For many years New Zealand mobile customers were caught between a rock and hard place, under what was considered a mobile telecommunications duopoly between Vodafone and Telecom.
The lack of competition meant prices barely budged as the two corporate giants remained unchallenged, and consumers were left with little choice.
However, in recent years, a new kid has joined the block – 2degrees – and is doing what it can to give the market a little shake-up.
We talk to the 2degrees business chief sales officer, Mike Cleary, about just how 2degrees had broken into the market.
What challenges have you faced entering New Zealand’s telecommunications duopoly?
“We have been open to challenges coming into the market, which has been dominated by Telecom and Vodafone. People have traditionally been tied into long-term plans which prohibited them from changing over; moving to us in the middle of the plan was costly. The freedom of movement was seen more readily in the prepaid and consumer markets.
“But we assist with payback periods if customers want to make the savings by going over to 2degrees. 2degrees is prepared to assist customers in this regard and help them make the change.”
Starting out with 2degrees business, what was your vision for it?
“We took the time to build up the business side. 2degrees has been in the market for three years now, but we took the time to deliberately develop the business side. It took two years.
“Since we launched we have been trying to connect with businesses to offer them a compelling preposition that is fantastic value, with excellent customer service based in New Zealand and a solid network.
“These are three key factors that people want. We believe we have delivered.”
What kind of innovative strategies have you put in place?
“We believe if you pay, you should get the full benefit. For example we have what is called ‘Carry over minutes’; it’s the one thing we have over our competitors. People pay for a plan with a certain amount of minutes, but our competitors take these away at the end of the month. We don’t; we allow customers to carry them over. People can then build a stockpile of minutes. It is a hell of a lot fairer.
“Shared data is another business innovation unique to 2degrees. Businesses are now more mobile centric, looking to increase productivity. They often have mobiles and tablets; 2 degrees shared data can be shared across employees or devices. Separate plans are not needed as the data can be shared with up to five employees or devices.
“There is also the $149 plan, which lets you talk as much as you like without having to worry about the cost. Customers with other competitors can pay $300 one month, $400 the next, $200 the next – it jumps all over the show. With this plan you know. People are buying certainty. It revolutionises the way business users use phones.”
How has the recession impacted the growth of 2degrees?
“Lots of businesses are struggling, but we go in and offer a good deal. We offer a high quality product at a reduced price – New Zealanders have given our entry into the market a warm reception. We are the new kid on the block between Telecom and Vodafone; we are turning the market on its head and people like it and get it.
“While some businesses are certainly struggling we can decrease cost and boost productivity.
“Growth has been phenomenal over the past year. Thousands have connected to 2degrees, from one man bands, to small-to-medium sized enterprises and large corporates. It has also just been listed by the New Zealand Government as one of its approved suppliers.
“We have gone past one million customers in three years.”
Why do you think people have been drawn to you?
“People on 2degrees get a good deal; we decrease the amount of jargon and red tape and we keep it simple and transparent. We are a reliable network and we are a brand that has resonated with New Zealanders.”
What potential savings can customers make by going over to 2degrees?
“Businesses can make huge savings, it is hard to give it a dollar figure, but our analysis has shown that companies on average see a 25 percent value on savings.”
Where does your coverage extend to?
“We cover up to 97 percent of the population – we don’t reach the more isolated areas, but we are on par with Vodafone.”
What about broadband? Why is it more expensive out of main centres?
“Our broadband is reliant on where our network towers are. Because we have an agreement with Vodafone in other areas where we have use of their towers, we are not able to offer as good pricing in some areas. But as we increase our infrastructure we will increase this offering to others.”
Where to for the future?
“We want to do more of the same; we are delighted with our progress to date.”