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Australian prepaid customers get a better deal than their Kiwi cousins

...because Australian operators are including free minutes, capped call charges, free text messages or extra credit even with prepaid plans, the monthly spend of a prepaid customer is substantially lower in Australia than in New Zealand

Interested in this topic? Contact our pricing specialist Noelle Jones email us

See our updated analysis of the 2010 mobile prepaid rates.

Prepaid mobile customers in Australia have more choice and cheaper plans than those in New Zealand. Australia has four operators offering a myriad of different plans; some with free minutes, capped minutes, free text messages or extra credit included. New Zealand, on the other hand, has two mobile operators each offering only three almost identical prepaid options.
 

Exhibit 1: Summary of the prepaid pricing regimes in New Zealand and Australia, February 2006 [Source: Network Strategies]

Feature New Zealand Australia
Number of mobile operators 2 4
Number of prepaid plans per operator 3 2-7
Call billing period Telecom: per minute; Vodafone: per second after the first minute Per 30 seconds (except most of Vodafone’s plans which are per second)
Minimum charge/connection fee One minute minimum Connection fee per call (AUD0.20-0.27)
Top-up validity periods 12 months 30 days to 12 months (varies between plans and top-up amounts)
Conditions affected by top-up amounts None Validity periods, included usage, call rates
Included usage options (dependent on plan)  
- extra credit with recharge None Optus, 3, Telstra, Vodafone
- credits from received calls None Telstra
- free network minutes None Optus, 3
- free night minutes None Vodafone
- free texts None Vodafone
- capped network calls None Vodafone
- reduced call rates Telecom, Vodafone 3, Telstra, Vodafone
- reduced text rates None Optus, Telstra

more choice

New Zealand

The prepaid plans offered by Telecom and Vodafone New Zealand have identical calling rates and peak and off-peak times. The only difference between the operators is that Telecom charges per minute, whereas Vodafone charges per second after the first minute.

Australia

Calls on Optus, 3 and Telstra prepaid plans are billed at 30 second intervals but most Vodafone Australia plans charge per second. These shorter billing intervals benefit the customer, enabling customers to reduce their calling charges, paying only for the time they actually use.

Many Australian plans include substantial free credit in relation to the recharge value. For example with Optus’s TurboCharge plan customers receive AUD250 credit when they spend AUD50 to recharge, and with Vodafone Australia’s Mega Cap plan a recharge value of AUD149 gives a credit of AUD1200. In both cases the credit is only valid for 30 days.

Users on Telstra’s Pre-Paid Plus plan accrue credit of AUD0.05 for every full minute of incoming calls received.

cheaper plans

Prepaid plans have traditionally been better suited to low users. High users seek more value for money by upgrading to postpaid plans, which have traditionally included free minutes and cheaper call rates.

This is still the case in New Zealand but because Australian operators are including free minutes, capped call charges, free text messages or extra credit even with prepaid plans, the monthly spend of a prepaid customer is substantially lower in Australia than in New Zealand.

A New Zealand low user (one that makes 25 calls and sends 30 text messages per month) will pay more than double that of a user on the cheapest prepaid plan in Australia (Exhibit 2).

 
Exhibit 2: Monthly spend for a low prepaid user [Source: Network Strategies]
Monthly spend for a low prepaid user (Source: Network Strategies)

Australian high prepaid users (making 150 calls and sending 42 text messages per month) save even more, paying up to $222 less than their counterparts in New Zealand (Exhibit 3). 


Exhibit 3: Monthly spend for a high prepaid user [Source: Network Strategies]
Monthly spend for a high prepaid user (Source: Network Strategies)

implications for NZ customers

High users in New Zealand must choose a postpaid plan to reduce their monthly spend, and thus relinquish the advantages of a prepaid service, namely:

  • control over spending
  • no fixed term contract
  • no commitment to a monthly fee
  • no credit check
  • no need to provide personal details to the operator.

Note that 69% of mobile customers in New Zealand use prepaid even though there are none of the included extras offered by Australian operators. In Australia prepaid users comprise 51% of mobile customers (Exhibit 4).

Exhibit 4: Mobile penetrations for selected countries, June 2005 [Source: regulators, Telecom New Zealand, Vodafone New Zealand, Network Strategies]
Mobile penetrations for selected countries, June 2005

Notes for analysis of monthly spend:

  • prices include GST (at the rate relevant to each country) and are in New Zealand dollars
  • Australian prices were converted to New Zealand dollars using 2004 Purchasing Power Parity (PPP) rates sourced from the OECD
  • all plans were current as at 10 February 2006
  • the prices for each operator represent the plan resulting in the lowest monthly spend
  • OECD mobile baskets of usage for a low user and a high user were sourced from the European Commission, European Electronic Communications Regulation and Markets 2004 (10th Report).
  • analysis includes only 2G plans
  • our analysis of the Telstra monthly spend excludes free credit of AUD0.05 per full minute of received calls.

February 2006

Copyright © 2006 Network Strategies Limited

 
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