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Skinny Mobile misses 'O-week' targets

But new Telecom sub-brand strikes back with a new data deal.

Chris Keall
Mon, 05 Mar 2012

What happened? "O week" has come and gone, without Telecom's new Skinny mobile starting online sales, or its promised killer data plan appearing.

On Saturday, as orientation week was winding down at the University of Auckland (a key youth market battleground), Skinny boss Paul O'Shannessey told NBR, "We are in the final stages of testing the site. All things going to plan, will be live in a couple of weeks."

Mr O'Shannessey promosed the new data plan would go live over the weekend. It did, with a 600MB for $8 deal appearing.

With 639,000 customers are still on Telecom's old CDMA network, due to be shut down July 31, the company is looking to its new Skinny sub-brand to speed the transition to Telecom's new W-CDMA network (marketed as "XT" to most customers). It's also looking to staunch defections to fast-growing 2degrees, which recently claimed 876,000 customers.

Separately, Mr O'Shannessey welcomed the Commrce Commission's rejection of 2degrees' complaint over SIM card locking.

"[It's] a fair pro-consumer decision," Mr O'Shannessey said.

"At the end of the day the consumer gets a great phone at a heavily subsidized price. If they choose to leave our network, even with the $30 unlocking fee, they are still considerably better off as our subsidy is greater than $30." 

On Friday, Tuanz criticised the decision, while 2degrees spun it as a partial victory.

Smoking? Drinking? Lorks oh-Lordy! This is not your father's Telecom. One of many photos on Skinny's Facebook page, which chronicles the new brand's frenetic promotional activity over the summer at various music and sports events.

Skinny Mobile re-tools with 'killer' data plan, talks online launch dates
Feb 10: Telecom's Skinny Mobile - which is pitching itself to the market as a "new" mobile network - soft-launched at retail last week, with its handsets and SIM cards appearing in some Dick Smith and Warehouse Stationery stores, among other outlets.

But the newcomer tells NBR it is already preparing a major shake-up of its weekly pre-pay plans.

The company also provided new details on its online launch plans.

Skinny boss Paul O'Shannessey told NBR his company would begin online sales through in "three to four weeks." Mr O'Shannessey's major focus was on getting online sales live in time for "O-week" - universities' orientation festivals, beginning around February 21.

New data, text plans
Skinny’s $4 a deal prepay deal looks sharp at first glance. But IDC analyst Glen Saunders told NBR the newcomer was weak on text (a key Vodafone strength).

It also lacked appeal in mobile data, where 2degrees – eyes squarely on Skinny – has just unveiled a $19 Data Combo deal (which covers 300MB of data, 30 voice minutes and 300 texts; Skinny offers 10MB of data within its $4 pre-pay plan, and a pricey 39 cents per megabyte for those on casual rates).

"He's right"
Skinny boss Paul O’Shannessey has a simple response to Mr Saunders’ criticism: “He’s right.”

Young people polled by Skinny over the summer as it flew its flag at events like Rhythm & Vines and the Wellington Sevens had similar gripes – especially over mobile data.

In response, Mr O’Shannessey said Skinny was preparing  two new plans – one a text pack, the other a “killer” data deal.

The new plans will be unveiled at the same time Skinny online sales go live.

ABOVE: A Skinny retail display at a Dick Smith store (click to zoom). The new sub-brand is occupying the space formerly taken by Vodafone, which disappeared from the troubled chain last year following a commercial spat.

Room for improvement at retail
Mr O'Shannessey would not comment on early sales numbers.

NBR visited Warehouse Stationery and Dick Smith stores in central Auckland, where sales assistants said there had so far been little interest in the new brand. The most popular item so far, was Skinny's Micro-SIM card, which can be popped into an iPhone.

Two customers browsing the mobile phone displays at Dick Smith were wary of Skinny. As a newcomer, was it a stable company?

Telecom is pitching the sub-brand as a new entity (mention of Skinny's parent company is found only deep on its terms and conditions page), the better to allow it offer budget deals without diluting its premium XT brand.

But could this arms-length approach go too far, if some customers think Skinny is fly-by-night?

Mr O'Shannessey said Skinny's promotions so far had been focussed on events. After its online sales went live, it would market more toward the mainstream, raising its profile with everyday customers of the type encountered by NBR.

The Skinny boss also said he was not satisfied with his company's first stab at retail. It planned to "re-skin" its displays.

Analysts see Skinny as a bid to staunch Telecom customer defections to 2degrees, attack Vodafone in the key Auckland youth market, and to speed customer transition from the carrier's older CDMA network to its new W-CDMA network (also used for its premium XT brand).

Earlier this week, a Telecom spokeswoman re-iterated to NBR Telecom will close its CDMA network on July 31.

At its last mobile customer update, in August last year, Telecom said it had around a million (or just under half) of its total mobile customer base still on CDMA. The carrier is due to provide its next update on February 24.

Read more about Skinny in today's print edition of NBR.

Chris Keall
Mon, 05 Mar 2012
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Skinny Mobile misses 'O-week' targets