206,000 Customers - Not bad...

Forums › 2degrees (including Slingshot, Orcon, Flip, Stuff Fibre, MyRepublic, 2talk and Vocus) › 206,000 Customers - Not bad...

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1916 posts

Uber Geek

#298635 13-Feb-2010 14:31

Hello,

I am a little unsure what you mean by the whole 72 cents business?

But what I worked out in a perfect world;

xt 1 min = $0.89
over 1 min = 1.483 c/sec

1 min/ 1 sec = 90c
1 min/ 5 sec = 96.4c
1 min/ 20 sec = 118.6c
2 min = 178c
3 min = 267c

2degrees
1 min 44c
2 min 88c
3 min 132c

Therefore 2degrees is never more expensive than xt prepaid.

rugrat

3107 posts

Uber Geek

Lifetime subscriber

#298639 13-Feb-2010 14:47

http://www.telecom.co.nz/mobile/yourmobile/topup

They actually give you extra credit on top of top up, put $20 on phone and give you a top up of $25.

So for calculations I just roughly reduced price and pretended still $20 top up so with prices trying to compare apples with apples.

72 minute charge with top up not exact but just to show example.

SteveON

1916 posts

Uber Geek

#298641 13-Feb-2010 14:58

I see, yes that does sound right considering the 'bonus' topup.

NonprayingMantis

6434 posts

Uber Geek

#298644 13-Feb-2010 15:05

Stuve:
NonprayingMantis: really? you do know that every single XT plan is available open term, right? (that means no contract).

Okay...

Go to the following page...
http://store.telecom.co.nz/mobile/pay-monthly/one-rate-100/24/samsung-s5603t-black?pid=int046&special-offer-tab#bolt-ons
I can see a mobile phone on a 24 month plan...

"The Samsung S5603 is only $199 on a 24 month One Rate 100 plan. Mobile only $499.

Offer valid until 31 March 2010 or while stocks last."
The double one rate 50 plan was also 24 months,..

ok. I see that. so what?

now click the 'plans and pricing' tab on the same page.
select any plan you like (one rate 50, one rate 100 etc etc)
you will see they are ALL available on open term.

what you are looking at is the special offers i.e. sign up for 24 months to get a $xxx discount off the handset or double minutes or whatever. (the name of the tab should have given it away - it's called 'special offer')

NonprayingMantis

6434 posts

Uber Geek

#298647 13-Feb-2010 15:11

Stuve: No to mention that I would have to go on to the One Rate 180 @ $79.95 just to get $0.44c calling.

However If I was to use 2D @ $80/mo. I would get an extra 800 FREE text messages and 22c calling to landlines/2degrees...

if anything that reinforces my argument.

If people are moving to 2D to save money, then total market revenue should have gone down (because people that wer previously paying, say, $60 now pay only $40 on 2degrees. Instead, using the numbers the all three providers have put forward, the market has grown considerably.

It just doens't quite ring true to me.

TinyTim

1042 posts

Uber Geek

Trusted

#298653 13-Feb-2010 15:33

If people are moving to 2D to save money, then total market revenue should have gone down (because people that wer previously paying, say, $60 now pay only $40 on 2degrees. Instead, using the numbers the all three providers have put forward, the market has grown considerably.

It just doens't quite ring true to me.

Mobile calling is quite elastic (sensitive to price). If people are getting cheaper calls then they probably call more and spend the same (or more), rather than call the same and spend less.

(This isn't the reason, just a possible reason)

cookernz

22 posts

Geek

#298662 13-Feb-2010 16:29

Just want to throw something in. I used to have to do Telco market number crunching when I worked for a firm in the UK. So I am interested by the announcements.

From what we can see 2D have given us their 'active' subscribers on network [users with usage in the last month].

VF have given us 'adds' in the last quarter. 9k.
XT have given us 'add's to XT/CDMA. 60k adds.

The big question is how companies are reporting on disconnects. All telco's reflect adds immediately, but how do you define a non-active Pre-pay customer? Is it a user who has been dormant for 1, 2, 3 or 6 months? Policies vary on this hugely [ depending on what the stat is used for ].

I think what we are seeing here is lagged reporting. I.e. VF aren't reflecting their lost customers yet, because they wait 3, 6 or 12 months to work out if they aren't really a customer anymore.

A market usually has natural churn between providers. Vodafone's 6k I think would be natural churn from Telecom and growth in the Post-pay.

If we assume that non-porting distribution of the losing carrier is = to porting subscribers, it would appear 2D isn't stealing away from Telecom that much (only about 20% from Telecom).

We know approximately that Telecom's ARPU is ~$10 [driven by $10 text]. VF's is >$20 I think I heard someone say once [does anyone know the real figure?]. If 2D are stealing customers from VF, then you would expect a similar ARPU on 2degrees as VF. The argument that people spend less when the price drops is simply not true. Telco and other consumer markets clearly show that if you make an item cheaper, the consumer consumes more until they get to their perceived spend threshold or its physically not possible to consume more. This would reflect with 2D's statement that that they have higher ARPU than Telecom.

