How 2 Degrees Shapes Up against Vodafone and Telecom (Comparison matrix enclosed)

Forums › 2degrees (including Slingshot, Orcon, Flip, Stuff Fibre, MyRepublic, 2talk and Vocus) › How 2 Degrees Shapes Up against Vodafone and Telecom (Comparison matrix enclosed)

ahmad

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#38786 4-Aug-2009 12:11

I've created a comparison table of our 3 mobile networks' prepaid plans and the good guys over at iPhonewzealand are kindly hosting it and will be putting up an article soon about it.

You can download the PDF table from their website:

http://www.iphonewzealand.co.nz/2009/all/prepay-comparison-table/

The table reflects available discounts where possible, so for XT, there are 2 columns which take into account the topup bonuses on that network. And there are also 2 columns for 2 Degrees, because not everyone is going to be able to take full advantage of the "Magic" pricing of 22c to 022 mobiles and landlines. There is quite a heavy requirement of a $20 topup every 30 days to always enjoy these rates, so anyone using less than $240 per year on their mobile will only have partial access to these discounts (Magic rates then only apply within 30 days after a topup).

Comments or corrections welcome. I have deliberately refrained from highlighting which network is "better" for each particular attribute (eg. calls/txts/data) because the networks are so different in their offers (great!) and individual circumstances will dictate which plan is best for you.

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#242309 4-Aug-2009 12:21

I think your 'magic' pricing might be incorrect. As far as I can see, the magivctop up only gets you cheaper on-net and landline calls, as well as free texts. Yet you have reduced the price of off-net calling and casual data under the magic columns. That pricing does not change. If you have reduced it because of the $9 "value" that you get with a top up, then that is a bit fallacious too. Hypothetically if 2D charged, say, $1 per text, then accroding to the way you calculated the table the 100 free texts would therefore give you $100 of value, providing major discounts on calling, data etc, yet that makes no sense.

Also, PXT pricing and voicemail has been disclosed on the 2D website
see here: http://www.2degreesmobile.co.nz/prices-on-a-page
50c per MMS anywhere in the world, and 20c per voicemail retrieveal

nice table otherwise. good work.

One thign it illustrates very well is the relative simplicity of 2D pricing.

ahmad

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#242311 4-Aug-2009 12:29

Hi, it is "$9 value" because that is what 100 SMS on 2 degrees costs.

"Magic pricing" presumes:

You use all 100 TXTs and go on to pay 9c/SMS
You top up at least every 30 days

If this happens, then you effectively get $29 to spend on 2 Degrees for every $20 topup.

Which is effectively a 31% discount if you average it across the usage.

What I've done is apply that 31% to the published rates to "average out" the 100 free TXTs so that you can get a better idea of the "true cost" of what you are using (for the sake of comparison).

NonprayingMantis

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#242319 4-Aug-2009 12:44

yeah, I undertsand that, I just don't buy the argument for doing it.

The value of 100 free txts is not simply 100 x the price of 1 TXT.

The argument does not make logical sense. If it did, you could equally apply it to this scenario:

Top up with $20 of XT. not only do you get $5 bonus credit, but Telecom gives 1500 TXTS for $18. At the price they normally charge, (20c) that means you are getting a whopping $300 of value (20c x 1500) for $18 of your $25 credit. $300 of 'value' and $7 of credit left over to spend on other stuff.
According to the way you calculate your discount, if you take that offer, then you effecitvely have $307 to spend for every $20 top up. That is a 94% discount!! Average that discount over the calling rates etc and suddenly the calling rates become miniscule.

See?

Try this too:

Imagine if 2D actually charged $1 per txt and gave away 100 txts with each topup. Does that mean you are all of a sudden getting $100 of extra value with your $20 top up? Of course not. If it did, then your 'effective' calling rate as you calculated it would be tiny.

nakedmolerat

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#242321 4-Aug-2009 12:50

heya, i dont quite understand the $0.35/mb data? how do u come out with that?

bjhoogs

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#242337 4-Aug-2009 13:10

One thing this discussion shows is just how difficult it is to compare the value of magic pricing to XT. 2 Degrees haven't made things simpler, just complicated them in a different way.

Predicting your usage in advance is now more important than ever, not only in selecting your plan but in chosing a network provider.
(which is good, I'm all for the consumer having a variety of options, just makes it hard to compare apples with apples)

ahmad

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#242394 4-Aug-2009 15:04

NonPrayingMantis, no I'm not using the Vodafone logic of saying "we are giving users $1000s worth of data".

