Forums › Spark New Zealand (including Skinny and BigPipe) › Telecom Highest charges in OECD countries

guyz

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#15781 8-Sep-2007 00:36

This articule from NZ Herald

Telecom charges higher than other countries - commission

12:34PM Friday September 07, 2007

Telecom has come out badly in the Commerce Commission's latest comparison of phone costs in New Zealand compared with other developed countries.

The Commerce Commission ranks Telecom near the bottom of the pile for every type of customer.

On one measure - the FLEXI Anytime call plan for medium users of mobile phones - Telecom is 30th out of 30; the most expensive in the OECD group of developed nations.

Telecom's "Mates Rates" prepaid plan, which is sold to people who make very little use of their mobiles, comes out at almost double the average cost of similar plans elsewhere.

Vodafone plans score slightly better, although people who do not make a lot of calls or do not send many text messages still pay much more than they would elsewhere.

And restrictive conditions on its Base 20 plan, including a two year contract term, heavy early termination penalties, no handset rebate and no international roaming, were criticised.

High volume users and businesses fare slightly better, but still paying well over the OECD average.

On home phones New Zealand lags as well, with costs in the top five on pretty much every scale.

The one bright spot in the survey is for heavy users of landlines in Wellington and Christchurch, who have their phone services billed by TelstraClear.

They come in a fraction cheaper than the average a similar user would pay elsewhere in the OECD.

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#85831 8-Sep-2007 09:39

This is yet another poorly written article from the Herald (as usual), a number of key points are missing (which should be researched ideally before publishing):

Telecoms mates rates prepaid plan has a clone plan at Vodafone called motormouth - however motormouth does not include any text (SMS) bundles, thus making motormouth more expensive.
Choose 20 still has a higher per minute charge than Flexi anytime (~$1 per minute vs $0.82 max per minute (as prices go down with higher use). (source Telecom website, Vodafone website ). The method used to evaluate the flexi plan is questionable as unlike traditional plans, flexi does not have a set allocation of services, you can mix and match and calling gets cheaper with higher usage.
There is no discussion about the Flexi Mytime plan which offers one of the cheapest off peak rates around (at 20c per minute for the first 100 minutes a month, then 10c per minute - ANY network, no limit).
They don't exactly point out that with traditional mobile plans, use too much - watch out... you'll get stung with high call rates. (source: Vodafone You Choose, Vodafone Motormouth (my favorite - enjoy $1.39 anytime off net calling anyone??), Telecom Freetime, Telecom Anytime Go)
Base plans offered by Vodafone are rarely advertised and hidden on the Vodafone website, they also have roaming disabled which the only reason is to make these plans as unattractive as possible as roaming is a cash cow for them. It has been speculated before that these plans are there solely for the purpose of getting low stats. (hidden on Vodafone website, not being 'up front' with the plans)
The ability for the herald to conduct research is questionable - see screw ups including wireless cdma, or the even better instance where they have a wifi adapter being used to receive freeview transmissions (source)
Anytime/Anytime plus/0161 gives significant calling discounts for international, and domestic call calling.
The herald is driven by the 'if it bleeds it leads' mantra, which leads to 'research' coming in last as smearing companies is always popular, this has been well documented on geekzone. (sources: here, here, here, here, and here. Or google search on geekzone).

Based that you've just copied and pasted the herald article - you want discussion on it... why not step forward and add your opinion.

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#85837 8-Sep-2007 10:08

I would hardly say whatever comes out of NZ Herald in the technology pages is word from heaven...

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#85839 8-Sep-2007 10:33

without seeing what bundle of calls they are making you cant really compare providers plans. I have both a Telecom and a Vodafone mobile and use the best of both Worlds. cheers George

guyz

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#85852 8-Sep-2007 16:13

I think its fair to say that we do pa far more than other telcom providers in other countries. the purpose of the copy past e artcule is to stimulate thought ,comments and possibly incite or inspire people to follow up and research whether this is indeed the case or as commented inaacurate. My opinion is this, based on telecoms past treatments of pricing passed on to both wholesale and public, i would say the article wont be too far off the mark. possibly the commentators to this topic who argue against culd possibly provide research data to show else wise, that yes...we are ineed on a par or pay less than the oecd countries!

please comment and lets see the proof that profers to say telecom indeed provide a pricing to us joe publics a cheaper than oecd countries get presently

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#85854 8-Sep-2007 16:36

Well there are many factors involved with the environment in New Zealand, and I don't think you understand the impact of this article when its primarily about cellular mobile pricing and then you talk about Telecom wholesale (who wholesales broadband connections to the likes of Orcon, Ihug, Slingshot etc). They are two different products - like apples and oranges.