What seems telling is that they won't say if its higher than VF's which would suggest it isn't or else they'd brag about it.

I'd also be fascinated to know how many SIMs they sent out. I wonder how much that cost them? Anyone know the cost of a SIM?

Just a thought.

Quic Broadband

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lzahari

4 posts

Wannabe Geek

#298666 13-Feb-2010 16:35

It is an exceptional brand new network with superior quality...I am using 2Degrees 3G on IPhone and I get the best service all the times.

nzbnw

2374 posts

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Trusted

Spark NZ

#298668 13-Feb-2010 16:40

lzahari: It is an exceptional brand new network with superior quality...I am using 2Degrees 3G on IPhone and I get the best service all the times.

So you're on the 2D 3G trial?

nzbnw

cookernz

22 posts

Geek

#298669 13-Feb-2010 16:45

TinyTim:

Mobile calling is quite elastic (sensitive to price). If people are getting cheaper calls then they probably call more and spend the same (or more), rather than call the same and spend less.

Just realised I repeated TinyTim's point on consumption.

richms

28187 posts

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Trusted

Lifetime subscriber

#298670 13-Feb-2010 16:49

If you have ported your number off VF to 2degrees then you cant still be counted as you have no connection to them anymore. Most people I know that have changed telcos have moved VF PP to 2 degrees and ported.

Richard rich.ms

cookernz

22 posts

Geek

#298681 13-Feb-2010 17:02

richms: If you have ported your number off VF to 2degrees then you cant still be counted as you have no connection to them anymore. Most people I know that have changed telcos have moved VF PP to 2 degrees and ported.

Depends how you're measuring. I've seen some colourful uses of statistics over time.

Take 2degrees for example, their measure is wide open to being flawed in this way. What if you go to their reporting system and ask for a report that doesn't contain a condition for 'currently connected accounts'. They could be counting all accounts that have made an activity in the last month including in-active ones and still be able to make the statements they did.

Either which way porting would only account for a 40k drop in VF base [if we believe 2degrees stats].

The bottom line is, as with accounting practices, it is VERY hard to compare apples with apples. Believe me I used to have to do it as a job. The only way you can really do it, is by looking back. That's why the next 2 quarter reportings from Telecom, VF & 2D's will be interesting.

Market behaviors don't change overnight. I.e. most people don't all of a sudden start carrying 2 sims in their pockets. What is far more likely is that apples are getting compared with oranges and that just doesn't work.

On top of that I still can't find a definition for VF's 9k 'adds' statement. Does someone have a link? Does it definitively define that it's their running total of customer base?

SteveON

1916 posts

Uber Geek

#298702 13-Feb-2010 18:18

After looking at the figures I can see from past results vodafone?s growth has been:
Q2 08 - 2.366
Q3 08 - 2,401
Q4 08 - 2,427
Q1 09 - 2,464
Q2 09 - 2,502
Q3 09 - 2,511
Q4 09 - 2,484 ? First term of 2degrees
Q1 10 - 2,493
Now going on the previous data of 6 quarters before 2Degrees opend; Vodafone had an average growth of 24,166 customers per quarter.
Using data from the first quarter of this year; Vodafone is down almost two thirds of their average signup rate. This is another significant drop considering the quarter before they saw a net drop of 27,000 customers.

We all know that the market penetration has hit 100%, and I highly doubt everyone including your 5yr old son has a simcard. Therefore looking at the number is hardly possible to get a plausible answer. What you can look at is that Vodafone?s growth has surely slowed. It could be for the fact that the market has hit the top of the growth curve anyway, which I would assume happened last year anyway.

Vodafone only grew 9,000 connections in Q3 09 anyway ? so maybe 2degrees isn?t really having too much of an effect.

On the point of spend:
It will take time for people to switch, I am a business customer who switched 2 weeks ago only because I don?t like contracts and I really want to try something different. I actually spend more than I did on xt and Vodafone (which @ one time had plans for both totalling 6 years or so). however I do not mind being out of a plan as I get more FREE texts (saving $12/mo) and more calls too. The only thing I miss is Data and best mate rates.

However I do not mind as I know data will be better priced in 4 months anyway, not to mention texting should almost be free by October.
I want to be with the company who will give the best rates as they get them. 6 months after 2degrees started; VF and Telecom have NOT matched nor have they dropped their calling rates, 2degrees already have once, with more international countries and free texts.

I do note that Telecom DID have the double minutes offer (24months) and the non-stop texting promo is still going, also vf are offering more ON-NET texting plans and better data pricing.

nzbnw

2374 posts

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Trusted

Spark NZ

#298708 13-Feb-2010 18:54

Stuve: not to mention texting should almost be free by October.

If you're referring to MTR's, as has been discussed countless times here on Geekzone, there is no relationship between MTR or wholesale rates between the carriers and retail rates.

nzbnw

ajw

1932 posts

Uber Geek

#298712 13-Feb-2010 19:17

nzbnw:
Stuve: not to mention texting should almost be free by October.

