|
Author: Dan Bieler
T-Mobile Germany has announced three new tariff options for price-conscious mobile users.
The €59 per month "Relax 1000" tariff includes 1,000 minutes of calls to all domestic (no premium) numbers, both fixed and mobile (i.e. 6 cents per minute in theory). SMS are charged at 19 cents. Users of the €59 Relax 1000 option do not get a subsidised handset. To get a subsidised handset, the monthly charge is €69. Once the free minutes are used up, the per-minute charge is 29 cents.
The flat-rate 'Max' tariff offers unlimited domestic on-net calls and SMS as well as calls to fixed numbers for €35. Off-net calls cost 29 cents and off-net SMS 19 cents. The €35 offer excludes a subsidised handset. To get a subsidised handset, the monthly charge is €44. 'Max' comes with a T-Mobile@Home fixed number.
The prepaid 'Xtra Smart' offer allows callers to make domestic on-net calls and calls to fixed numbers for nine cents per minute, if they spend at least €30 per month. Off-net calls cost 29 cents. Users who spend less than €30 per month pay 29 cents for on-net calls and calls to fixed lines and 49 cents for off-net calls.
Comment: Deutsche Telekom announced its intention to bring down mobile charges during its Q2 2006 analyst call. The company also reported results for T-Mobile Germany. Service revenues were down by 3.2%, EBITDA by 10.4%, operating free cashflow (OFCF) by 16% and blended ARPUs by 9% (pre-paid ARPUs -22%). The leading proponent of no-frills mobile offerings in Germany, KPN's E-Plus, reported a 10% increase in service revenues, a 24% EBITDA increase and a 180% increase in OFCF. E-Plus' prepaid ARPUs remained flat.
Whilst T-Mobile Germany still enjoys much better cash efficiency thanks to the scale effect, the threat the mushrooming no-frill offerings pose to T-Mobile is manifesting itself in the financial and operational results of Deutsche Telekom. E-Plus attracted 410,000 net additions in the quarter, whilst T-Mobile Germany only managed to add 169,000 subscribers. Over the last year T-Mobile lost 1% market share to E-Plus.
T-Mobile Germany's counter attack is thus arguably overdue. The question remains how effective it will be. In the no-frills segment, two main issues are key for deciding which offer to take: price and simplicity. We do not believe that T-Mobile's new tariffs are clearly the more attractive offerings, all things considered.
Simyo charges 16 cents for all calls (SMS: 11 cent), Aldi Talk costs 15 for all calls and SMS and 5 cents for on-net calls, and klarmobil costs 14 cents for all calls and 4 cents for on-net calls. There are no minimum monthly spends. On the contract side, E-Plus' BASE flat-rate costs €25 for unlimited domestic on-net calls and SMS as well as calls to fixed numbers. Off-net calls cost 25 cents and off-net SMS 19 cents. BASE excludes a subsidised handset.
Occasional customers still seem to fare better with the no-frills offerings than with 'Max' and 'Xtra Smart'. The "Relax 1000" offering, meanwhile, we would interpret as a defence of the high-end contract customer, where current contract ARPUS stand at €35. But with average German contract MoU of around 180 minutes, the attractiveness of having 1,000 minutes charged at 6 cents might be lost on many users as they simply do not use their mobile often enough. But these kind of offers will intensify fixed-mobile substitution. The pressure on T-Com's dual-phone T-One offering will therefore increase as well.
|
