Virgin Mobile announced yesterday it will be raising the cost of international calls for mobile customers – and judging by the reactions so far, customers aren’t happy with the changes.
The telco’s Big Cap, Big Plans and Fair Go plans will be affected by the changes, which will apply from February 28. Virgin Mobile contacted customers by email Monday and yesterday posted the announcement on the Virgin Mobile website’s community forum, causing some forum members to express their disappointment at the proposed changes.
As the only major provider in Australia to include international calls in its plan allowances, as well as offer premium handsets like iPhones and coverage with Optus’ 4G network, Virgin Mobile has long been a preferred option for many customers who call overseas frequently.
Virgin Mobile’s unique benefit has been, and will continue to be, that it is the only major carrier to allow for a customer’s full included value (their largest plan offers $700 of included value for $59) to be used on international calls if the customer chooses. Other plans from major carriers usually make you pay an excess rate for international calls, whilst some top tier plans from other carriers offer a small allocation for international calls (typically up to $100). Other SIM only providers have offered international calling plans, but none of them also offer you a subsidised iPhone or Galaxy S3 with 4G LTE at the same time like Virgin Mobile does.
Mobile customers on the affected plans were previously looking at between $1.80 – $3.60 per minute for international calls, depending on their plan and the country being called (plus a 40c call connection fee). Countries were divided into four separate groups, which determined what pricing structure calls would be charged under – for example, Group 1 countries such as New Zealand and the UK were the least expensive, at $1.80 per minute, while Group 4 countries such as Afghanistan or Zaire cost $3.60 per minute to call.
As of the 28th, two additional groups will be added and countries will be reassigned zones. For Group 1 countries, the cost will rise only slightly to $2.00 per minute. But for countries in the new Group 6 category, rates will skyrocket to up to $25.00 per minute. As some of the countries that Virgin Mobile is placing in this group used to cost just $2.80 per minute to call, the decision hasn’t exactly been well-received by customers.
Virgin Mobile has been quick to defend the changes. In an announcement posted yesterday, the telco stated changes to the top 20 most frequently called countries would be minimal, and insisted that less than 1% of its customers call countries in the categories most affected. Virgin Mobile empathised with customers feeling inconvenienced, but has defended the decision as necessary to prevent the company charging calls to some countries at a loss. In explaining why the prices will go up, Virgin Mobile advised:
“These changes are influenced by a number of factors including market shifts, international exchange rates, foreign government regulations and other varying factors. This means the cost to Virgin Mobile for international calls has risen and as a result Virgin Mobile has had to pass these costs on.”
Virgin Mobile Australia
This may be of little consolation for some customers, who’ll find under the new pricing their international call credit may run out much sooner than it did previously. However, if the major price hikes are directed at 1% of the user base, this usually means that there’s likely to be an abnormal spike in a usage graph to some countries that Virgin Mobile have seen on their network statistics that they are looking to reign in with increased pricing as the lever to do so. Telstra are proposing to throttle peer to peer network users on their broadband network to address similar network usage spikes.
In this world of social media, it will be interesting to see whether Virgin Mobile stays with the changes or gives way in to the pressure that some people are trying to apply in their forum. Vodafone experienced a similar reaction from prepaid customers in January after announcing it would be charging for data in 1MB blocks, a significant increase as it had previously billed in 25KB blocks for most plans. After much public criticism, the telco revised its decision soon after and dropped the minimum charge down to one kilobyte blocks.
Given that Virgin Mobile has built its brand on the principle of giving their customers a ‘fair go’, perhaps the company will respond differently to the user feedback in this case, but Virgin Mobile’s retention of the international calling allowance still sets it way above the rest if you’re looking for a new top tier handset on a plan as you can’t get that feature anywhere else. With some of the great features of Virgin Mobile’s plans – such as rollover minutes, free voicemail, and unlimited Virgin to Virgin calls and text – it would be unfortunate for the company to experience an exodus of previously happy customers over one pricing issue.