2degrees tips toe in power market

2degrees has begun selling power and broadband bundles to new customers signing up for internet services. The company says it will launch a full entry into the electricity retail market next year.

While power is new to the 2degrees brand, it is not new to the wider company. Vocus offered power to broadband customers before the company merged with 2degrees earlier this year.

Vocus acquired a small power company, Switch Utilities in late 2016 and started by selling broadband and power bundles to Slingshot customers. It then extended the offer to its other brands including Orcon. For a while after the Switch acquisition Vocus was the nation’s fasted growing power retailer.

When Vocus and 2degrees merged, the ability to extend the sale of bundles of power and broadband was seen as one of the early growth opportunities for the combined business. Trustpower and Contact Energy had both made significant inroads into the broadband sector by adding internet services to their power offerings.

From a retailer point of view selling power has two advantages: combined billing means more revenue per customer and higher margins; while customers who purchase more than one service tend to be “sticky”. That is, they are less inclined to churn.

A business like 2degrees would have a prior relationship with tens of thousands of consumers who could be responsive to a competitive power offer.

2degrees CEO Mark Callandar says there is the potential to do more to breath competition into the power sector, but before that can happen the regulatory landscape needs a revamp.

He says; “We have the expertise, scale and brand awareness to shake things up in the electricity market. But while there are similarities between electricity and telecommunications, bringing real competition to electricity may be an even greater challenge. You have four vertically integrated players who dominate and regulatory and market constructs that act as barriers to innovation and competition in this sector.”

He compares this with the telecommunications sector where structural separation and regulated fibre products level the playing field. This has increased customer choice while driving down costs. It meant better services for everyday customers.

He says: “At launch we have a good offer. It’s competitively priced, and we haven’t got multiple rate cards that we use to cross-subsidise our broadband plans like some of the bundled power providers cheekily do.

“The next challenge for us is to bring interesting offers that make power pricing fairer for Kiwis."

Spark: digital can slash NZ emissions

Spark has released research showing the role that digital technology can play in reducing greenhouse gas emissions.

The report: Meeting the climate challenge through digital technology from Spark and Thinkstep-ANZ, a sustainability company, says digital technology can help reduce 7.2 million tonnes of emissions by 2030. This is an around 40 per cent of the 17 million tonnes New Zealand aims to reduce by that date.

Spark CEO Jolie Hodson say the report is the first attempt to quantify the potential for digital technologies to enable emissions reductions based on New Zealand’s unique emissions profile.

She says: “We know digital technology can enable cross-sector transformation, but as a country we have not yet been deliberate in exploring the full extent of how these technologies can be applied to emissions reduction, which means the role of technology is not prominent in our climate change planning.

“Our aim in undertaking this research is to guide action – in our own business and sector, and in other businesses and sectors – that will support Aotearoa’s transition to a low carbon and climate resilient future.”

A report based on the research includes recommendations for government as well as the business and digital technology sectors. Hodson said all stakeholders have a role to play in achieving the emission targets.

She says: “From a national policy perspective, we believe digital technology should be integrated into sector strategies within the next Emissions Reduction Plan, that digital infrastructure risks should be incorporated into risk assessments and adaptation plans, and that digital equity should be included in the Just Transition plan."

InternetNZ moves registry infrastructure

InternetNZ has moved the systems for registering .nz domains to CIRA, the infrastructure behind Canada’s .ca domain name. The same infrastructure is used by Ireland for .ie domain names.

Tim Johnson, InternetNZ’s general manager for customer and product says: “The new registry empowers .nz registrars with more self-service capability and reduces technical barriers for new registrars. We also included a lot of new security controls in the system, responding to the challenges of constantly changing threats. The service will be easier to maintain, update, and operate over the long term.”

NZ Compare names award shortlist

NZ compare has named the finalists for the 2022 Compare Awards. 2degrees, Ultimate Broadband and Wireless Nation make up the shortlist for the Best Wireless Service Provider award. The Best Fibre Broadband provider is now down to MyRepublic, Nova Energy, Now and Orcon. The Best Rural Service Provider finalists are 2degrees, Farmside, Lightwire, Ultimate Broadband and Woi Internet.

Finalists for the Best Business Broadband Provider are 2degrees, Now, Vodafone and Voyager Internet.

