Over the past few weeks there has been a advertising campaign (here in New Zealand) which has been introducing Two Degrees Mobile as a new Telco offering a mobile phone network here in New Zealand. There has been a lot of hype and also an expectation that the cost of mobile calls will be a lot cheaper. It is common knowledge that the existing telco’s have been charging unfairly for years, therefore the introduction of another player suggested that we would see cheaper calls.
Sorry to say it, but, Two Degrees is just another Telecom or a Vodafone. All that they have done with their prices is re-packaged them in such a way that they fool their customers into thinking that they are a cheaper option.
Currently, I use a pre-pay plan with Vodafone and I thought that I would compare it with that of Two Degrees.
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Vodafone Costs/month
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Two Degrees Cost/month
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| 2000 Text Messages (within the same carrier or Telco) |
$10.00
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$180.00
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| Talk to my wife for 10 minutes a day on her mobile |
$6.00
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$132.00
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| Broadband Data – 100MB/month |
$10.00
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$50.00
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| Other Calls (20 minutes to other networks etc) |
$17.80
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$8.80
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Totals
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$43.80
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$370.80
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Now, I know that 2Degrees would argue this from the view that their price for calling almost anywhere is only $0.44 and likewise texting is only $0.09, however this doesn’t resemble my usage habits or their marketing campaign.
In their marketing campaign, 2Degrees suggests that everyone in the world has only 5 degrees of separation between each other, however, in New Zealand, 2Degrees believes that there is only 2 degrees of separation and therefore would like to make it possible for New Zealanders to have a Chin-wag (chat with each other). This would suggest that it is going to be even cheaper to call locally here in New Zealand. When they launched their pricing plan they state that a call costs $0.44/minute even to overseas phones, but most pre-pay customers don’t want to spend anything and therefore use skype to call their overseas friends!
Being that their marketing campaign is targeted at New Zealanders calling New Zealanders, then I believe that they have not only mislead the public, but they have not helped at moving the pricing of calls on mobile networks to a more acceptable level. Yes, their termination rates to other networks are cheaper, but that is because they are being subsidized by higher data costs and the higher cost of calls on their network.
Two Degrees does also promise some “magic” in the way of extra’s when you top-up with credit on their service. However, this “magic” is not consistent and it is clear that it will change, therefore it is a bit of a gamble really.
Have you had enough of these high prices? Here is how you can help:
1. If you agree with me, then send this article to your friends on TWITTER or FACEBOOK
2. Click here to complete a form to complain to the New Zealand Commerce Commission (it will only take you 2 minutes)
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{ 17 comments… read them below or add one }
Vaughan, I think you have it partly wrong. For a start you have only made the comparison above to you. If you only have one person that you want to call then that is fine, but what about the 70% of mobile users who are on pre-pay in New Zealand that want to make calls to multiple people? Why should the incumbents dictate who we make our calls to? Why should you only be able to call your wife at such a cheap rate? Sure, for those who are just calling one or two people then you’re right, it doesn’t make sense for them to switch to 2degrees. But what if your wife wanted to change to Telecom, or 2degrees (heaven forbid)? You would have to pay 89c per minute. With your text 2000 you’re also only allowed to text Vodafone customers, I use allowed purposefully because essentially we’re being told what we have to do and how we do it by a mobile company. They are forcing users into these habits. 2degrees has always said they are unable to compete with these sorts of bundles, that’s why they are fighting the incumbents so vigorously to ensure there is some regulation in the Telco market so that 2degrees can offer these sorts of deals to their customers (there is much more to this but to be honest I just can’t be bothered). One other thing you failed to take into account in your post; 2degrees lets you call landlines for 22 cents, that’s twice as cheap as either of the other 2. Sure, there are pockets of value out there for some people, but for the most part Vaughan, people have to search for them, use 2 phones, call at certain times of the day, days of the week, specific people. If you like being told who you can call and when you can call them, then stick to the status quo. Enjoy.
@Paul
Thanks for your comments.
You are correct, the comparison that I have made in this post is only in line with my usage habits. However, 2degrees have done their marketing buildup in such a way that the public was lead to believe that everyone could save money. In “my” case this is certainly not the case.
What some people seem to be missing, is that 2degrees offers only one way of making calls and that if you do not fit into that mold, then it will cost you a lot more. I suggest that, this is in fact 2degrees telling their customers how to make their calls. It does not give an options at all.
On the other hand, Vodafone is not telling people how to make their calls. In fact, they offer various prepay calling plans to suit different usage patterns. You are able to pick and choose form what you think may suit you.
