Cash Carrot For Telstra Slowcoaches
Sydney Morning Herald
Friday January 4, 2008
TELSTRA has resorted to offering customers on its CDMA mobile phone network a cash incentive to switch services, in the latest sign it is struggling to force thousands of users to make the move just three weeks before the old regional network is scheduled to be shut down.
The company yesterday introduced a $50 cash-back offer for CDMA customers who buy a pre-paid Samsung mobile phone recommended for use in rural areas. Telstra has given customers until January 28 - when the network is due to close - to accept the offer.It will not say how many customers are still using the regional network, but says it is on track to close it this month despite the possibility that the Minister for Communications, Stephen Conroy, will prevent it from happening should it fail to pass an audit. A report from the Australian Communications and Media Authority is expected to go before Senator Conroy next week. An Ovum telecommunications analyst, David Kennedy, said Telstra's cash-back offer was "fairly substantial", which suggested that significant numbers of customers were still using the CDMA network. Telstra's biggest mobile phone dealer, Fone Zone, estimated in late October that more than 880,000 customers remained on the network. However, a month later Telstra said the figure was "several hundred thousand customers". Mr Kennedy said Telstra would only be offering incentives to customers because it still had many who were resisting the switch to the much-trumpeted NextG network. "It could only be because they are not upgrading customers fast enough," he said.However, Mr Kennedy said it was unclear how many customers had switched to NextG over Christmas, which was traditionally when people upgraded their mobile phones."The faster the migration the better because during the migration period [Telstra is] bearing the cost of running two separate networks. Their cost base is elevated ... which is why Telstra is so keen to do the switch-off in the period they had proposed." But a Telstra spokesman, Peter Taylor, said the closure of the network was on track after "exceptionally busy" trading last month. Telstra was opening temporary kiosks in regional areas to help customers make the shift. The Federal Government has said it will not allow Telstra to switch off the CDMA network until the coverage on NextG is at least as good. The closure has caused consternation among country customers who worry the NextG network is inferior. Telstra has warned that customers still on CDMA when it closes risk losing their mobile phone numbers if they do not switch within a month.
© 2008 Sydney Morning Herald
