Our only hope with pricing...

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steveonz

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#34176 20-May-2009 14:18

With this pricing on XT, August will be a month to look forward to!

grant_k

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#216380 20-May-2009 16:22

Hopefully, when the full pricing details for XT are released next week, there may be a Prepay offering at less than 89c per minute, but I'm not holding my breath.

If Telecom and Vodafone still think that 89c per minute pricing on prepay is acceptable in the year 2009, then they need a dose of reality...

2 years ago, I went to Samoa, a poor island nation with a geography not unlike ours. They have 2 cellular operators there, one of which is SamoaTel that is part-owned by their government, and used to be part-owned by Telecom NZ, but may not be now, I'm not sure. SamoaTel was charging around NZ50c per min on their prepay plans, and 20c per TXT, similar to Telecom Go Mates Rates and the old Vodafone Motormouth plan which I have been on for several years.

Then there is DIGICEL which arrived in late 2006 and has spread to many Pacific Island nations. Their charges were about half of SamoaTel i.e. NZ25c per min and 10c per TXT on their Prepay plans.

Not surprisingly, Digicel were wildly popular and people were switching to them in droves.

If Samoa can enjoy this level of pricing, there is no reason that we in NZ shouldn't have it.

I've just checked DigiCel's web site: http://www.digicelsamoa.com/en/plans/digiflex/flex_tariffs

The prices in Samoan Pa'anga are still the same i.e. 0.45 per min. and 0.20 per SMS on the Anytime plan. Most people don't have landlines up there, so it is the on-net pricing i.e. Digicel to Digicel which is relevant. For this reason, I have used the Digicel to Digicel Anytime rates for comparison to their nearest equivalents in NZ i.e. Telecom Prepaid Go Mates Rates and Vodafone Prepay Motormouth as they both offer on-net pricing of 49c per minute last time I checked.

Because our dollar is a bit weaker, the NZ$ equivalents are a bit higher but still equate to 28c per min. and 13c per SMS which are very attractive compared to what we are being stung for in NZ.

This is the area of the market which is wide open for 2degrees unless Telecom and Vodafone choose to sharpen their pencils. Vodafone have the most to fear because they don't even let customers sign up for Prepay Motormouth any more, meaning that the cheapest prepay plan is 89c per minute. As I said at the start, it is time a dose of reality was injected into this cosy duopoly...

tonyhughes

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#216390 20-May-2009 16:47

How much money do Digicell and SamoaTel invest in their networks?
What mobile technology is there, and how long has it been deployed?
What is their future technology plans?

riahon

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#216395 20-May-2009 16:57

I would say that the average wage in Samoa is significantly less than those here so what appears cheap to your wallet might not be so for the locals.

grant_k

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#216397 20-May-2009 17:02

All good points Tony, and hard to provide answers to without the benefit of inside information which I don't have.

However, what I'm driving at here, is that there is a sizeable yet very underserved market for people who just want:

- Voice Calling (GSM would be fine)
- SMS (again, GSM would be fine)

Neither of the services above need the latest and greatest mobile technology. They just need wide-reaching coverage and reliability. Which is pretty much provided by Telecom's existing CDMA network and Vodafone's GSM base stations.

I can understand why Telecom chose not to go down the 2G path, given that they are entering this market in 2009. Clearly, their XT network isn't pitched at this area of the market.

However, from Vodafone's perspective, once 2degrees launches, in areas that are outside 2degrees' coverage, people will be able to use Vodafone's network for a cheaper price than Vodafone charge to their own customers. OK, OK, I am making an assumption there, but I cannot see any circumstances in which 2degrees could be successful by continuing to charge 89c per minute to prepay customers.

So ... why oh why don't Telecom and Vodafone release cheaper prepay plans to head off the impending competition from 2degrees before it happens?

It would let them gain extra revenue from those existing investments in older technology without spending a cent extra in new capital. While at the same time offering a parallel path for the more advanced users who want the latest and greatest.

grant_k

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#216398 20-May-2009 17:05

riahon: I would say that the average wage in Samoa is significantly less than those here so what appears cheap to your wallet might not be so for the locals.

Agreed. But the fact that Digicel have been in operation for almost 3 years in Samoa probably demonstrates that their business is profitable.

If Digicel can operate profitably in a much lower-waged economy than ours, why can't Telecom or Vodafone operate a profitable business in this segment of the market in NZ, given that the number of available customers are huge by comparison to Samoa?

steveonz

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#216404 20-May-2009 17:25

This is my point. 2D has a huge market out there, the people who just want to call or text. I use 3G sometimes, only for my Gmail but it doesnt need to be blazing fast, just covenant.

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eXDee

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#216407 20-May-2009 17:38

I think just the fact that they are roaming on vodafones network (at launch anyway) will prevent their prices being in a league of their own.

ajw

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#216440 20-May-2009 19:39

Digicel even have a GSM network in Haiti. Isn't it amazing how these mobile operators can still make a good profit in third world countries.

Check out these links.

http://digicelgroup.com/

http://www.digicelgroup.com/en/media-center/broadcasts/youtube-haitis-cellular-revolution

sbiddle

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#216455 20-May-2009 20:23

I think the irony of the 1s billing is the fact Telecom introduced it in the first place! BellSouth had per second after the 1st min and Vodafone did also but with Telecom's introduction of per min rounding Vodafone followed..

Great to see this being dumped. My only hope would be per second billing on included minutes - it's a total sham that included minutes may only be worth 50% of their total due to rounding also.

neverland

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#223225 9-Jun-2009 17:11

I have recently returned from 5 months in africa where I travelled from cape town to nairobi, there is serious mobile competition in most south and east african countries and africans are adopting mobile technology very very fast. I bought a total of 2 sim cards the whole trip which cost about $5NZ and had about $4NZ credit included, TXTing cost me about NZ 5c per txt and calling was anything from 10-30c per minute depending on a lot of factors, mostly purchasing larger amounts of credit at a time makes it cheaper similar to XT bonus credit. I also bought a cheapo nokia handset for about $40NZ when mine died. I realise the cost of maintaining a network in a lower social-economic environment is lower but all the evidence suggests that the mobile companies in these countries are profiting in a big way.
I realise vodafone and telecom are there to make a profit but it's still surprising that the cost of owning cell phone in NZ hasn't really changed in 10 or so years. Maybe 2Degrees will help change that or at the least prove the other 2 companies prices are justified.