Optus offers best value iPhone deal, Citi says

http://www.smh.com.au/news/iphone-in...658000789.html

Optus offers best value iPhone deal, Citi says
July 10, 2008 - 1:11PM

Australia's second biggest telecommunications provider Optus offers the best
value and most flexible deals for Apple's 3G iPhone, which will go on sale
tomorrow, according to analysts at a major bank.
"Optus is leading the market on 3G iPhone pricing, both in terms of cost and
flexibility, with all existing cap plans available," Citi analysts Tim
Smeallie and Phil Campbell said in a note to clients.

The iPhone will be available from Optus, owned by SingTel, at no upfront
cost on their $79 cap plan, which will include $550 worth of calls and 700
Megabytes (Mb) of data each month. Calls are charged at 35 cents per half
minute with 35 cents of flagfall.

Vodafone, the world's biggest mobile service provider, will offer the
handset on a $69 plan, but with an additional one-off charge of $189.

Australia's biggest telco, Telstra, won't have an upfront charge for the
iPhone on its $80 plan, but will only include $70 of calls and 5 Mb of data.

The analysts said there was some risk to Optus's margins through the higher
subsidies and backhall costs, but chief executive Paul O'Sullivan had
pointed out that competition in the mobile market would intensify.

On the other hand, Telstra could charge a 27% premium before scaring mobile
customers away, which was evident over the past two years, Mr Smeallie and
Mr Campbell said, citing a Citi consumer survey.

The analysts said Telstra's pricing seemed to be voice centric and designed
to protect the company's existing mobile content.

Data usage on the iPhone may not be as high as expected because customers
won't be able to download iTunes from the mobile network, the analysts said.

Vodafone's plan will include $350 of calls, at 35 cents per half minute and
25 cents flagfall, and 250 Mb of data per month.

Vodafone's upfront costs may be mitigated by a shortage of the iPhone
handsets in the early stages, the Citi analysts said.

While the fourth biggest mobile service provider Hutchison
Telecommunications hasn't said it will sell the iPhone, the analysts noted
the company offered the Nokia N95 8Gb, which has similar capabilities to
Apple's handset. Hutchison, which provides mobile services under the 3
brand, sells the N95 on a $49 cap plan with no upfront charge.

"This offers a viable alternative to the iPhone," they said.

AAP