news Vodafone customers concerned by the company’s move decision last month to start charging for mobile data usage on a per megabyte basis can rest easy, with the company announcing it would back down from the decision, in a move it dubbed a “Vodafix”.
Early in January, the ailing mobile telco ramped down the value it gives customers as part of some of its prepaid plans, eliminating free access to social networks and changing the way that it account for mobile data, so that customers would pay per megabyte used rather than per kilobyte. The move meant that customers would pay for a full megabyte of data even if they only used a much smaller amount, in a similar way that it is common for mobile telcos to charge for voice calls in 30 second blocks or so.
However, following a customer backlash, yesterday Vodafone announced what it termed a “Vodafix”. “Vodafone today announced it will be changing the way it charges for data going from a proposed per megabyte block charge to per kilobyte charging,” the company said in a statement. “The decision follows feedback from Vodafone prepaid customers, who favoured simplicity but expressed concern about per megabyte charging.”
Vodafone noted that it had surveyed 10,000 customers before Christmas on the megabyte proposal, and had received “general acceptance” with regard to the pricing change. But the feedback after it was announced had pushed the company back the other way.
Cormac Hodgkinson, Vodafone’s Director of Customer Care, said: “We value customer input that helps us deliver pricing that is simple and makes sense. We are determined to show our customers we are listening.”
“There’s no denying data pricing is confusing, industry-wide. Our intention is to introduce a consistent rate across our prepaid plans, and there’s more than one way we can do this. We have decided to not only reverse our decision to introduce per MB charging, we’ll also be dropping the existing minimum data session to 1kB for all our prepaid customers.
“We are committed to listening, being transparent and providing our customers a worry free experience. Thank you to all our customers who took the time to talk to us. Please do not stop. It’s what drives the way we do business. We have some of the best value plans in market and, now, 2.6 million customers will benefit from simpler pricing. Pay only for the data you use – it doesn’t get much simpler than that.”
The customer backlash over the megabyte pricing comes as Vodafone in Australia continues to suffer from a poor reputation stemming from a series of network outages over the past couple of years which customers have dubbed ‘Vodafail’. In mid-November the company revealed it lost a further 154,000 customers in the three months to the end of September, with the continued customer churn piling on more financial woes for the company and signalling that the company’s internal transformation under new chief executive Bill Morrow may not yet be having a positive impact.
In Vodafone Group’s global financial results, the company said “the continued weakness is brand perception and [mobile termination rate] cuts” in Australia meant that revenue from mobile services declined by 14.8 percent in the period.
The company is currently embarked on network rejuvenation initiative in Australia, and is taking other measures such as restructuring its operations and shutting down its subsidiary Crazy John’s retail brand. However, Vodafone continues to suffer from troubling network outages.
On Friday last week, for example, the company published a post on its blog letting customers know that it was experiencing a disruption to 2G and 3G services across parts of Victoria including select areas of metropolitan Melbourne and surrounds. “Customers in these areas may be experiencing degraded or no service,” Vodafone wrote. The services were restored later that afternoon.
I never viewed the prepaid per megabyte pricing as a huge issue for Vodafone (personally, I already pay top dollar through Telstra), but apparently many of the company’s customers disagree, and right now Vodafone is nothing but the creature of customer sentiment. If there is something Vodafone’s customers want right now, you had better bet the company will bend heaven and earth to give it to them – because if it doesn’t, those customers will join the hundreds of thousands who have already deserted the telco over the past several years. Customer retention is the name of the game with the big V right now.