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Are the Telecom alternatives a joke?

It seems that telcos such as Telstra-Clear and Vodafone have decided that now is the time to start vying for a chunk of the local-calling market.

To date, apart from a few select areas of Wellington and Christchurch, Telecom has effectively "owned" the home-phone market and all other players have been kept out of the play by the huge cost of developing their own infrastructure.

But now, thanks to local loop unbundling and a few other factors, the other players are launching a fairly sizeable assault on this cornerstone of Telecom's empire.

Vodafone and Telstra are now trying to lure consumers away from Telecom's $45/month package and onto their own lower-cost options.

But is it really worth making such a dramatic switch for the sake of a Big Mac or a couple of latte's each month?

In fact it's worse than that -- with at least some of Vodafone's offerings effectively ruling out a heavy-duty broadband option as well.

I strongly suspect that these second-tier telcos will have a real job trying to wrestle consumers away from the safety and security that some perceive Telecom as offering.

Now regular readers might think that I'd be one of the first to jump at the chance of moving away from Telecom's monopoly on local calling... but I'm not.

Why not?

Well I'm certainly not enamoured of spending any more than I have to in order to get a phone-line and/or DSL connection but more than price, I value quality and continuity of service.

For me, being without my Net connection or voice-line for more than an hour represents a cost far in excess of the few measly bucks I might save by switching providers.

And, despite all the assurances and guarantees -- I really don't trust Telecom to offer the same levels of support and service to those who are not its customers.

If I'm using a local calling service from company XYZ through Telecom's lines and a line-fault occurs, will Telecom really be as keen to get *my* phone up and running again as might be the case if I were one of their own customers?

Well let's look at the devious ways that Telecom has tried to ankle-tap its competitors in the past and I think there would be a certain degree of risk associated with believing anyone's assurances on the matter.

Details of the Vodafone offering can be found here and to be honest, there's really not enough of difference in price or functionality to warrant that "risk premium" associated with ditching Telecom.

Yes, you can save a huge $4 a month over Telecom's own service, but you can save twice that much by switching coffee brands.

So how does TelstraClear stack up?

Well here's their PhoneLine Basic plan.

This time you'll save a whopping $2 a month and run the risk of having to deal with a helpdesk/support that has been described to me as "useless" by some who have tried it.

Come on now you guys. If you really want to steal some of Telecom's market share then you're going to have to do an awful lot better than this.

Nobody is going to switch providers for a buck or two a month in savings. Good old Kiwi inertia will take care of that. Sure, there will always be a small percentage of folks who are prepared to endure a 3-mile hike over burning embers in nothing but open-toed sandals and pure wool socks in order to free themselves from Telecom's grasp -- but the vast majority of consumers will probably say "so what?"

Obviously most of the second-tier telcos are hog-tied by the amount they have to pay Telecom for the use of its lines but how about some more creative moves in terms of DSL perhaps?

What about running a loss-leader promotion just to get people on board.

Both TelstraClear and Vodafone are fairly sizeable companies with plenty of financial clout. Why not offer a $20/month home-phone deal, valid for 24 months for the first 500,000 customers to sign up.

Yeah, you'll bleed red ink like a stuck pig -- but you'll grab a huge share of Telecom's market and then you can restore your pricing and use that Kiwi inertia to your own advantage, sure in the knowledge that although some of your newfound customers may jump-shop, most will just stay where they are.

I strongly suspect the real problem is more that our telcos are all equally greedy.

Will you consider jumping from Telecom to TelstraClear or Vodafone just to save $2-3 a month?

What would it really take to get you to jump ship with your home-line and DSL?

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