In regards to the Text2000 restrictions. With 2degrees you pay for every text message that you send. In my case I send most of my text messages to people on the vodafone network, and I also send a few to other people on other networks which do cost me 20c to send. If I was to take into consideration the cost of Text2000 along with the cost of sending messages to other networks, take that cost and divide it between the total amount of text message I send, I would still be paying, on average, less that most people on 2degrees.
By the way definition of a scam: fraudulent business scheme.
2D is not scamming anyone! they have stated their prices and are not making any false claims.
Okay lets have another comparison.
Call landline for 10 minutes – V $8.90 – 2D $2.20
Call other carrier for 20 Minutes – V $17.80 – 2D $8.8
100 Text to anyone (no plan) - V $20.00 – 2D FREE
100 text to USA – V $30.00 – 2D $9.00
Funny how the numbers can be changed like this. Simply because you are NOT the right market does not mean they are a SCAM. Going by the definition of a scam, you ARE a scam due to the dodgy way you present this blog.
@Steve
Thanks for your comment.
I just found a copy of their initial advertisement that I found on youtube.
At the point in the add where it builds up to the introduction of 2degrees, they say “dedicated to keeping you, your friends and your money together”.
Now, that would make 2degrees sound a bit “fraudulent” (a term that you introduced in your comment) as they don’t offer me anything which “keeps me and my money together”. In the advertisement they make a direct appeal to me by using the word “You” on multiple occasions.
Concerning the figures you came up with. You have not checked out the pricing on Vodafone’s website which includes talking to the USA for $2.00 for up to 1 hour. To do the same on 2degrees would be $26.00.
Not only that, but with Vodafone I have a choice of using a cheap data plan. It is much cheaper to use twitter or email to communicate than even if you were charged 0.025 cents (notice, that was part of a cent) a text message.
hmm…. Interesting.. you are right..
If you look at the basic prepay without addon’s, then 2degrees comes out overall the better.
We are talking about the average majority of prepay customers. The ones who don’t txt or talk that much on a mobile.
Yes I agree there are some good addon’s that are available, and that you will benefit form these.
However how “young” is 2degrees, oh that’s right, barely two months !!
The other two telco’s have been around a while longer.
Give them a chance before you go shooting them down !
I think they will come out with some other addon’s, plans, deals, rates etc in the future.
Just be patient. You can’t expect any new company to have everything when they launch.
@Chris
Thanks for your comment.
I agree in part with what you have to say and there are people who 2Degrees will suit. However, they only have one choice for how you use their services. Vodafone and Telecom offer solutions which allow other options.
I don’t agree with the above comment. Mobile phone carriers have been around for a long time and they have had different plans which have come and gone to suit the market. Vodafone and Telecom have been competing with each other for a long time as have other mobile carriers throughout the world. Therefore, 2Degrees have had pricing plans which they could use to base their thoughts and ideas on. This could be done in 1 day around a boardroom table.
2Degrees has had more than enough time to come up with appropriate plans. 2Degrees has been around for quite some time as a company. I know this without looking at the companies database as mobile networks take time to build along with negations with the various business partners.
This is just my view, but nobody invests millions of dollars and expects to succeed without a plan of attack. 2Degrees are not new boys on the block, the backgrounds and experience of their management would indicate that they know what they are doing. Patience is not a necessity in this case.
Fraudulent is where a company promotes a message that is “intended to deceive”. There is a difference between fraud and targeted marketing. 2Degrees, along with Vodafone and Telecom, have different offers which are targeted at different customers with different needs and different usage patterns, and their marketing is intending to target only these individuals.
The “battle of the examples” is pointless because there will never be a “one-size-fits-all” company. In steves example, it does not matter if Vodafone is offering the “60 for 2″ promotion because steves “theoretical customer” that he demonstrated does not need this – they only send TXTs to the USA and do not make any phone calls. Taking this example further, what happens if another theoretical customer wanted to call a country not included in Vodafones “top 15″, but included in 2D’s “top 21″? Obviously, 2D would be the cheaper provider, coming in at $0.44/minute with Vodafone charging $1.39/min and Telecom offering the same rate for anywhere outside of their “top 5″.
But looking at your personal example, where you are mostly only calling your wife, texting your friends (who are all on the same network) and using data (which 2Degrees has stated they are not focusing on at the moment), then I would say Vodafone, and your current setup, is the one best suited for yourself – and this is partly due to their marketing which I’ll explain a bit more below.
