NZ mobile market flowers thanks to competition

Bill Bennett -

Suddenly New Zealand’s mobile market is competitive.

The two largest carriers, Vodafone and Telecom NZ now fight on products and services. Barely a week passes without something new added to the mix.

Today Vodafone launched HD voice. Earlier in the week it began selling Microsoft Office 365 and the new iPad Air. The company adds new sites to its established 4G network on an almost weekly basis.

Telecom NZ is just as busy. The company is days away from a 4G launch. Telecom NZ continues to build on its nationwide Wi-Fi hotspot network. I understand Vodafone has an innovative response waiting in the wings. All the carriers are playing with mobile payment technologies.

Perhaps the most interesting thing is that all this extra stuff comes at little extra cost. Telecom NZ isn’t charging customers more for Wi-Fi hotspots or 4G. Vodafone charged $10 for a while, but now wraps 4G into its plans.

This year you get a lot more for your mobile dollar than you did a year ago.

Let’s not forget 2degrees. New Zealand’s third mobile carrier possibly already has more customers than Telecom NZ. It is positioned as the low-cost alternative. If 2degrees does nothing else, it puts price pressure on Vodafone and Telecom NZ.

But it does do something else. Something important. While 2degrees is playing catch-up in areas like 4G, it has been innovative in finding new ways to sell wireless services. The company’s carryover plans and ability to share data between accounts have helped reshape the market.

Mobile market flowering

So why is the mobile market flowering now? The arrival of a third carrier in the shape of 2degrees made much of the difference. Once it reached critical mass, Vodafone and Telecom NZ had to lift their games. All New Zealand mobile customers owe 2degrees founder Tex Edwards a debt for making that possible.

Regulatory changed helped too. The mobile termination rate decision was important. Among other things, it made mobile charges more transparent and flattened the playing field. And number portability also plays a role.  When it’s easier for customers to switch networks, carriers have to work harder to keep their business.

It’s late 2013 and we’re seeing something of a golden age in New Zealand mobile telephony. It doesn’t look like slowing down any time soon. The wider spread of 4G and the launch of 700 MHz services will keep the momentum going.