<<Edit - I have put a more logical response 2 posts below this one>>

ahmad

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#242396 4-Aug-2009 15:05

bjhoogs: One thing this discussion shows is just how difficult it is to compare the value of magic pricing to XT. 2 Degrees haven't made things simpler, just complicated them in a different way.

Predicting your usage in advance is now more important than ever, not only in selecting your plan but in chosing a network provider.
(which is good, I'm all for the consumer having a variety of options, just makes it hard to compare apples with apples)

It's complicated but DOESN'T HAVE to be.

They have their pricing on 1 page if you want it.

You don't have to think about 22c/call within 30 days of a topup. Just think of it as 44c/min 9/TXT and anything cheaper is a bonus.

You only have to analyse it if you are a geek!!

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ahmad

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#242401 4-Aug-2009 15:17

NonprayingMantis: yeah, I undertsand that, I just don't buy the argument for doing it.

The value of 100 free txts is not simply 100 x the price of 1 TXT.

The argument does not make logical sense. If it did, you could equally apply it to this scenario:

Top up with $20 of XT. not only do you get $5 bonus credit, but Telecom gives 1500 TXTS for $18. At the price they normally charge, (20c) that means you are getting a whopping $300 of value (20c x 1500) for $18 of your $25 credit. $300 of 'value' and $7 of credit left over to spend on other stuff.

That is a 94% discount!!

You are missing the point.

Let's take an extreme A-typical user on 2 degrees that ONLY TXTs.

He tops up $20 and gets 100 free TXTs. At 9c/TXT he can send 222 TXTs for his $20. Add the 100 free, and he has just sent 322 TXTs for $20.

His EFFECTIVE TXT cost is 6.2c

That is the reasoning behind the prices in the Magic table, and apply to anyone that:

a) Will use up the full bonus TXT allocation,
and b) Tops up at least $20 every 30 days.

It is just a way to make a fair comparison between the effective cost for casual calls and SMS across the networks.

TXT bundles obviously offer better value so you will need to decide your network based on your own usage patterns.

BarTender

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#242438 4-Aug-2009 15:50

One thing you should include is website useability.

2Deg - 10
Voda - 2 (Hey I am being nice)
Tnz - 4

Just got my $2 2Deg sim, logged into the web site, changed my number to a cooler one, all very easy and a FAST website. In comparison to VF it was a painless experience.

nate

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#242458 4-Aug-2009 16:02

BarTender: One thing you should include is website useability.

One benefit they have is concentrating on their core market. They only do mobile, so their systems are just setup to cater for that.

Vodafone/Telecom have to account for broadband, business lines, home lines etc so their systems will be vastly more complex than that of 2degrees.

NonprayingMantis

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#242474 4-Aug-2009 16:20

ahmad:
NonprayingMantis: yeah, I undertsand that, I just don't buy the argument for doing it.

The value of 100 free txts is not simply 100 x the price of 1 TXT.

The argument does not make logical sense. If it did, you could equally apply it to this scenario:

Top up with $20 of XT. not only do you get $5 bonus credit, but Telecom gives 1500 TXTS for $18. At the price they normally charge, (20c) that means you are getting a whopping $300 of value (20c x 1500) for $18 of your $25 credit. $300 of 'value' and $7 of credit left over to spend on other stuff.

That is a 94% discount!!

You are missing the point.

Let's take an extreme A-typical user on 2 degrees that ONLY TXTs.

He tops up $20 and gets 100 free TXTs. At 9c/TXT he can send 222 TXTs for his $20. Add the 100 free, and he has just sent 322 TXTs for $20.

His EFFECTIVE TXT cost is 6.2c

That is the reasoning behind the prices in the Magic table, and apply to anyone that:

a) Will use up the full bonus TXT allocation,
and b) Tops up at least $20 every 30 days.

It is just a way to make a fair comparison between the effective cost for casual calls and SMS across the networks.

TXT bundles obviously offer better value so you will need to decide your network based on your own usage patterns.

correct, for users who only TXT. I wasn't disputing the savings on TXTs, only on the calls and data that don't get discounted. You are discounting everything, when it is only TXTs that are bing given away (and onnet and landline calls discounted).

If you are doing a column for the magic topup where you discount the price of everything, despite it only being TXTs that are free, then you should also do one for the various bolt ons that Xt and voda do, As I gave in the example above, it would make 'effecitve' calling rates look miniscule because you are getting a 94% discount by your logic of counting all the free items at full value.

