Vodafone absorbs tax on top-ups, launches Google phone today

Vodafone Malta is to absorb VAT and excise tax on mobile top-ups from today as it launches two highly anticipated handsets: the HTC Magic with Google and the latest Blackberry Curve, chief executive officer Inaki Berroeta told The Sunday Times.

The triple announcement comes at the end of a momentous summer for the mobile operator during which it saw considerable growth in its mobile data business and corporate offerings, and significant take-up of its main pre-paid plan. Internally, the past few months have seen Vodafone launch a new portal and upgrade its call centre.

With 215,000 active SIMs, Vodafone Malta has maintained its position as market leader this year and currently commands half of the entire market (households and business users), according to statistics collated by the Malta Communications Authority. In terms of network share, Mr Berroeta said Vodafone had won about two points.

"Ever since its rapid introduction, we have always opposed excise tax and we made requests to the government to have it removed," Mr Berroeta explained. "There is already one tax - VAT - and it is taking very long to get a court mandate on this issue. It is very difficult for customers to understand the tariffs when there is a tax on top-ups. Our two main goals are to be transparent, and make mobile phone service more affordable."

Vodafone Malta is the second operator to make the move in a matter of days after Melita Mobile said it would absorb VAT and excise duty to allow consumers to get the full face value of top-up vouchers.

It is one year since Vodafone brought the Blackberry to Malta, which Mr Berroeta described as an "incredible success" that had revolutionised the local business market. The company, he pointed out, had even surpassed its own very aggressive sales targets.

He added that Vodafone Malta was looking to introduce a 'lighter' Blackberry tariff (currently starting at €25), similar to plans offered in other countries where the Blackberry comes with some of the functionality. Pre-paid Blackberry plans will also soon be made similar to post-paid plans.

Vodafone is constantly breaking its stock of the recently introduced iPhone 3Gs as very high demand for the device took the company by surprise - a similar situation to other markets where the new iPhone became instantly popular.

Asked to compare Vodafone Malta's iPhone tariff to other markets, Mr Berroeta explained that Maltese customers enjoy a better tariff than many European countries, with monthly plans starting at €20 and roaming tariffs at €3/MB. He promised "further development" to this end.

The chief executive described the HTC Magic 'Google phone' as "a lot of fun, it's like a computer". The handset provided a similar experience to the iPhone, he said, with many more possibilities for software developers and users who want to develop mobile applications, thanks mainly to its Android operating system. The handset comes free with many tariffs which are similar to iPhone plans.

"Mobile data is the fastest growing part of our business and it is also what has given Vodafone an edge on the market," Mr Berroeta emphasised, adding that Netbooks with integrated broadband had also proven highly popular.

"Many customers are looking to get data in the palm of their hand and have turned to Vodafone because of our portfolio of products and our network. In the past, anything that had to do with data was very much aimed at business customers. What we have done this summer is launch pre-paid data bundles which can be used on voice plans."

Mr Berroeta is particularly pleased that pre-paid customers have migrated to the 'Talk for An Hour Pay for a Minute' tariff in droves after its May launch. He anticipated that the vast majority of pre-paid subscribers would opt for the tariff by the end of the year.

The response to the tariff fits perfectly with Vodafone's short-term aim to do away with its collection of diversified phone plans. Instead, the company is to move to a model offering basic tariffs for pre-paid, business, and post-paid customers to which a selection of add-ons for calls to fixed line or data bundles can be attached.

Mr Berroeta conceded that the practice of giving away handsets with some plans was an expensive exercise for mobile operators but one which paid off in the long-term in terms of customer loyalty. Vodafone, for example, subsidises iPhone handsets that cost around €700 each to acquire.

"At the end of the day it is of benefit to the customer," he pointed out. "The scheme also encourages the sale of high-end devices. Subsidising handsets is economically not a good move for us but, in reality, the issue is not the rate, it is customer experience."

Vodafone is to kick off an ambitious €10 million project to upgrade to green base stations to ensure increased energy efficiency. The network will also be upgraded to accommodate heightened speeds that will be made available to subscribers soon, including 4G.

The company's internet business is growing significantly thanks to increased demand for capacity from the ever-expanding igaming and financial services industries. Mr Berroeta said Vodafone's €12 million investment in the submarine cable between Malta and Catania had served the company well and it is the only operator to have never experienced a fault on its infrastructure.

Internally, the Vodafone team is now looking forward to moving from its Valley Road block to state-of-the-art premises at Malta International Airport's business centre in mid-2011 where it will be the anchor tenant.

After almost dismissing suggestions earlier this year that Vodafone was seeking to venture into other business like TV, Mr Berroeta said it was a case of never saying 'never'.

"We think there is room for a good TV offering in Malta," he said. "I cannot say 'yes' or 'no', but it is something that we always consider because this market needs a little more variety than what is on offer."