Regulation of mobile termination rates

Forums › 2degrees (including Slingshot, Orcon, Flip, Stuff Fibre, MyRepublic, 2talk and Vocus) › Regulation of mobile termination rates

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amanzi

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#583387 19-Feb-2012 12:13

cokemaster: You're missing the point. I'm not saying its wrong to offer term contracts (even if there are / are not open terms versions), I'm saying its wrong to rail against them and then turn around and offer them anyway.

And I think you're missing the point of the original ad — at the time most (if not, all) postpaid plans from other providers had to be signed up with a 12, 24, or 36 month term. 2degrees changed that by offering all of their plans on a month to month term. Sure, they introduced term plans for those who wanted to get a free phone when signing up, but it was a game changer to offer all plans on zero term. The new XT plans all appear to be available on 0, 12, or 24 month terms but I can't remember if that was the case when XT first launched? And I bet Telecom have some business plans still lurking around that require terms. Same with Vodafone, lots of their business plans still require a term.

Wade

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#583389 19-Feb-2012 12:28

My point was that 2D campaigned against them (they ran TV advertisements) that basically said that those were bad for the consumer and 2D was going to change all that for the better - yet have bar on-net SMS and bestmate have implemented all that they campaigned against initially.

You could argue 2D's free calling groups was a "bestmates" of sorts

2D have made a lot of people happy with them and a lot of people happier with their competition, as others have eluded to it hasn't really dragged down the cost but significantly increased the value proposition

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#583391 19-Feb-2012 12:40

NonprayingMantis:
sbiddle: Why just pick on 2d? Vodafone and Telecom haven't changed their base rates either. You can accuse 2d of a significant backtrack on their original comments, but the reality is rates for voice calls have fallen significantly across all networks in the past year. Not necessarily on prepay - but why should they? Should a company offer it's best pricing to what are in effect "low value" customers, many of whom have absolutely no loyalty? If you ran a business and had base rates that are still well under your competition would you drop your prices?

If you go on a 2d plan you're paying effective voice rates of ~18c per minute, assuming you don't factor in SMS or data value. Factor in this value ($10 + $6) on a $29 2d plan and your effective voice rate is ~8c per minute.

Price optimisation and differentiation is a key thing in this modern world.

actually Telecom changed theirs from 89c down to 69c. They have also launched SKinny with ratesof 39c. They also launched Total HomeMobile which has a 29cpm flat rate
Vodafone also launched a prepay plan with a 49c rate.(this may have been before MTRs came down, not sure)
Telecom also reduced their Fixed to mobile calling rates by more than MTR

Lets also not forget that Telecom and Voda never claimed that reducing MTRs would reduce prices, that was 2Degrees claim.

Telecom did drop the rate from 89c to 69c. They also moved from min+sec billing to min+min which represents an increase in revenue of roughly 20% - %25, with the drop falling smack bang in the middle. This meant there was in effect no gain or overall loss of revenue to Telecom as a result, but it enabled them to pitch a cheaper price.

Skinny is a MVNO with a vary narrow target market and Vodafone's Simply Prepay had limitations (such as no addons) that made it unsuitable for many people. I can't actually see any mention of Simply Prepay on the VF site so don't know if it's actually still an option. This plan existed before MTR cuts took effect.

I was against many of the MTR changes, so what has happened hasn't really surprised me. Previously both Telecom and Vodafone had binding commitments with the government to cut prices when MTR rates drop, this no longer occurs.

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#583422 19-Feb-2012 14:06

Simply prepay is now Prepay Smart that can have addons that include NZbestmate / Data / SMS / Any NZ network minutes

John

wongtop

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#583944 20-Feb-2012 15:26

I think the mobile space in NZ has been quite interesting since 2degrees launched. In my view they have been really clever at pitching their price points in order to gain customers without getting into an all out price war with Vodafone and Telecom. They are obviously targeting getting a reasonable use base, while at the same time trying to keep their tariffs at a reasonable rate. The fact that they have been able to gain almost a million customers without going thermonuclear on prices (like FREE France) is a testament to their strategy.

They started with the 44/9c opening salvo for prepay, and haven't had to change this yet. Also there have been no pricing changes that I am aware of to the postpay packages. Of course they are adding various packs, but the main aim of these appears to be to give better value, rather than to cut prices (i.e. maintain or improve ARPU). My pick is that they won't significantly lower prices until competitive pressure from the other two players forces them to. They will be quite happy with the number of customers that they continue to pick up with their current tariffs.