What if a theoretical customer solely made phone calls that were not to a specific group of numbers (read: not a select group of “BestMates”) – 2Degrees would come in at $0.44/minute (or $0.22/minute to 2D/NZ Landlines) as opposed to $0.89/minute on Vodafone. Or another who liked to sent 500 texts to people on any network and didn’t call at all? I’d probably recommend the old CDMA Telecom network with $10 Text – $10 to send 500 texts anywhere as opposed to $45 on 2D or $100 on Vodafone.
2Degrees has chosen to target their market with a very simple pricing strategy and personally, this is something that I (and many other people – something I know from working in an industry that attempted to package a utility service), prefer. “Packages” and “promotions” come with strings attached that exist to do two things – act as incentives for new customers and, in the case with Telecom and Vodafone, act as incentives for customers friends. How? Because they also work as a restraint. Before the introduction of 2Degrees, if you approached a group of friends you would find that they would all be on the same network – why? Taking the example of Telecom Boost Text, if you topped up your $10 a month and then sent just 1 text to a Vodafone mobile you ended up with the pain of having to top up again to be able to send your 50 texts that made you eligible to receive the remaining 1950 free. Or with Vodafone, if you purchase your $10 Txt2000 pack and then only send 50 texts that month… well, congratulations, you’ve paid $0.20 a text – but then again, you’re still paying $0.20 for a text to your new mate who is on Telecom, with or without the package. What did this mean? Friends would switch networks just to stay “in the loop” creating new acquisitions for these companies and new customers through “clever” marketing.
I agree with the 2Degrees stance here because they believe that communication should be open and not restrained by crazy pricing schemes. And it’s through this “vision” that they are able to help “keep you, your friends and your money, together” – by allowing you to communicate “freely” for less. In your situation, this may not be the best option and that is why it is awesome that we do have competition in this market because it means that YOU ARE able to chat to your wife for 10 minutes, send your 2000 texts, surf your 50MB of data and make your 20 minutes of other calls for only $43.80 – because you somewhat fit into one of Vodafones targeted marketing packages.
Marketing is a lucrative game, but it’s not fraud. Don’t try to compare two companies with totally different views and offers as apples with apples. A package deal doesn’t work for everyone and thats where the benefit of having more and more options lies. 2Degree’s has arrived and they definitely will not suit everyone, but they have provided an alternative that was not available before and a bit of fresh air in a market that was very much dominated.
@Jamie
Excellent post, a great contribution to the argument.
When it comes to the amount of time I talk to my wife as opposed to calling other people, let’s consider the averages. If I take into consideration (let call it free even though best mate costs $6.00) free minutes + the costs of other calls and the divide the total price across the minutes, then the average price for most people using this structure would find that it would be cheaper than $0.44/minute.
As far as target markets are concerned, I would feel that I am well within 2degrees market. If I am not a part of that target then they have a issue when it comes to the growth that the are wanting. I have a lot of friends / other people I know who are using prepay in a similar way to what I do. They advertise that the more that join, the better it will get. I understand that this week they reached the 10k mark for active users. Being that there are now more cell phones in New Zealand than there are people, and all the marketing they have done, that is a very slow start. There are reasons for this.
Once again, you may disagree with my comments and I would be happy for you to share your differences. I do like the trouble you have gone to with your comment
It depends how you use it. They are not appealing to those who sent 2000 text, that costs them money. and for the best mate, why do they need to be another telecom or vodafone.
For others like me, I dont send 2000 text, I get 100 free text a month and 9c texts after, which for me is very cheap, as i dont text much. and 44c and 22c calling is attractive as i now call as I have credit instead of wasting credit on $10 text that I dont use. If vodafone and telecom provide better service for you use them. For me I have said good bye to them, I dont waste money. You have no idea how much money $10 text costs companies, we are the only country 2 do it, finally 2degrees delivers
Your comparison is highly misleading.
Do you really send *exactly* 2000 SMS to Vodafone customers only a month? I doubt it. Very few people in New Zealand do.
Let’s say you send 200 SMS a month to Vodafone customers (which I would expect is well above the median) and 10 SMS to non Vodafone customers, including perhaps people overseas. On Vodafone that works out to be $10.00 + $2.00 i.e. $12.00. On 2degrees $18.90. Vodafone is still cheaper but not in the highly misleading manner you suggested.
And BTW, are you sure all your friends are on Vodafone? Bear in mind with number portability, they could be Vodafone, Telecom or 2degrees with an 021 (or 022 etc) number and you may not realise. They may not bother to tell you when they switch either.
