Optus introduces daily $1- plan for prepaid users in new price war
15 Oct 2010
Australian telco, Optus has taken up a defensive position to protect its turf with a new pricing strategy offering calls for $1 a day, say analysts.
Last month Telstra had revealed that it was targeting prepaid as one of the three battlegrounds on which it would take its plans for expanding market share forward. Fixed telecommunications and mobile phone plans are the two other targets it would focus on, Telstra had said.
Telstra consumer head, Gordon Ballantyne, told investors last month that the company had been a laggard in the prepaid business which has been something of a poor cousin in its portfolio.
Optus unveiled a new pricing strategy today called ''dollar days'' to buttress its position No 1 position in the prepaid mobile services market.
Under the ''dollar days' plan Optus customers would be charged not on per call basis but would be offered a whole day's worth of unlimited usage from first call in the morning until midnight.
Customers will not billed unless they use the phone.
According to industry experts, Optus's most expensive offer allows unlimited calls, texts and web browsing for $60 per month.
Optus while denying it was a pre-emptive measure, said the dollar-day plans had been under development for five months or so and have little to do with any response to Telstra.
Optus consumer head Michael Smith said yesterday that Optus would do what it had always done – develop products, in response to customer feedback and not in response to its competitors. ''We will do what we've always done - develop products in response to customer feedback, not in response to our competitors.''
Telstra saw its prepaid customer base decline by 76,000 to 3.5 million subscribers last financial year, although the company's revenue was up. Optus has around 4.2 million prepaid subscribers, as per its last annual report.
In its latest report Vodafone Hutchinson Australia (VHA) reported 3.2 million prepaid customers.
VHA last week hiked data and voice allowances on prepaid offers, and on Wednesday Telstra announced doubling of data allowances on prepaid caps.
Though revenue per user is generally lower for prepaid customers, carriers get margins as they do not have to provide a handset, billing or customer care. However, prepaid customer revenue is rather less predictable because they can easily switch carrier, according to analysts.
The new Optus credit would be valid for up to 60 days depending on the amount of credit bought, and options would not be locked in.
