O2 Ireland yesterday announced price cuts of up to 37 per cent in its pre-paid rates, but its main competitor, Vodafone, gave no indication that it would respond with reductions of its own.
The company said it had cut the cost of a range of services for its pre-paid customers by between 1 cent and 8 cent. Effective from yesterday, the largest reductions are in peak-time charges for mobile-to-mobile calls on the O2 network and peak-time calls to landlines. These went from 63 cent a-minute to 55 cent a-minute, a fall of more than 12 per cent.
The largest proportionate reduction is in the weekend charge for calls to the other mobile networks.
These were cut from 19 cent a minute to 12 cent a minute, a fall of 37 per cent. Weekend charges within the network and to landlines fell from 13 cent to 12 cent.
Similarly, off-peak calls on the network and to landlines fell from 19 cent a minute to 15 cent a minute. Peak-time and off-peak charges for calls to other mobile networks will remain unchanged at 63 cent a minute and 19 cent a minute respectively.
The company has also lengthened its off-peak times from 12 to 16 hours a day. It has cut the 8 cent a minute charge for text messages to 7.5 cent.
Commercial director, Mr Gerry McQuaid, would not say how much the price cuts were likely to cost the company, as he said the information was commercially sensitive. "It will cost us a lot, but our research shows that this is what customers want," he said.
Mr McQuaid said that the company's research also showed that most pre-paid use was during off-peak times and at weekends. He pointed out that most of the cuts were geared at reducing the cost of calls made at these times.
Mr McQuaid argued that the mobile calls were competitively priced.
"According to a Comreg [communications regulator] report, 93 per cent of people surveyed say mobile phones are good value for money," he said. "The average call cost around €1 per minute in 1997, that's down to about 20 cent now."
O2's biggest competitor, Vodafone, gave no indication yesterday that it would respond with price cuts of its own.
A spokeswoman said O2 was reacting to reductions that the larger player had introduced in recent weeks. She pointed out that pre-paid customers were now charged 3 cent a-minute on Sundays.
"They have only grown their customer base by 2,000 over the last quarter, so not that many people regard their prices as value for money," she said. However, she would not reveal by how much Vodafone's customer numbers had grown, as the company wanted to keep this information secret as it plans to release it today when it publishes its results.
Vodafone had 1.75 million subscribers at the end of last June, and it is understood that that figure has grown since then. Figures which O2 released yesterday showed that its subscribers numbered over 1.2 million on September 30th last. Both O2 and Vodafone have been criticised recently for their call charges.