I have been somewhat surprised about the lack of competitive response from the others. There have been adjustments to packages to give increased value, and we have seen the emergence of prepay SMART from Vodafone and Skinny from Telecom, but neither of them seem to have gone for a knockout blow, and now with 800k+ customers, 2degrees must be approaching financial viability.

Before the arrival of 2degrees Vodafone by my reckoning had about 2/3 of the mobile revenues (50% of the market and about twice the ARPU of Telecom). My guess is that they still have 50+% of revenues as they will have mainly lost low value customers to 2degrees.

The real wildcard in the picture is Telecom. They would have been hoping to pick up market share and revenues with the launch of the XT network, but this has been made significantly more difficult by the arrival of 2degrees. In addition, in the next few months they will have to shift about 50% of their customers from the CDMA network onto XT. My pick is that Telecom is actually in the least comfortable position of the 3 players at present, and it will be interesting to see how aggressive they are in the market over the rest of this year.

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#583947 20-Feb-2012 15:31

wongtop:
The real wildcard in the picture is Telecom. They would have been hoping to pick up market share and revenues with the launch of the XT network, but this has been made significantly more difficult by the arrival of 2degrees. In addition, in the next few months they will have to shift about 50% of their customers from the CDMA network onto XT. My pick is that Telecom is actually in the least comfortable position of the 3 players at present, and it will be interesting to see how aggressive they are in the market over the rest of this year.

That's why Telecom set up Skinny for. To catch those still on CDMA..

Regards,

Old3eyes

ajw

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#583950 20-Feb-2012 15:33

old3eyes:
wongtop:
The real wildcard in the picture is Telecom. They would have been hoping to pick up market share and revenues with the launch of the XT network, but this has been made significantly more difficult by the arrival of 2degrees. In addition, in the next few months they will have to shift about 50% of their customers from the CDMA network onto XT. My pick is that Telecom is actually in the least comfortable position of the 3 players at present, and it will be interesting to see how aggressive they are in the market over the rest of this year.

That's why Telecom set up Skinny for. To catch those still on CDMA..

And according to recent reports in the media about one million customers still on the CDMA network.

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wongtop

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#583955 20-Feb-2012 15:38

My MIL is still on CDMA - $10 text. She's definitely not in the Skinny target market. I would think that a good proportion of CDMA handsets are in the hands of older NZ's who aren't into having the latest and greatest handset. Skinny seems targeted at the youth market.

ajw

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#583996 20-Feb-2012 16:14

Telecom: a million problems, one 'Skinny' solutionhttp://www.techday.co.nz/telecommunicationsreview/news/telecom-a-million-problems-one-skinny-solutio/21530/

http://www.stuff.co.nz/business/6219748/Prepay-mobile-price-war-tipped

http://www.stuff.co.nz/dominion-post/business/6397050/Vodafone-resolves-pre-pay-glitch

ajw

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#584588 21-Feb-2012 14:55

Amazing to see the amount of low use prepay plans available in Australia.

http://prepaidplans.com.au/

DonGould

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#587118 26-Feb-2012 22:31

Opps... here's the right MTR thread.

Ok, as I was saying, Yes, I'd like to see ComCom but out of the MTR thing now and leave industry players to do as they choose...

My current preference would be that MTR goes up.

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Behodar

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#587226 27-Feb-2012 09:57

amanzi: The new XT plans all appear to be available on 0, 12, or 24 month terms but I can't remember if that was the case when XT first launched?

I'm replying a bit late but yes, Telecom did offer open term at XT launch.

freitasm

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#587229 27-Feb-2012 10:09

Behodar:
amanzi: The new XT plans all appear to be available on 0, 12, or 24 month terms but I can't remember if that was the case when XT first launched?

I'm replying a bit late but yes, Telecom did offer open term at XT launch.

One of the reasons I ported from Vodafone to Telecom, even after ten years with the red company. The fact Vodafone did not offer non-term contracts and wanted to lock me in just so that I could get the right plan put me off, even if I didn't want/get any free handset from them.

In essence a term contract not only lock people in, I think it also locks people out - those people like myself who don't want to be bound by things that can quickly become outdated.

Behodar

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#587251 27-Feb-2012 11:00

freitasm: In essence a term contract not only lock people in, I think it also locks people out - those people like myself who don't want to be bound by things that can quickly become outdated.

I completely agree. I didn't sign a term contract on CDMA but I was happy to change to postpaid when XT launched. As it happened, I did eventually sign up to a 24-month term last year because the phone subsidy made it worthwhile.

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