Friday 15 November 2019

Adrian Weckler: 'GoMo rips mobile market apart'

Eir boss Carolan Lennon
Eir boss Carolan Lennon
Adrian Weckler

Adrian Weckler

This column doesn't (and will never) shy away from criticising Eir when it deserves it. But last week, the company launched the most interesting, most disruptive telecoms service of the year. Eir's GoMo mobile operator rips rivals to shreds. That includes its own sister service, Eir Mobile.

It gives its users a whopping 80GB of data, and all calls and texts, for €10 a month.

Nothing else in the Irish market comes remotely close to this.

It sounds like a gimmick or that it has a major catch.

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But on the product itself, I can't find any (there may be an accounting issue, for which, see below). And I really, really like to ferret out catches.

There's a one-off €10 connection charge, but that's becoming common in the industry.

There's no speed cap, or sneaky premium rates. You get 10GB of EU roaming data, after which you're charged an arm and a leg. But that's the same as any other network.

The only compromise is that there are no subsidised phones and no stores selling it. So you can't get a new iPhone 11 at €299 on a two-year contract.

And there's no one to haggle with, or complain to, in a shopping centre.

It's just a Sim card and it's all done online: sign up, pay your subscription and get your Sim delivered. Basically, this is Eir Mobile rebadged but at a fraction of the price.

At the time of writing, it's exactly the same coverage and 4G data quality.

Admittedly, this may change in the following weeks. This column can reveal that Eir will launch its 5G network this coming week, likely on Thursday. It's the company's third big product launch (after GoMo and Eir TV) in 10 days.

I asked Eir executives whether GoMo will automatically be upgraded to a 5G service, wherever it's available. They shrugged and were non-committal.

But it's a plausible marketing plan to keep 5G for Eir Mobile as a reason to pay the extra money.

However, the 5G service will only launch in cities, just like Vodafone's current 5G service (which is only available in a handful of streets in each city).

And besides, as long as you're getting 10Mbs or more 4G, there aren't any current benefits to a phone getting 5G rather than 4G.

So unless you get your phone subsidised, or the Eir Mobile coverage is awful in your area, I can't understand why an ordinary mobile user wouldn't consider switching.

Eir says that the €10 monthly tariff "is for life". But only for the first 100,000 customers.

My understanding is that a few days into the new product, they're well on their way to hitting this figure.

Now, I'll allow for a bit of caution: if you really, really want to look for something foggy about the whole thing, it might be in how Eir plans to honour its pledge to offer the €10-per-month price to all 100,000 customers.

Like: how will we know it has extended its offer to 100,000 customers?

In Ireland, mobile operators report their subscriber figures to the telecoms regulator, Comreg. This is the only way we actually know where they stand.

But Comreg told this column that it was not expecting stripped-out figures for GoMo from Eir.

Obviously, this brings up a credibility issue. If Eir wants to be cynical, it could say that the 100,000-customer figure has been met at any time, then put the price up. Then, even if the (overall Eir Mobile) figures it does disclose to Comreg show only an extra 50,000 subscribers, Eir might argue that this is because 50,000 of its existing Eir Mobile subscriptions were cannibalised by GoMo.

If it's then pressed on why it won't separate out the GoMo subscription figures, it might revert to an 'administrative costs' defence.

But this column would never accuse a telecoms operator in Ireland of being cynical. So I'm positive that this won't happen and that Eir will provide some verifiable way to show that its 100,000 pledge is not just a dazzling marketing wheeze.

That aside, data is the be-all and end-all of a modern mobile operator's appeal, both in quality and quantity.

To date, Vodafone has had the best quality, while Three has had the best quantity.

But at a stroke, Eir (GoMo) has swept in with the best offer, at a fraction of Vodafone's price and with a third more data than Three's 'all-you-can-eat' capacity (60GB, if you check Three's small print).

One reasonable question is: how on Earth can the company afford this kind of deal? What happens if lots of people switch over?

Leaving aside the above proviso about reporting figures, Eir knows that it won't be subsidising 100,000 €10-per-month customers for very long.

As soon as a customer cancels a subscription or drops out for any reason, that's one of the 100,000 ticked off the tenner obligation forever.

So what happens then? Won't it just lose those customers to rivals all over again, if their costs go to €15 or €20?

Possibly, but not likely. If - and it's a big if - the customer is relatively happy with other elements of the service (particularly coverage and data speed), there isn't really any reason to go to another operator, except for a subsidised phone.

This is where Eir is gambling that its big mobile network upgrade will kick in.

The company's chief executive, Carolan Lennon, admitted some months ago that Eir's mobile network isn't as good as some rivals, particularly Vodafone's. But she said the company is doing something about it. It's spending a whack load of money to upgrade the quality of the network "to be as good as Vodafone's".

The bet here may be that the network hits a 'good enough everywhere' status to make retention easy.

Even with doubts over the 100,000 figure, this remains a game-changer of a product in the Irish mobile market.

Sunday Indo Business

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