You can find a full list of finalists at https://awards.nzcompare.com/#finalists

Smartphone market down 12% year-on-year

Counterpoint Research says the worldwide smartphone market was down 12 per cent year-on-year in the third quarter of 2022. At 301 million units shipped, that puts it back at same level as 2014.

The research company says the Russian invasion of Ukraine and tension between the US and China are partly responsible for poor sales. It also pins blame on “inflationary pressures, growing fear of recession, and weakening national currencies”. All these mean consumers are less confident.

Counterpoint also notes the lengthening replacement cycle as phones become more durable and the lack of exciting new technologies.

Apple was the only significant phone brand to show any growth with shipments up 2 per cent year on year. That performance increased the company’s market share to 16 per cent. Apple is the second largest phone brand in terms of units shipped, although the largest when measured by sales revenue.

Samsung continues to lead the market in unit numbers, shipping 64 million units in the third quarter. That’s 8 per cent down on the same period a year earlier.

PlayStation VR2 due for February launch

Sony has earmarked February 22 for the launch of its virtual reality headset for the Playstation 5 game console. The NZ$1000 PS VR2 includes the headset, Sense controllers and stereo headphones. A bundle with the Horizon Call of the Mountain game will go on sale here at NZ$1090. A separate NZ$90 charging station allows customers to charge the Sense controller without using one of the Playstation’s USB ports.

Public Cloud user spend will close on US$600 billion net year

Gartner has revised up its forecast on end-user public cloud spending. It says spending on public cloud services will grow 20 per cent to reach US$592 billion next year. That’s up from US$490 billion this year.

The research company says inflation is having a push and pull effect on cloud spending. Cloud continues to be important for growth in uncertain times because of its “agile, elastic and scaleable” nature. At the same time, cloud is now the largest component of company IT budgets which are under pressure and could be trimmed.

Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2023 at 29.8 per cent.

Comment: Do Leos mean we no longer need rural broadband subsidies?

Yesterday’s CommsDay reports on Vocus arguing that low earth orbit satellites should change thinking about rural telecoms subsidies.

Vocus was talking about Australia, but the logic applies to New Zealand.

The telco suggests taxpayers, carriers and telco customers pay for unnecessary duplicate services in remote areas.

It’s a debate New Zealand needs to have.

While there is a strong argument to build fibre deeper into regional New Zealand, it could be time to revisit the idea of subsidising rural fixed wireless networks. The better rural fixed wireless services deliver an OK user experience. But rural fixed wireless services are not all the same. In places, rural users put up with slow, congested and unreliable connections.

In these places Leos massively outperform fixed wireless, albeit at a higher cost.

For now, Starlink is the only practical Leo service.

It costs around $1000 upfront for a reciever and $160 a month for a service which can run as high as 300 mbps. Despite being more expensive than fixed wireless that’s a better deal for rural business users or anyone who demands higher speeds.

You could make a case that we should not put all our rural communications eggs in one basket. Moreover, the Starlink basket is controlled by a foreign business that has little stake in New Zealand’s economy. Let’s not forget Starlink has raised prices elsewhere and could do the same here at any moment. Prices could double without warning.

Things will change when other Leos come online. Three more are planned. At least two look like becoming reality.

If there’s a vibrant, competitive satellite broadband market, then the money spent subsidising poor quality rural fixed wireless could be better spent elsewhere.

Overseas evidence shows rural users want the same services and prices as urban users. There’s no reason to suspect rural New Zealanders would be any different. If we are going to invest public money into improving rural broadband, the obvious answer is to spend it extending the UFB footprint.

In other news….

Writing at Stuff, Tom Pullar-Strecker reports that Vodafone has further delayed closing its Vodafone TV service. The move will give Sky more time to get its new Sky Box out to the market.

Dell’Oro Group says the worldwide edge datacenter market will be worth US$14 billion by 2026.

A study from Surfshark says internet access is 83 per cent less affordable in Africa than in Oceania. Only 55 per cent of Africans have any internet access and where there is access it is far slower than in other parts of the world.

MYOB has a study that shows the economy would benefit by NZ$8.5 billion a year if small businesses could get their digitisation act together. The benefits of small business digitisation are clear, for every dollar invested, there is a return of between $2.4 and $3.1.

ABI Research says it will soon be possible to build a public safety network using 5G mobile services.

The Commerce Commission has give the News Publishers’ Association permission to collectively bargain with Meta and Google for ten years. It means the nation’s publishers will have more clout in any negotiations with the tech giants.

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