $US199 and the 16GB model for $US299. This is a considerable price drop, but this pricing is available to those who sign up for a two-year contract with AT&T. Jobs promised global pricing parity, but this might only apply to shoppers who sign up for a two year deal with their local telco.
Next G users looking to switch to the iPhone 2.0 now will want to buy one outright and slip their existing SIM card into it. There's no word yet on outright pricing, or whether Job's pricing parity pledge applies to outright pricing. If it doesn't, the woeful state of the greenback might see Next G users start to import 3G iPhones from the US.
Of course Next G owners with an iPhone in their pocket are far more likely to buy content from the Australian iTunes Store than from Telstra's BigPond. Considering services like this are where the real money lies, perhaps Telstra has made a strategic decision not to sell iPhones and hand customers over to Cupertino. Like I said, both Apple and Telstra are obsessed with owning the customer.
There's still a month until the 3G iPhone hits Australia shelves and anything could happen. Optus and Vodafone are obviously holding their cards close to their chests so they're not undercut by the other. Analyst group Ovum predicts Vodafone will sell the iPhone for $0 up front, which should bring in the shoppers. If Telstra is going to accept that there is a phone in Apple's knitting bag, it needs to stitch up a deal with Cupertino soon or be left out in the cold.
Other Blog Entries written by Adam Turner:
Thoughts on this article? Add a comment below.
Comments: 1
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garfieldfan
Jun 11, 2008 10:38 PM
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Telstra has its own music and movie downloads . To support the opposition(iTunes) over its own network and pay apple any fees(if there are any) I cannot see happening.That would be taking business away from their own content. Hardly likely !! |