Telecom vs Telecom as new mobile price war breaks out

New Telecom Skinny boss Paul Taylor


Chris Keall

Telecom's mobile market share loss is customers' gain with a new mobile price war breaking out.

Last week I mused that Telecom's budget brand, Skinny, was being marginalised as its parent introduced the Telecom Big Value Pack, which costs $19 a month (for 60 voice minutes, 5000 texts and 500MB of data).

Telecom is lookiing to win back share in the pre-pay market after losing another 32,000 customers in that area in its most recently reported half year, to June 30 (that is, before it's big "mobile reset" to 1.57 million customers caused by the fact only 68,000 of its 640,000 remaining CDMA customers migrated to XT between February and its July 31 shutdown).

This week, Skinny has hit back with $4-a-week plan that provides 60 calling calling minutes, 60MB of data and 60 txts.

2degrees waded late last week with its own $19 pre-play plans, including one that's a close mirror of Telecom's with 60 voice minutes, 5000 texts and 500MB of data

And now Vodafone's just refreshed its own $19 pre-play plan to offer the same.

At the other end of the market, it's great to see Telecom offering a rebate of $1000 or more for those who sign to a 24-month contract plan (see Previously, Telecom has offered an $800 rebate to lure big-spending smartphone users.

Don't get too excited about that figure until you see the size of the break-fee from your current provider - and of course do play telcos off against each other and give your incumbent phone company a chance to sharpen its pricing to keep your business.

Good times.

 New Telecom plans stray into Skinny territory

Wed Aug 22: Last night, Telecom revealed a new cellphone plan (see release below) that seems to stray firmly into the budget territory occupied by its troubled Skinny brand.

Skinny boss Paul Taylor disagreed with NBR's analysis. Mr Taylor was head of mobile marketing for Telecom before moving across to head fully-owned subsidiary Skinny in July.

He told NBR he was fully aware of the new "Big Value Pack" plan; he was still on Telecom's team when it was developed.

He said this morning that the new plan was "a value play. But two thirds of the New Zealand market is value." (The other third is on contract plans).

Mr Taylor said the $19-a-month Big Value Pack price point was aimed at 2degrees and Vodafone.

Skinny, by contrast, still as the youth budget market in its sights with its $4-a-week deals.

$4 a week, of course, adds up neigh on $19 a month.

But Mr Taylor says youth "get paid week, and live weekly."

Telecom's value plan, by contast, would appeal to couples and families who think monthly.

Beyond it's pay-weekly option, Mr Taylor said Skinny was the only mobile brand offering a $5 top up; a "call me back" feature for people out of credit who still wanted to reach their friends; and the option to transfer $10 phone credit to a broke friend.

The Skinny boss told NBR "the tide is turning" in terms of brand perception and social media feedback, but declined to give any sales numbers (Telecom has promised commentary on Skinny at its half-year result on Friday).

Skinny, launched in January, has recently seen a change at the top, abrupt changes in the tone of its advertising and the resignation of its patron, Telecom Retail chief executive Alan Gourdie amid rumours of slow sales.

The new plan will be heavily promoted over the next month, the company says.

All eyes will be on Telecom's full-year result, Friday morning, when it has promised to reveal Skinny's numbers.

Telecom is still on the backfoot in mobile. At its last half-year update, in February, the carrier said it had lost a net 180,000 mobile customers.

2degrees recently claimed 1 million mobile customers.


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13 Comments & Questions

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Telecom for some reason has never been great at creating a youth sub-brand - and there have been several (i used to work there).

Instead of trying to go for a "we are hip" - "we get it" - "here's some pictures of people on skateboards skating past street art" vibe...

They should go for a smart - youthful - business hip sub-brand - kids who want to own their own business.... young entrepreneur's etc... would fit better with the Telecom brand.


Can you link me the pictures of "people from skinny on skateboards skating past street art?" - that sounds like a sweet picture!


I love Skinny


Won't this entice people off of the lower value pay monthly plans and back on to prepaid?Previously Telecom have been enticing people onto plans by offering them the better deals to get more long term customers while this seems to be going in the opposite direction.


2degrees will soon start losing customers including me over charging my credit card and never returning my emails to get a refund. Lucky my bank is on to it. I think they have not grown the staff levels to service all the new customers they now have as when I joined when they launched they did a great job but I guess this is what most big companies end up like.


Does anyone else on 2Degrees have their bill arrive as a pdf that can't be opened? And then have the 2Degrees call centre tell them there must be something wrong with their computer? Yeah right ... no problems opening any other pdfs, 2 Degrees! Everything else about your plans is :)


I've never been able to open any bills from 2 Degrees. Won't be getting them for much longer, I'll switch to prepaid to take advantage of the better deals for sure...


Skinny still has better deals. Do the math on voice plans.


You will find that they don't. The majority of mobile users do not use their allowance in a liner manner and will find that some weeks they are paying for services that they won't use. In many cases skinny customers actually pay more than they used to.


Skinny have the World's Worst TV adverts - without a doubt!


Skinny who? They are almost invisible as a brand which is really sad. Telecom need to look at Skinny as an independent brand aimed at deflecting 2degrees/voda competition. clearly this isnt working because Telecom cant decide who its target customers are. Perhaps Tcom needs focus


simple skinny equals low value prepaid and youth. Tcom mobile popstpaid and business.

Segment your customers like so and stop canibalising your own revenues you silly telco!


If I were a shareholder I'd be pretty peeved at this sort of stupidity. Heads need to roll oh wait that'll happen in the next restructure


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