If you're referring to MTR's, as has been discussed countless times here on Geekzone, there is no relationship between MTR or wholesale rates between the carriers and retail rates.

nzbnw

Yes the topic of MTRs has been discussed frequently on Geekzone. Please note this recent press release by Viviane Reding on the need for regulating MTRs.

Cheers.

Viviane Reding

Member of the European Commission responsible for Information Society and Media

Ending the Fixed-Mobile-Subsidy: the new Commission Recommendation on Termination Rates in the EU

Press conference on Termination Rates
Brussels, 7 May 2009

This morning, the European Commission has adopted a Recommendation on the regulatory treatment of fixed and mobile termination rates in the EU.

This Recommendation addresses the serious inconsistency between national approaches concerning the regulation of termination rates – the wholesale fees which phone operators charge each other for connecting calls to subscribers on their networks. And it addresses the indirect subsidy that fixed operators and small mobile operators currently have to pay to mobile operators with significant market power.

Why regulate termination rates?

Let me recall that we are not talking about market prices here, but termination rates that are set by the 27 national telecoms regulators.

The reason national regulators intervene is because call termination represents an important competition bottleneck. Each network operator controls the completion of calls to its own subscribers. It is easy to understand: You can only offer, as a network operator, a communication service to your customers if you can connect them to the customers of all other operators. This means also that you depend on the cooperation of other network owners. And those with significant market power can exert a lot of pressure on other operators via the rate they charge for the termination of a call. This is the competition reason behind the regulation of fixed and mobile termination rates.

The Recommendation adopted by the Commission today will help eliminate price distortions between big and small mobile phone operators across the EU and also distortions between fixed and mobile operators.

The Commission Recommendation will also lower consumer prices for voice calls – remember that termination rates are ultimately included in everyone's phone bill.

Finally, the Recommendation will help the creation of a level-playing field and more consistent regulation on the European Telecoms Market, thereby triggering investment and innovation in the entire telecoms sector.

Getting rid of distortions of competition between the 27 Member States

Let me first talk about mobile termination rates. Despite efforts made by some national telecoms regulators to bring down mobile termination rates so as to reflect the real costs incurred by the operators – I mean by this in particular the Swedish, Finnish, French, Italian, Austrian and Romanian regulator who have started to go into the right direction as regards mobile termination rates –, we still face a situation with rates varying considerably from Member State to Member State. In 2008 mobile termination rates ranged from 2 eurocents per minute in Cyprus to 8 eurocents in Germany, over 10 eurocents per minute in Greece and almost 16 eurocents in Bulgaria.

Such fragmented price regulation poses a serious risk to our single borderless market for telecoms services in Europe and is a real threat to Europe's competitiveness.

These wide differences in rates cannot be explained solely by differences in costs or national circumstances and they distort competition between Member States. And between fixed and mobile operators.

Getting rid of distortions of competition between mobile and fixed operators

There is also an important distortion of competition between mobile and fixed operators

Currently mobile termination rates are also typically 10 times higher than fixed termination, with fixed termination rates ranging on average less than 1 eurocent per minute and mobile termination rates ranging to 8.55 eurocents per minute.

High mobile termination rates are thus an indirect subsidy for the larger mobile operators – a subsidy that has to be paid by all fixed operators, by smaller mobile operators and by all consumers.

While there may have been a greater tolerance of high mobile termination rates when mobile networks were first being rolled out across Europe, they can no longer be justified today, at this advanced stage of mobile market development.

If you just look at this table (slide 4), you will see that Europe is the world leader in mobile penetration, so indeed mobile market development does not need to be artificially and indirectly subsidised by fixed operators.

The regulatory approach recommended by the Commission today

What are we now doing concretely in today's Recommendation?

In today's Recommendation, the Commission sets out clear consistent principles for national regulators to follow when setting a fair price for terminating calls on fixed and mobile networks. The recommended methodology is a Long Run Incremental Costing model (LRIC). This methodology ensures that termination rates will be based on the cost of an efficient operator.

The objective of this approach is to mimic a competitive market situation. It identifies the costs which an efficient operator would face in providing the wholesale service to third parties and helps to identify the price that would prevail under competitive circumstances. At the same time, it will still allow operators to recover the cost of terminating calls.

We are confident that bringing mobile termination rates closer to efficient costs in all Member States will bring about a number of beneficial effects for the competitive process, for investment and for consumers. This will:

Lead to greater consistency and regulatory transparency further consolidating the single telecoms market;

Reduce inefficient transfers from smaller mobile operators to their larger, more established mobile competitors;

End the fixed-mobile subsidy and create a more level playing field and enhanced competition between fixed and mobile operators;

Support important pro-consumer investments, such as high-speed broadband networks, or in developing converged fixed-mobile offerings;

Result in new, innovative services and lower prices for European consumers; and

Help unlock additional revenue opportunities for EU telecoms operators through increasing customer demand.

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