At the 2degrees 3G launch

Pics, plans, prices and a prediction

2degrees is promising to launch post-pay deals before Christmas, but at today’s 3G launch it stuck to a pre-pay data offering.

The data plans 2degrees is offering on its brand new 3G network include ‘data packs’ of $20 for 512MB that expires in 30 days, $50 for 2GB that expires in 60 days and $150 for10GB that expires in 90 days.

Chief technology officer Mike Goss told Computerworld two weeks ago that the 3G network will enable peak speeds of 7.2 Mbit/s, although realistically most users should expect between 800Kbit/s and 1.4Mbit/s. The 2degrees 3G network is only available in the areas where the company have built cellsites – Auckland, Wellington, Christchurch and Queenstown. Outside of that 2degrees’ customers can use their handsets on Vodafone’s network. But the dongle or data stick won’t operate.

CEO Eric Hertz says the company is launching a new website tomorrow - www.ripuptherulebook.co.nz - where people can sign up and keep track of new products (it won’t be announcing post-pay deals straight away).

He says since 2degrees launched a year ago, 92,000 people have brought their phone over from Vodafone or Telecom. He would not provide an update on how many subscribers it has (it last revealed 206,000 customers in February), promising to provide new customer numbers in the first quarter of the financial year.

Although it has plans to launch post-pay plans, 2degrees’ focus is squarely on consumers.

“Business users have a whole different set of needs and demands but if we’re successful in a few years hopefully we can build that but for now we’re focussed on delivering a product to consumer, family and small businesses.”

He says it’s hard to measure mobile penetration in a market that is so heavily “prepaid”, but he predicts New Zealand could reach the same as Ireland’s penetration rate of 130%.

IDC analyst Rosalie Nelson says 2degrees needs to keep evolving and mobile data is the one growth area, with mobile voice revenues coming under pressure and “there’s not a lot of revenue in text even if you get volume growth.”

She points out that the advantage of mobile data is that network operators don’t have to share their revenues as there are no mobile termination fees.

Nelson says 2degrees could make a real play into the SME market, but they are unlikely to cater for large organisations. “2degrees is just not playing in that space,” she says.

“What interest me is the degree to which 2degrees starts to pitch this as a substitution, particularly for students or for those single households who may like to have that budget control and just go mobile only,” she says.

Nelson doesn’t view handset range as having the same importance for mobile network owners that it once had. “What we are clearly seeing is a change in behaviour towards a multi SIM market and when it comes to smartphones a lot are not actually purchased through established channels, they’re purchased through ‘grey channels’ (that is parallel importers, trade me auctions etc),” she says.

“There may some top line value to having a few brands, but the consumers are making their own choices about who and when they buy and the secondary choice comes down to the service provider.”

(from left) 2degrees director of corporate affairs Mat Bolland (previously with TelstraClear), Rosalie Nelson and IDC analyst Rosemary Spragg (previously with MED).

Attending today’s launch was Andy Scott, who together with Claudia Mayr-Dobin owns Communication Venture Partners, which has a 28.8% stake in 2degrees, estimated to be worth around $100 million. Scott is a New Zealander whose career began as an investment banker in London where he became involved in telecommunications.

He subsequently invested in networks in Eastern Europe, Africa, Ireland, South America. He has been partnership with 2degrees’ major shareholder Trilogy in other networks. Trilogy has a 57% shareholding and has been cleared by the Overseas Investment Office to acquire up to 100%, but Scott wasn’t commenting on the composition of 2degree’s shareholding interests today.

Scott invested in 2degrees in 2007 and has returned to live in Auckland. He also sits on its board of directors.

(From left) 2degrees director Andy Scott and founder Tex Edwards.

Meanwhile 2degrees commercial officer Bill McCabe is predicting that ICT Minister Steven Joyce will make an announcement on whether to regulate Mobile Termination Rates in August. “My hunch is this month,” he told Computerworld.

(From left) Bill McCabe with Martin Loire and Chris Malcolm demonstrating the 2degrees Micro-SIM in an iPad.

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Tags 2degreesEric HertzRosemary SpraggTex EdwardsAndy ScottRosalie NelsonBill McCabeMat Bolland

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