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Hard and Fast


2Degrees prepay price change

By Antonios Karantze, in , posted: 21-Jul-2012 20:13

I noticed on a tweet (from Steve Biddle, of Biddlecorp) that 2Degrees had changed it's pricing for texting between 2D mobiles.... see here....

http://www.2degreesmobile.co.nz/prepay/topping-up/top-up-and-get

The key sentence being:
**From 6th August 2012 our standard 9 cent text rate will apply to all 2degrees to 2degrees texts.

Fair enough: 2c is an attractive rate but not really one to make profit on, and 9c is still a good rate anyway. With the continuing massive shift towards Mobile Data and WIFI Offload (where you use wifi instead of the carriers mobile network), the use of Apps to communicate means that texting will be going the way of Voice over the next 3 years.

That you get 300 texts bundled in when you make a $30 topup means that most people will never see a charge for texting anyway.

While the 'topup and get' offer remains, and this is the rub for me.

My grumpy moment comes from how I learned of the change. A tweet, from someone I happened to have connected to. Hardly the most common channel of communication.

2Degrees of course are entitled to make changes; they need to make money after all, and it's covered in their T's and C's:

"Notices and Changes to this Agreement and our Plans
(a) We may change this Agreement and/or vary any Service at any time.
(b) Changes will be published on www.2degreesmobile.co.nz. Please check www.2degreesmobile.co.nz regularly for updates as continuing to use the Services after changes have been published will mean that you agree to this Agreement as amended.
(c) We will give you at least 10 working days prior notice, and where possible we will try and give you 30 days prior notice, if any changes we make materially increase our charges or materially reduce the elements of a Service you are using or change this Agreement so that it has a material detrimental effect on you. We will notify you of these changes by publishing them on www.2degreesmobile.co.nz."

Good on them for stating what their policy is, and how they will do it. 

Of course, publishing price changes to the website and classing that as 'giving me notice' is a bit on the nose; if any other service provider like Telecom, Vodafone or TelstraClear, bank, power company or Council took that approach they would feel customer wrath pretty quickly.

I'm guessing there's a bulk email to the customer base coming in the next 5 days (I hope so) from 2Degrees, where they standup and  state 'we've changed the price, and it's gone up'. I really hope that 'we published on the website' doesn't become a way of working, because it's a pretty naff way of treating your customer.

I'm fully expecting that the bundle pricing will change again and continue to become less generous; that's a common market strategy (low prices to attract, end the offer and replace with one that's not so good and hope switching inertia does the rest) I've seen and executed before.

The consolidation and change in the NZ telco industry has only just started; more price changes are coming across the board, and not always downward.

EDIT: Forgot to add, I am a 2Degrees subscriber for voice and data, hence my personal interest!

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Comment by Kiwikid, on 21-Jul-2012 21:16

Isn't it nice how you sit on the company's side. They've got to make a profit after all. Of course they do. And you know, a couple of years ago a congressional committee investigation came up with the staggering cost to phone companies in the States for txt services. They calculated that it cost the companies approximately 0.006 cents per txt. Now, tell me that doesn't apply here too! Go on, I dare you. Not only that, on calling charges, well my wife went to the States for a niece's wedding in 2008. Bought a prepay phone, motorola candbar basic type. $10! Came with $20 prepaid credit. Txt costs? 5c!!!! To any carrier. Call costs? $1. Per. Call... no matter how long it was. 1 second, 1 hour, 1 day (assuming the battery would last that long) the same flat charge. Now tell me we aren't still being ripped off!


Comment by Publius, on 21-Jul-2012 22:14

They did just double the $10/2500txt pack to $10/5000txt/mth.
The issue is not that they are removing the 2c rate because as you say there aren't many who are paying it, but how well they go about communicating it. And there are plenty of ways to favourably spin it too.
I bet they wont put in on their front website page :)


Comment by Linuxluver, on 22-Jul-2012 08:33

2Degrees will be under pressure from their financial backers to make a profit. I'm fairly certain they have been in investment mode (ie: not profitable, but building / investing) from Day One. They have to pay for all that infrastructure and the planning, administration and maintenance around it and do it in a country with 4.5m people, most of whom don't get paid very much.  

It's the same old story with respect to NZ: Remote from suppliers, relatively expensive per potential customer...and those customers are on relatively low wages compared to most Western countries...and getting (relatively) lower the longer the National Party is in office working hard to push wages down, as they have been.

We're lucky to have 2.5 cellular choices in NZ. I see 2Degrees as a 'half-choice' because in most of the country their service is delivered via Vodafone....though about half the population can directly access the 2Degrees network. Where I live and work in Auckland I'm able to be on 2Degrees 95% of the time, but you don't get very far out of Auckland (and sometimes in Auckland) before you find you're roaming on Vodafone.  

They will want to recover that massive investment and make a profit.....or their business isn't sustainable and it would only be a matter of time until they shut it down.    


Comment by freitasm, on 22-Jul-2012 09:05

The people commenting above seem to have missed the point. The post is about the company not being proactive at communicating price changes to its customers.


Comment by idkpmiller, on 22-Jul-2012 14:57

@kiwikid, you "dare" someone (seriously, high school) to show that an american organisation cannot successfully calculate the actual costs of a service, hmm I submit the state of the American worldwide deficet and its narrow escape from not bieng able to pay its own troops overseas as evidence.

The original post made some really good and fair points... Let us not undermine the thread anymore with tacky antagonistic comments.


Comment by Kyanar, on 25-Jul-2012 12:15

I'm not sure how legally sound their assertion that they can post material changes to their website and call it notice is.  Over in the states (let me finish...) a recent court decision found that material changes to a contract cannot be made without actual notice, and the onus cannot be on the customer to contrinually check for changes to their agreement.  Although this decision isn't binding on NZ courts, if this were to come up the NZ courts could look to this decision as a factor in their own decision, and 2degrees could be struck down... hard - and I would fully agree. I don't think it's fair that a company believes they can unilaterally change the contract by publishing a change on their website. If they believe that, then I could publish a change to the contract by putting a note on my letterbox.  After all, there's nothing stopping them dropping by and seeing if I left a note for them right?


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antoniosk's profile

Antonios Karantze
Wellington
New Zealand


I'm a born and bred Wellingtonian, and have chosen IT and Telecommunications as my industry, as a Commercial Manager.

Credits include but are not limited to:
- The O2 Xda smartphone range, and O2's range of 3G Mobile Internet services
- Numerous TelstraClear Mobile and IP voice products

In my journey through the industry I have worked at
- Bellsouth NZ
- Telecom NZ
- ICO Global
- T-Mobile International (formerly One2One Communications)
- O2 Plc
- TelstraClear
- Vodafone NZ

I'm a fan of technology, and what it can do for people and business... and I enjoy bringing new things to market and seeing them grow. Enjoy the blog, take the time to think about what I write - it's not technology heavy, and is my reflection on life and the people around me.