Holiday phone deals hit Germany
teledotcom.com By John Blau
NEW ENTRANT MOBILCOM AG (Schleswig) has come up with yet another gimmick to capture attention in the fiercely competitive German telephone market -- free long-distance calls over the holidays.
Several new German telephone companies have announced special Christmas rates in a battle to grab market share from incumbent Deutsche Telekom AG. But none has gone as far as MobilCom, which plans to give calls away for free.
The aggressive German upstart will offer unlimited free domestic long-distance service from 7:00 p.m. to midnight on December 25 and 26. It is the first ever free telephone service in Germany.
Consumers must first dial the MobilCom access code to get a connection and then the number they wish to call.
………………………………………………………
The price of long-distance
calls in Germany has plunged
more than 70 percent since
the start of the year. But
Deutsche Telekom will slash
long-distance calls by as much
as 63 percent to DM 0.12 (7
cents) in January. The rate
cuts were approved by the
national regulator earlier in
the month.
………………………………………………………
The dial-around service is what made MobilCom a household name in the early days of full market liberalization at the start of the year. The operator, which opened shop with one switch, says it now has around a dozen switches and boasts a growing
customer base of more than six million. It's been consistently undercutting Deutsche Telekom's prices by more than 30 percent. MobilCom has also been in and out of court with the German incumbent over its aggressive advertising campaign, which has been at the center of public attention. A number of other new entrants are poised to launch their own Christmas specials. Viag Interkom GmbH & Co. (Munich) will charge DM 0.10 (6 cents) per minute instead of DM 0.16 (10cents) per minute for calls made during the day and evenings on December 25 and 26, while TelDaFax GmbH (Marburg) will offer charge DM 0.14 (8 cents) for calls from December 24 to January 4.
Competitors will monitor MobilCom closely to see whether the German upstart has promised more than it can deliver. A similar free night-time offer by mobile operator One 2 One Ltd. (London), a subsidiary of the Cable & Wireless PLC (London), backfired a couple of years ago. Demand for free calls was so huge that it collapsed the network on more than one occasion. Mounting frustration by customer unable to connect in the evening prompted One-2-One to discontinue the service.
The price of long-distance calls in Germany has plunged more than 70 percent since the start of the year. But Deutsche Telekom is not standing still. The incumbent will slash
long-distance calls by as much as 63 percent to DM 0.12 (7 cents) in January. The rate cuts were approved by the national
regulator earlier in the month.
According to the regulation agency's recently released annual report, one third of all long-distance, international and mobile calls are now handled by new German service providers.
Combined, these calls amounted to more than 11 billion minutes in the first 10 months of competition, accounting for revenues of around DM 2.5 billion ($1.5 billion). The total German
telecoms services market is estimated at DM 100 billion ($60 billion)
The agency estimates around 13.5 million GSM customers by the end of the year, representing an increase of around 65.2 percent.
It expects to issue the first licenses for next-generation Universal Mobile Telecommunications System (UMTS) in the second half of next year. "The interest is immense," said Arne Boernsen, vice president of the regulatory agency.
Also, the number of Internet users has increased to 7 million users, according to the agency report. The agency estimates revenues will grow from around DM 5.8 billion ($3.5 billion) to about DM 8.7 billion ($5.2 billion) by 2000. Deutsche Telekom's
online service has around 3.5 million users, or 650,000 more than the year before.
Klaus-Dieter Scheurle, president of the regulatory agency, said the agency will introduce a new interconnection scheme in 2000 and is working intensively on a pricing scheme for unbundled
access. The agency has interim solution, which is being contested by Deutsche Telekom. "We are aware that a lot of regulators and incumbent operators around the world are waiting to see what we decide," Scheurle said. "
Comments....
THIS ARTICLE Describes what is happening with deregulation of telecom industry. GREAT for the Consumers and EQUIPMENT Providers.
BR
|
