Vodafone and 3 attempt to ward off ACCC with pricing promise

Stan Beer
Monday, 25 May 2009 15:19

Opinion and Analysis

The announcement then goes on to say that both companies in the event of the merger proceeding have confirmed that, "all new and existing contract customers of Vodafone and 3 will be able to enjoy the same great value offered on all existing Vodafone and 3 mobile voice and data plans for the next 2 years."

Given that many subscribers have already recently signed on to a two-year contract, that's good to know.

The announcement also says that $0 upfront 24-month contracts will still be on offer. That's also good to know but still says little about the pricing of those contracts.

Nigel Dews, CEO of 3 and proposed CEO of VHA, the merged company, said: “We operate in a fast-moving market and we want to be clear that, following the merger, Vodafone and 3 will remain extremely competitive and continue to provide great value to customers.

“We’re happy to reassure our customers with a public commitment that if the merger proceeds as intended, no plan will be withdrawn from market for the next two years.

“During this time we will also be introducing new offers and services to appeal to new customers.”

What the above amounts to is a limited guarantee that the new player will maintain the currently aggressive pricing policies of both companies for just two years. After that all bets are off.

It's hard to see how the creation of an operator of the same scale as the current two big players will not result in a lessening of competition. True, there will be a choice between three big operators, a similar sort of choice that we currently enjoy between the big four banks - and we know how hard they compete don't we?