Don't forget that both Telecoms and Vodafones mobile broadband pricing is extremely impressive to what some other operators offer and has less strings attached.

I am of the opinion that OECD figures do not mean much if anything, as they tend to be misused. There are many factors involved that many country vs country comparisons fail, but it doesn't stop people from abusing those figures. Many of these 'havens' discussed by proponents of $10 broadband often bring up countries like USA, Australia and others where they all have their own issues with internet connectivity, vastly different populations, geographic layout, domestic issues, and other issues (education and health care in USA).

Both prices for mobile and broadband have been coming down, and in my opinion are already quite affordable. Yes it doesn't mean that you can torrent the latest movies from overseas, however it is still broadband nevertheless.

However, one must question the ethics of someone posting FUD from the herald and then demanding proof to prove it wrong - 'lets see the proof that profers to say telecom indeed provide a pricing to us joe publics a cheaper than oecd countries get presently', if anything, the burden of proof should be on the herald before making such claims or the poster for recycling them.

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#85864 8-Sep-2007 17:32

However, one must question the ethics of someone posting FUD from the herald and then demanding proof to prove it wrong

I only see someone asking for comments (demanding nothing) on an article in the New Zealand Herald which is pretty much the same as the Commerce Commission article. There is nothing to be gained from deviating from the facts in the article so why not stick to them? cheers George

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guyz

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#85914 8-Sep-2007 22:38

What i find most intersting is that herald would not publish an article unless there were some bases to its comments and if you read it states "THE COMMERCE COMMISSION" has made the comparrison on mobile charges compared to other countrie, not the herald. Now is COKEMASTER questioning me and my integrity? i asked for opinions and comments on the article, why is he directing negative comments at myself? i find it very un proffesional

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#85918 8-Sep-2007 23:26

guyz:
What i find most intersting is that herald would not publish an article unless there were some bases to its comments and if you read it states "THE COMMERCE COMMISSION" has made the comparrison on mobile charges compared to other countrie, not the herald. Now is COKEMASTER questioning me and my integrity? i asked for opinions and comments on the article, why is he directing negative comments at myself? i find it very un proffesional

However, the commerce commission made those claims fair enough - however is it too much to ask the herald, a so-called 'mainstream media source of New Zealand' to do some fact checking before passing on everything as fact. Some rather interesting examples from the herald include:

I am merely pointing out that the herald has a proven track record of not performing simple fact checking or research when it comes to articles of the IT/Telco genre, and questioning the ethics of someone who is picking up this article and presenting as fact, while clearly with less than 10 minutes of research, one could start to poke holes in some of the claims made.

However I am not here to try and convert you, I have no hidden agenda at all, except for pointing out that some of the claims in the report are questionable, and that the herald should have done research into those. Given that, many news outlets have their shortcomings (look at the likes of fox news), however the heralds articles in the IT/Telco area are of questionable nature and it wouldn't be recommended to use them as sources. To knowingly use them except for the purposes of ridicule is ethically wrong.

Referring your labeling of me being 'unprofessional', may I remind you are the one populating the geekzone forums and stating: "i would say the article wont be too far off the mark" and "lets see the proof that profers to say telecom indeed provide a pricing to us joe publics a cheaper than oecd countries get presently " that you may need to check this site. The word 'naive' also comes to mind, particularly with the heralds known relaxed approach when it comes to 'facts' and what they classify as fact.

Life goes on if we don't get the cheapest internet or mobile pricing in the world (lots of factors involved there). What is important is that it is affordable and fits the needs of New Zealanders.

Being a Vodafone and Telecom customer, I can say that both networks have had their moments and the prices have been dropping over the years since I've been a customer with them. I remember when there was $1.39 per minute on peak and 49c on peak, its come a long from those prices plans like You Choose, and Flexi reducing prices.

