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With the merger complete, 2degrees CEO Mark Callander shares his initial plans for the business. 

 

Incoming CEO Mark Callander used a press event marking the completion of 2degrees' merger with Vocus to lay out the company’s stall.

Pride of place goes to a new wireless broadband service which was launched at the event. 2degrees will offer customers unlimited downloads and 5G fixed wireless speeds at an “introductory price” of $65 a month.

It’s a competitive move, but unlikely to scare competitors at this stage.

The price is $4 a month less than Vodafone’s unlimited 5G fixed wireless broadband plan. The gives 2degrees a 5 percent price advantage. Vodafone customers can get unlimited fixed wireless on the 4G network for $55 a month.

Skinny offers a $55 unlimited fixed wireless broadband plan on Spark’s 4G network with average download speeds of 32 Mbps.

2degrees offer an unlimited fibre plan for $65 a month that offers 300 Mbps downloads.

Greater market share

Callander says 2degrees will push into a range of market segments and that he expects the company to take a greater market share.

One area where the merger could have an impact is selling services to businesses.

Before the merger 2degrees underperformed in business markets while Vocus was more successful, especially with small and medium customers. Bringing the two business product portfolios together brings the company closer to parity with Spark and Vodafone.

In particular, Vocus has enterprise customers who, until now, have been supplied with other company’s mobile phones and network services. Bringing this business in-house will not only improve margins but will also give sales teams a better story.

Infrastructure

Callander points out the combined resources of 2degrees and Vocus brings a lot of infrastructure. In most countries the third largest telco has a lot less infrastructure than the biggest players.

He says: “We intend to leverage this to shake up the telco landscape and better service customers across mobile and fixed services.”

Recent large telco mergers and acquisitions in New Zealand have stumbled over integrating back office functions. This is likely to be the biggest challenge facing the merged company. Vodafone continues to struggle with acquisitions from as long ago as the 2006 iHug purchase.

Callander says there is a programme of work to simplify and digitise the business. “We have a lot of experience of this over the decades, and it will be core to the new-look business and how it meets customers’ needs.”

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Skinny Jump low-cost broadband in demand as rising prices hit

Spark says the company’s Skinny Jump subsidised broadband programme has seen a surge in uptake. Before Covid there were 4,000 homes connected to the network. Today there are 22,000.

The company puts this down to the fast-rising cost of living.

Skinny Jump is a fixed wireless broadband service. Spark says it is not-for-profit. Families with students in low-decline schools and recent refugees can get it free for one year. After that prices remain low with data costing $5 for 35GB.

Spark CEO Jolie Hodson says: “Not being able to get online is no longer an inconvenience – it means missing out on access to key services such as online banking, not being able to work remotely, kids falling behind at school, and losing the opportunity to learn key digital skills. And with our workforce becoming increasingly digital, this puts these individuals at risk of falling even further behind their peers.”

Read how the Covid pandemic made New Zealand's digital divide a more pressing problem.  

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As if we didn’t know our fibre network is better than Australia’s

Regulators on both sides of the Tasman acknowledge New Zealand’s UFB outperforms Australia’s NBN.

A report published by the Commerce Commission and the Australian Competition and Consumer Commission (ACCC), compares broadband plans in the two countries.

The report shows that at the time measurements were made in September 2021 New Zealand had faster fixed line broadband than Australia. Since then customers on 100 Mbps fibre connections have seen their plans upgraded to 300 Mbps at no extra cost. Which means the gap will now be wider.

Because comparisons were made between 100 Mbps and Fibre Max plans, the download speeds are similar in both countries - or were before New Zealand’s plans were upgraded. New Zealanders enjoy significantly faster uploads. Kiwi customers on 100 Mbps plans could upload at 22.3 Mbps while Australians had 18.2 Mbps.

On Fibre Max, New Zealanders get an average upload speed of 507 Mbps compared with 45.7 Mbps in Australia. New Zealanders see fewer outages.

Australians on fixed wireless can download at an average of 36.4 Mbps while New Zealanders only manage 29.2. Local wireless users get faster uploads at 17 Mbps compared to an average of 4 Mbps in Australia. Fixed wireless users experience three times as many outages on this side of the Tasman.

While Australians enjoy faster fixed wireless broadband speeds, the report notes: “In both countries, there is a significant difference between the performance of fibre and fixed wireless broadband connections.”

Since the survey completed, New Zealand's average fibre download speed passed the 400 Mbps mark. 

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Global phone Shipments forecast to fall in 2022

IDC says it expects phone shipments to fall 3.5 percent to around 1.3 billion units in 2022. That’s a big turn around from the research company’s earlier forecast of 1.6 percent growth.

To date the sector has seen three quarters of declining sales and supply chain challenges continue to have an effect. IDC says it expects the decline to be short-term and will rebound with an annual compound growth rate of 1.9 percent between now and 2026.

IDC lists inflation, geo-political tensions and continued supply chain weakness among the forces challanging the market but says the lockdowns in China are the greatest threat. These reduce demand in the world’s biggest phone market while simultaneously hitting supply.

Elsewhere Samsung has told journalists it expects to make 30 million fewer phones this year. It will cut the total from 310 million to 280 million.

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Spark Sport wins US Open Tennis rights

Spark Sport has signed a three year deal with the US Open Tennis Championship giving the business exclusive television and streaming rights until the end of 2024. Coverage starts in August with the US Open Qualifying Tournament. Spark Spark has other tennis rights, the company recently renewed its Women’s Tennis Association (WTA) rights.

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In other news…

SpaceX CEO Elon Musk talked about the next generation of Starlink satellites on YouTube saying they will be larger, more powerful and "in terms of useful bits of data, almost an order of magnitude better than a Starlink 1.0.” At the time of writing he has yet to get approval for the heavier rockets needed to launch the new satellite.

A report in Reseller News suggests Ericsson is the big winner from Huawei’s removal from the NZ telecommunications equipment market. The story says the firm doubled its New Zealand sales in 2021. Its breakthrough came when 2degrees chose the company for its 700 5G mobile sites.

Three years after the world ran out of IPv4 addresses, The Register reports on a plan to free up hundreds of millions of unused addresses. However, as the story points out, this will not be easy.

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Callander lays out 2degrees' stall was first posted at billbennett.co.nz.

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