2degrees announces 580,112 customers

IDC analyst discusses 2degrees revenue and market share

2degrees CEO Eric Hertz held a press conference at the Auckland Town Hall today to announce that since launching in August 2009, the company has acquired 580,112 customers.

The last time 2degrees declared its customer numbers was in February 2010, when it claimed to have 206,000.

IDC senior market analyst for telecommunications Rosemary Spragg says that based on modelling done in December 2010, 2degrees customer numbers were slightly higher than she had anticipated.

IDC modelling showed 554,000 customers, which is 10.5 percent market share. This compares to Vodafone with 47 percent market share and Telecom 41.5 percent. 2degrees count customers who used a paid service over their network in the past three months, while Vodafone and Telecom count their customers over a six-month period.

Spragg says she will revise IDC's modelling for 2degrees “upwards a little” based on today’s customer numbers.

According to the modelling done in December, while 2degrees customer numbers may give them 10.5 percent market share, the revenue share is around 5.6 percent.

At the press conference Hertz declined to be specific about ARPU per month other than to say he believed it was “above average”. Later Computerworld asked 2degrees chief commercial officer Bill McCabe to define what Hertz meant by “above average”, but McCabe says it's difficult to determine ARPU as it involves both wholesale and retail figures.

But Spragg says IDC does distinguish between retail and wholesale numbers in its ARPU modelling. She puts the retail figure for 2degrees at $18 a month – that includes both prepay and postpay. The prepay-only figure is $17 a month.

Compare that to Vodafone. It last published ARPU in the third financial quarter of 2008. At the time it was $21 for prepay and $106 for postpay. IDC’s modelling in December 2010 showed Vodafone ARPU at $18 prepay and $95 for postpay.

Telecom’s monthly ARPU is put at $9.50 for pre pay and $55 for postpay.

Hertz declined to say how many minutes of calling time there was over the network, he was unable to say where 2degrees’ customers are based geographically nor could he give an indication as to how many customers had “churned” – that is customer turnover.

Hertz did say he thought mobile penetration is 120 percent and this is partly due to New Zealanders owning more than one handset. But Spragg says high penetration rates are also due to people owning multiple mobile devices such as iPads, and dongles and embedded devices. Here are the IDC predictions for penetration.

2007: 106 percent

2010: 118 percent

2011: 121 percent

2014: 125 percent

“This is based on total connections, including data-only devices, as at the end of the calendar year. Our definition of a connection is one that has been active in the previous six months (aligning with the Telecom and Vodafone approach). We have used Statistics New Zealand population numbers and forecasts where available,” Spragg explains.

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