Again, the whole 'big penis' or 'pissing contest' competition that our politicians and media seems to be having, results in taking figures out of context, selective usage of statistics, ignoring localized information (ie. USA, Korea, Japan etc), and other factors (yes, you may get cheap interwebs but wtf happened to the cost of living/health care/hidden fees/taxes etc).

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#85924 9-Sep-2007 01:00

This is not an attempt to fan any flames, however thanks to freitasm, I recently came across OECD Telecommunications Outlook 2007. The read-only copy (which was available for free mid-July) doesn't seem to be available anymore (or I can't find it) and I'm not sure if putting screen images here is a good idea but using the PPP NZ comes in 13th most expensive in OECD low user mobile basket (Aug 06), 12th most expensive in OECD medium user mobile basket and 13th most expensive in the high user mobile basket, all out of 30 countries, so we are slightly above average for these services. For an introduction to PPP, see http://en.wikipedia.org/wiki/Purchasing_power_parity

edit: just google the title and you'll see a copy. see p216. you can also find previous years.

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#85947 9-Sep-2007 11:40

Just to show that statistics can be used to prove almost anything, and to show how Cokemaster is quite right when evaluating other plans, this was posted in the TUANZ blog today:

“New Zealand has some of the developed world’s most limited (mobile phone) competition and highest retail prices.”

That’s what TUANZ said in "The Independent" on 22 August. We based our comment – often repeated – on OECD and Commerce Commission statistics.

The plan Tom is quoting – Vodafone Base 20 – in March indeed showed up as 15^th most competitive of 30 OECD countries. But what he forgot to say was that it was but one of nine plans the Commission measured. The other eight ranged from 19^th, to 30^th most competitive. That’s right – in one case, the developed world's dearest!

Yesterday the Commission issued its quarterly stats for June. They’re not much different. “Base 20” has worsened from 15^th to 17^th, costing just 3% above the OECD average, no doubt reflecting prices falling more elsewhere than here. But ALL the rest are between 20^th and 30^th!They include Vodafone's popular "Motormouth Prepay" which ranks at 28^th, costing 55% more than the OECD average.

But wait - the Commission has something to say specifically about the “Base 20” plan that Vodafone held up as a shining example. “Base 20 has an extraordinary number of restrictive conditions, including a two year contract term, heavy early termination penalties, no handset rebate, and no international roaming, which is likely to make it unattractive to the vast majority of mobile phone users.”

Now, you see, from this perspective Vodafone New Zealand is actually worse than Telecom New Zealand. And as Cokemaster pointed out before the TUANZ blog post went live, Vodafone is not only more expensive but the company also puts lots of restrictions into the more affordable plan, making it look cheaper, when in fact it takes away features.

guys: My opinion is this, based on telecoms past treatments of pricing passed on to both wholesale and public, i would say the article wont be too far off the mark. possibly the commentators to this topic who argue against culd possibly provide research data to show else wise, that yes...we are ineed on a par or pay less than the oecd countries!

As requested, posted by TUANZ...

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#86097 10-Sep-2007 14:57

Can i ask two questions although Cokemaster and others have really made a mockery of the article.

1)are the rates comparisions based on a per captital or population based?

2) How can NZ compare or be on par to Aussie and other countries with much larger pops and much larger pockets for infrastructure?

Getting sick of hearing how expensive it is to use Telecommunications in this country, blah blah blah.

The facts
Mobile data compared to Aussie is cheaper and is getting better, land base Broadband pricing is on par with Aussie in some areas, although Aussies have access to faster DSL speeds and some better offers, mobile calling is coming down drastically and free calling deals are being offered through out the market, plus the infrastructure required is not small and all to often this is left out of the arguement. We are a small country with 4million people with difficult terrain and abnormal population spread. This needs to be taken into consideration..

The regulator has a hand in the prices anyway, they are the reason that Telecom have charged so much for so long in the access market. Dam pain when you are trying to retain or win business and your competitor who buys Access and tolls at wholesale is able to undercut your deal everytime due to regulated access prices for Telecom.

Anyway thats my spin.

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#86126 10-Sep-2007 16:35

have to agree that the amount of media FUD that comes out from the Herald is unbelievable. It almost seems on occasions they get the shakes if they go a whole week without an article critical of mobile, broadband, etc. Last week it was Theresa Gattungs exit pay and inviting readers to comment on it (for 3 days) - who cares! Its one of the main reason I joined this forum. Being overseas I was interested to keep up to date with developments back home - but couldn't rely on the media websites - so thanks cokemaster, freitasm - very interesting comments.

