New Zealanders pay more for mobile data - Commerce Commission study

2degrees' Mat Bolland: Those who make the most calls have yet to benefit from competition
Tuanz boss Brislen: "Vying with Mexico for last place is not what we would hope for"

A typical 1.5GB per month plan for mobile data for laptops and tablets, was about 10% above average, says a new Commerce Commission report, whnich compares NZ mobile pricing to other OECD countries over the past year.

The NZ price for a 6GB data plan was one of the highest in the survey, about twice the average.

"The $98 per month price in New Zealand suggests that mobile broadband is not at present a strong competitor for fixed line broadband, the regulator notes." Mid-price landline broadband plans now typically come with 60GB or 80GB of data.

"Paying twice the average for 6GB of data is just not acceptable in this day and age and the telcos need to keep up with customer demand. Vying with Mexico for last place is not what we would hope for in our telecommunications market in 2014," Telecommunications Users Association (Tuanz) CEO Paul Brislen tells NBR.

Overall, however, the ComCom was reasonably happy with where NZ sat.

"Prices have been steadily dropping and popular plans are below OECD averages," said Telecommunications Commissioner Dr Stephen Gale. 

“The price in New Zealand for the plan with average calling and data use was 40% below the OECD average. Prices for all usage plans have dropped significantly, between 25% and 70%, over the last three years but prices for plans with high call volumes have stayed persistently above average which is potentially a result of high volume users being less price sensitive,” said Dr Gale.

On balance, Tuanz boss Brislen is happy, too.

"It's great to see the benefits of competition in the market place. After years of a cosy duopoly and New Zealand customers pay too much for voice calls and TXTs, the arrival of 2degrees has delivered great results for users.

"That's not to say there isn't more that can be done, and clearly as the world moves towards a data-centric mobile requirement, it's important the New Zealand mobile telcos continue to compete vigorously," he says.

"Tuanz is concerned about the lack of enthusiasm for MVNOs in New Zealand. Internationally, competition from MVNOs such as Virgin Mobile, Tesco and others have kept network operators on their toes, yet in New Zealand there are no prepay MVNOs and those on account offerings are not well promoted. We would like to see more MVNO competition especially in the prepay market."

MVNOs, or mobile virtual network operators, rebadge a wholesale service provided by a mobile network operator. TelstraClear operated an MVNO service, fed by Vodafone, before its takeover, gaining a modest 50,000 customer. Black+White made a brief, colourful splash, as an MVNO. And CallPlus and Orcon also operate low-profile MVNO services.

During his recent Ask Me Anything session with NBR readers, Telecom CEO Simon Moutter said data caps were rising, but noted telcos had to recoup the hundreds of millions spent upgrading mobile networks to 3G and now 4G. And telcos argue that with a small population spread out over a relatively large, geographically challenging area, mobile networks are always going ot be more expensive to build here.

Those who make most calls not benefitting - 2degrees
2degrees director of corporate affairs & wholesale Mat Bolland said while the study showed increased competition in the lower usage prepay mobile market has delivered better pricing, those who make the most calls have yet to benefit from competition.

“This international report shows mobile competition is very different for prepay, post pay and business users. We believe reporting on each market, along with a look at the barriers to competition in those markets, will provide a more accurate picture of what’s happening in mobile,” says Mr Bolland.

“Past reports have painted an unduly rosy view of mobile competition. With a review of the Telecommunications Act ahead of us it’s important political decisions makers have all the facts when understanding why high usage mobile customers aren’t getting a great deal."

The Commission’s comment that high volume mobile users may not be price sensitive is at odds with 2degrees’ experience, Mr Bolland said.

“In our experience, price is always a factor for high usage mobile customers, but we’re seeing a number of customers held back from taking the best deals in the market. A thorough analysis of the three mobile markets is timely.”

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