Spark looks to bigger phone bundles for ARPU refresh

Sunday, 10 November 2024, 1:07 pm
Article: Bill Bennett

Spark banks on premium bundles to boost ARPU

Spark has announced new mobile plans which have the potential to improve its average revenue per user (ARPU).

When the company reduced its guidance for the 2025 financial year last month, it told the NZX that it expected its mobile service revenue to stay flat year-on-year. The company had previously forecasted a three percent growth. Spark listed pressure on mobile ARPU as one reason for the guidance downgrade.

Historically the company’s higher priced pay monthly plans have been major contributors to ARPU. The new plans all sit at the higher price end of the scale.

Dollars for data

In its media announcement, Spark says the new plans will improve the dollars for data ratio. In other words, it implies customers will get more data per dollar spent.

The new plans feature what Spark calls endless data. That’s a way of saying that, within reason, there are no limits on the total amount of data a customer can download. However, customers only get a set amount of data at the network’s highest speed. Once that is used, Spark throttles speeds down to 1.2 mbps which isn’t practical for applications such as video.

Unlimited calls and SMS to New Zealand and Australia are a standard part of the new plans.

Premium plan

Spark’s new $90 plan allows unlimited maximum speed data downloads, bundles a Spotify Premium subscription and an Apple One Number Wearable plan. This would normally be used with an Apple Watch. Spark says the Spotify subscription is worth $19 a month and the Apple plan is worth $7 a month.

Customers buying this plan also get 200 minutes of international voice calling and 100 international texts, to a limited list of destinations. Buyers can add other names, Spark calls them ‘companions’ to the plan for $45 a month each.

Bundling services like Spotify and a second account for a wearable is a proven way to lure customers to higher cost plans and improve ARPU.

Data demand

Spark SME and consumer director, Greg Clark says research shows customers value data for dollars about everything else and that average monthly data use climbed by almost 30 percent last year.

Balmer and McCarthy join Kordia cyber security team

Kordia has appointed Elaine McCarthy and Patric Balmer to its cyber security team. McCarthy joins Kordia from Computer Concepts where she was head of IT managed services. Her new job title is head of delivery – cloud and cyber security.

Balmer was previously Spark’s managed security services practice lead for the telco’s cyber defence division. He will become Kordia’s head of cyber managed services.

Spark Health finds collaboration and virtual care partners

Spark’s Spark Health unit says it is working with New Zealand based Celo to offer its customers in the healthcare sector secure team and patient collaboration services. This will let customers move between communications mediums while keeping clinical documents safe.

The company is also working with Visionflex, an Australian firm, to give customers virtual care technology. It should help expand virtual healthcare in New Zealand.

Healthcare has long been spoken of as an important application of fast networks like the UFB. It has been slower to take off than other applications, not least because the people who could make the most use of online healthcare, those living in rural areas, are least likely to have access to fibre.

Apple enters LEO satellite sector through Globalstar stake

Apple has taken a 20 percent stake in Globalstar. The stake is worth US$400 million and extends the existing relationship between the two companies.

The iPhone maker will pay Globalstar a further US$1.1 billion to improve the company’s satellite infrastructure. This will include an expanded satellite constellation, more ground-based infrastructure and additional licences.

Globalstar’s low earth orbit satellites provide the communications network for the Emergency SOS feature on Apple iPhones. This includes the ability to send and receive text messages while in remote places where there is no cellular coverage.

For now Emergency SOS is a free service, although Apple has said it plans to charge users in the future.

Apple's investment in Globalstar can be seen in the context of its success in offering subscription services to its hardware customers. It's possible that over time the satellite operation could expand to include non-emergency messaging and even voice calls.

Tablet market grew 11 percent in third quarter

Research company Canalys says worldwide tablet shipments were up 11 percent year on year in the third quarter of 2024. They totalled 37.4 million units. It is the third quarter in a row of growth. Canalys says demand is up in both consumer and commercial sectors.

Research manager Himani Mukka says: “Even in markets where factors like inflation have weakened consumer demand, business demand has picked up, leading to device refreshes as well as new deployments of tablets in commercial scenarios.

“Industry verticals like education, healthcare and retail are notable examples of renewed investments in tablets to drive digital transformation efforts. While the overall market growth has remained modest, recent performance indicates a healthy outlook for the role of tablets across different end-user segments.”

Apple remains market leader with iPad taking a 36.3 percent share of the total. Samsung is in second place, selling roughly half the number of devices to take 18.4 percent of the market. The runners up include Lenovo and Huawei.

In other news...

Spark faces D-Day: Analyst says its stock is way over-sold
At the NZ Herald Chris Keall dives into the wider implications of Spark’s recent guidance downgrade.

What Trump win means for global telecom
CommsDay’s newsletter-only story isn’t available online. In it Grahame Lynch says Trump’s victory will “have profound effects on the global telecom sector, not least with the propulsion of SpaceX head Elon Musk to the centre of American policy making. One big change could see a compulsion on big tech companies to contribute to telecom universal service costs”.

Lynch also anticipates further action against Chinese tech firms like Huawei, ZTE, and TikTok, due to perceived national security threats.

Empathy and action needed for data breach victims: UK information commissioner
The United Kingdom's privacy watchdog, the Information Commissioner is none other than New Zealand's former privacy commissioner, John Edwards. Juha Saarinen reports his warning:

“...it’s not a matter of if you'll be hacked, but when, might just be true if the British experience is anything to go by. What's more, if you suffer a data breach, support can be hard to come by.

The environmental campaigners fighting against data centres
A report at the BBC from Emma Woollacott looks at the push back from locals when tech companies build data centres. Don't think that can't happen here.

Farewell to NZRise: Reflecting on a legacy and the need for government advocacy
At the ITP site Vic MacLennan writes about the lobby organisation that went in to bat for local technology companies.

The Download Weekly is supported by Chorus New Zealand.

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Bill Bennett

Freelance journalist.

Auckland-based Bill Bennett writes technology and business stories that are directly relevant to New Zealand readers.

His emphasis is on telecommunications, but he also covers other aspects of technology and business. You can find his features in the New Zealand Herald and hear him regularly on RNZ Nine to Noon and the NZ Tech Podcast.

Bennett's The Download Weekly newsletter is published every Friday. You can sign up for it here. If you want to support his work, you can make a donation to his PressPatron account.

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