From what I understand (and someone correct me if I'm wrong) - the OECD bench marking is a straight forward statistical exercise relative to exchange rate (i.e - they attempt to compare plans based on an equivalent exchange rate mechanism to give a spread of costs from high to low). IMHO - quoting OECD stats re average charges without bench marking it against average income is meaningless. What's needed is an idea of purchasing power (i.e - the cost of services relative to income). Would someone paid an average US wage or UK wage find our charges expensive if coverted back into USD or Euros? I don't know. Simply saying that our charges are higher than the OECD average - so what? So is our petrol, so is our electricity, etc. What's scary is the number of times OECD bench marks end up as Govt policy. And then it ends up in the newspaper word for word of course....

daman88

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#86180 10-Sep-2007 20:08

Uber Geek Vs Master Geek LOL

Certainly, as you know NZ Herald always publicised most of the IT/Telco crappy story anyway.

I do agree with Cokemaster, what's the standard or what's the benchmark of OECD rankings?
Does it mean anything to anyone?
Most of the time, NZ will come last because we just can't compete with USA, Australia, Japan, Korea etc.....due to population density. If NZ has a population density like Korea, I will bet you txting will cost $0.01, calling $0.20 per minute, video messaging $0.05 I am sure everybody will be happy with that price. There won't be not only 3 mobile players in NZ, there will be 5......
everything comes down to govt, population, all sort of factors......

I am sure everybody wants cheap lunches everyday ............ one of this day will come :-)

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#86502 13-Sep-2007 06:48

Telecom could conduct a price war against Vodafone.    Here's a reply I wrote to Peter Griffin of The Herald regarding Telecom ditching CDMA2000 in favour of W-CDMA [same as Telstra is doing] which is a BAD idea and will lead to higher costs in New Zealand, not lower. http://griffinsgadgets.blogspot.com/2007/02/case-for-telecom-keeping-cdma.html

Telecom wastes a fortune on marketing cellphones. They could stack it high and sell it cheap. Wal-Mart became huge by doing that, so it's not necessarily a bad idea though low price is unfashionable in MBA schools. Everyone wants to be high-end and high-priced, same as everyone thinks they are above-average at driving, although simple arithmetic shows they are not.

In other countries, there are often 5 service providers. In New Zealand there are only two, so while NZ is sparsely populated, it's not as bad as Australia or USA in the rural hinterlands from a coverage point of view per capita per base station.

For example, the Waikato and Canterbury regions have lots of farms, with houses close because the land is so fertile, with only two providers. Australia is drier, with bigger farms and a lot more service providers having to share the customers.   Same in the USA. We don't get snow covering the ground for a large part of the year. We don't have desert-like regions with sparse populations.

After conducting a price war, the 450MHz spectrum would not be used much as 450MHz users would migrate to Telecom's cheap high performance EV-DO system and buildout of EV-DO into 450MHz could then be done to make the system even cheaper and better, with greater coverage.     Coverage is much easier to do in 450MHz than in 800MHz or 2GHz - it takes a fifth as many base stations in 450MHz as 2GHz [though mountains and valleys are an issue causing shadows].

There is no need for dopey Econet bludging on Vodafone or Telecom investments [using their sites and towers or even networks]. Nor is there a need for a third network. What's needed is Telecom to take market share from Vodafone because Telecom has a better network which can compete on price.   Telecom could shut Vodafone down.   Sure, profits would crash until Vodafone gave up. But they'd recover as customers migrate and then the price war ends when Vodafone sells their W-CDMA and obsolete GSM/GPRS to the scrap merchants and convert the antenna sites to cafes.

Now there's a thought. Zenbu could buy them; [they have backhaul], and run a Wi-Fi system and cafe network.   2GHz isn't needed in New Zealand [other than perhaps in cities though I doubt that - our cities are empty compared with the hordes on the Yamanote Line, Circle Line and seething in Times Square].

GEOMAX

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#86504 13-Sep-2007 07:30

In New Zealand we are living in a market driven economy. If excessive profits were being made would we not have more mobile providers looking for a share? Government initiatives like unbundling help but the ultimate challenge is free competion.
Considering everything are we getting a good deal without realizing it? cheers George