I could do the same thing with the data thing as well. But I won’t bother.
Also you haven’t considered international SMS (likely quite popular with international students and recent immigrants for example). And your claim it’s more expensive to call within the same network is hardly true. Most people I know are currently on Vodafone. It’s cheaper for me to call them with 2degrees however since 44 cents is less then 89 cents. Sure if I called each of them for more then 13 minutes a month then it might be cheaper. But I don’t. If you have a partner you may but even then I suspect most people don’t if they live together. And even if you do you have to call them a lot (and yes 10 minutes a day is a lot in my book) and everyone else very little before it’s definitely going to be cheaper.
Don’t get me wrong, 2degrees isn’t for everyone. However it is clear to me that there are a large number of people who will be better of on 2degrees. In particular(those with low to medium usage, particularly those who call more then SMS and who don’t call a specific number a lot. I think it’s clear this is the market 2degrees are targeting. Any comparison which starts off with the assumption you’re paying $10.00 for 2000 SMS (or 0.5 cents) is nonsense, since it is unlikely many people send 2000 SMS *exactly*. Ditto with data. A good starting point is you have to send more then 111 SMS a month for Vodafone’s $10 for 2000 package to be cheaper.
In my specific case, I don’t call or SMS that much (a few minutes and around 15 SMS a month). I also send a fair few international SMS. I will probably do it a bit more with 2degrees then with Vodafone because 2degrees rates are better.
I also hardly ever use data. Why? Because I don’t have the need to use a lot. Sometimes when I’m out I wanted to check a website or two. With Vodafone I could do that, but it was very expensive. Even worse before the introduction of the $1.00 for 10 mb for a day but I won’t go there… So I never did it. I don’t want to spend $6.00 (Telecom XT, up to 20mb) or $10.00 a month (Vodafone up to 100mb) or $1 a day (up to 10 mb). With 2degrees I can do that for a more reasonable price (still not cheap, but much less then $1 I could easily end up spending on Vodafone or XT given their ridiculous casual rates) . Sure the dataplans would be nice to have sometimes (particularly the $1 a day plan although particularly with a GPRS phone, using more then 2mb is probably not that common) but I rarely used them.
And most people I know are like me more or less (not necessarily the international SMS or data part). Many use more then me, but even then, for most of them 2degrees works out cheaper.
As to the 2degrees growth, well I think there are a few key points. Firstly many people may not have bothered to move yet. I know some people who are waiting to see what Vodafone’s and XT’s response will be. And me personally and most people I know are on prepay anyway so they can’t switch until their Vodafone credit runs out, unless they want to forgo their credit.
P.S. One clear cut loss on 2degrees is MMS, that’s cheaper on Vodafone in some cases and never cheaper with 2degrees.
P.P.S. I’m not saying 2degrees prices are brillant. But better then Vodafone and XT for casual users? Hell yeah!
P.P.P.S. I have purposely ignored the topup etc promos, since they only apply if you topup and are not guaranteed to last
Whats plain to see from the above comments is that as consumers we might as well make the most of all the strengths that these 3 networks offer us. I have a vodafone and telecom cell and utilise both $10/200o txts packages, and now that 2degrees is around i dont even need to buy another phone i can just swap sim cards around and make use of the cheap calling rates. But i guess it really comes down to independant usage. Good on 2degrees for getting in on the action and bringing calling rates down.
@El
What would be really good would be a sim card which could support multiple phone networks at once. I know that a lot of mobile phones have a feature which allows for at least two lines. This has been around for some time.
Does anyone by chance to know how long a moblie message will be counted both in 2degrees and Vophone? I can not dig out any information from their website.
I don’t know why my credit with 2degree number has been gone so quick by just sending mobile messages to friends in one month?
Vaughan
I know that this is way after your original post, but Ive been on 2 degrees for approximately 6 months and can tell you that my telephone usage has increased since Ive been on 2 degrees but my costs are way lower than when I was on Telecom. Call usage has increased because now I don’t worry about how long Im speaking for as it does not cost me nearly as much as it did on Telecom. Basically I charge my phone up with credit a hell of a lot less with 2 degrees than Telecom. I and others who use 2 degrees are greatful for the change.
Vaughn,
Clearly 2degrees is not for you. I can tell you that since moving across to them I’ve knocked between 25% to 50% off my monthly bill. We’re all different, and while your comparison is valid for you is presumably isn’t for many others.