Heck, with some of the voda plans you get a free best mate. The price of that is $6, but because you get unlimited (fair usage) minutes to that number which normally cost 89c, your logic of discounting every aspect of the plan, even unrelated to the bolt on, states that because you are getting thousands of dollars of 'value' from the plan in total, then the discount overall is nealry 100%, and so the 'effective calling price' to any network is less than 1c. This is patently absurd, and why your logic is wrong.

ahmad

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#242493 4-Aug-2009 16:36

Ok, because you asked for it, now we look at User B, who only calls but uses all 100 free TXTs:

$20 topup gets 100 Free TXTs

Makes only on-net calls (for ease of calculation, does not affect the outcome). For $20 this user receives:

91 call minutes and 100 TXTs for $20

To make 91 call minutes and send 100 TXTs on 2 degrees would normally cost $29, but he has paid only $20 for this. ie. He received an AVERAGE 31% discount on PUBLISHED 2 Degrees rates.

Therefore the EFFECTIVE rate for calls is 31% off the 22c (ie. 15c), and the effective rate for each SMS sent is 6.2c.

I can keep coming up with examples to prove the rationale but you are focused on something completely different.

BestMates and TXT bundles are already covered for in the table, and the point is already made clear that if you have usage patterns where these give you value, you will be better off.

This is simply a comparison between retail rates of the networks. Unless the topup bonus is averaged out, you cannot easily compare the networks when it comes to cost of calls and txts (retail, not packaged). I don't have to consider packages because it becomes impossible to calculate, and we already know it will find favour with heavy users).

NonprayingMantis

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#242508 4-Aug-2009 17:12

ok, now do the calculation as I suggested, using the same logic. Imagine now the 2D TXT price was $1 per text (for the sake of argument).

A user tops up $20 and gets 100 free texts and makes 91 calling minutes (as per your example)

To make 91 calling minutes and send 100 texts would normally cost $120, but he has only paid $20 for it. He recieved an AVERAGE 83% discount on PUBLISHED 2 Degrees rates.

Therefore the EFFECTIVE rate for calls is 83% off the 22c (ie. 3.7c/m), and the effective rate for each SMS sent is 17c.

See, he has actually made the same pattern of usage, but because something he didn't even use ($1 TXts) was priced arbitrarily high (the 'normal' price is irrelevant to him remember because he does not pay for a single TXT), your logic dictates that the value of it must still be counted at that high price, and therefore show an artifically low effctive calling rate (3.7c/min) that bears no relationship to reality.

What I am trying to explain is that using your logic 2D making the pricing of their TXTs worse (higher) makes his effecitve calling rate cheaper. of course the reverse is also true. If 2D had priced the TXTs at 1c, then the 'effective' calling rate would barely change, which seems silly. An improvement in pricing making pricing for something unrelated go the opposite direction.

I don;t think you understand what I am trying to explain (because I have tried three times :P ).
Maybe I am just a poor comunicator, but I think we are just going to have to agree to disagree on this one.

What would be really cool, if you feel like creating it (I'm far too laazy ), is a comparison sheet that shows relative spending for differnet types of customer on the various networks.
e.g. what is the best value netowok for a customer if they use A on-net calling minutes, B off-net calling, send C TXTs and use D MB of data per month, with ABC and D as vairiables you can change.

ahmad

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#242535 4-Aug-2009 17:40

There are far too many variables for a 2 dimensional spreadsheet to cover. Make your own decision based on the data.

You seem to miss the point of this comparison because the example *still works* at $1 per SMS as you outlined above.

I have made the assumption that those TXTs would be used (and state this above - "User B, who only calls but uses all 100 free TXTs").

So yes you can average this out as voice calls for 3.7c per min and 17c per SMS, if you wish to. You are right that these levels are arbitrary, but not THAT arbitrary - they are the pricing ratios that 2 degrees have set (44:9).

ockel

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#242565 4-Aug-2009 18:12

You could use either the Teligen "calling baskets" that the Commerce Commission uses to benchmark where NZ sits in the OECD rankings for costs.

Or you could use some of the Commerce Commissions data to reflect the average NZ user.
Or as NonPrayingMantis points out create a synthetic customer profile to reflect different users. That way people can compare which network is most appropriate for themselves.

FYI the average outgoing minutes (mobile to mobile/fixed) for 2008 in NZ was 668 minutes (per annum).
The volume of on-net and off-net is deemed commercially sensitive but "in excess of 80%" on-net has been quoted.

In addition the proportion of on-net SMS appears to be "greater than 90%" however volume data is difficult to come by. Growth has been ~25-30%pa for both operators so if someone remembers what the total volume of SMS was in 2006 or before then one could work out the average SMS sent per subscriber.

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