Flip reborn as low-cost broadband brand

Last week Vocus moved customers off its Flip brand. It grandfathered the existing plans and prices.

This week it rebooted Flip as the Vocus Group’s low-cost broadband option for less well-heeled New Zealanders.

Flip has a single plan. The brand’s chief executive Taryn Hamilton says that’s to keep things simple and minimise operational costs.

One plan to rule them all

For $15 a week, a customer will get a fibre line running at 50mbps in Chorus areas or 30mbps in other fibre areas. This comes with unlimited data. There are no contracts but there is a $30 set-up fee. Customers can opt to pay weekly or fortnightly.

The price and the pay weekly or fortnightly approach goes a long way to reach across the digital divide. At the same time it makes a great option for students living away from the family home or for families wanting a connection at the bach.

Low cost Flip

Flip’s $15 a week price makes it one of the cheapest fibre broadband deals on the market. Contact Energy offers a $60 a month plan, slightly cheaper than Flip which works out at about $67 a month. But to get the Contact price, you must buy electricity from that company.

One way Flip keeps down costs is that it assumes customers have their own wireless router. The company does not send out new ones when a customer signs up.

If a customer doesn’t have their own wireless router, Flip has a stock of suitable refurbished and will courier one out for a flat $25.

Given that the regulated wholesale price of a 100 mbps fibre line is $47.15, Flip is, to put it mildly, a low margin operation. And given that the low cost service is likely to attract business from less well-off consumers, there is a high risk of default. The shorter billing cycle should help there, if a Flip customer misses a payment, there won’t be much of a debt to worry about.

Hamilton says customers who drop out will be welcomed back, but they will have to pay the $30 set-up fee again