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Australian prepaid customers still get a better deal than New Zealanders, with the gap widening

…the minimum monthly spend of a high user in New Zealand [is] $130 more than someone with the same level of phone usage in Australia

Interested in this topic? Contact our pricing specialist Nina email usMatthews

See our updated analysis of the 2010 mobile prepaid rates.

When Network Strategies compared the mobile phone prepaid deals offered by Australian operators to those in New Zealand in 2006, we found that New Zealanders were paying far more for services than Australians. Now, a year on, we have repeated the study to find out what, if anything, has changed.

The 2006 study found that there was far more choice available to prepaid customers in Australia, with four operators offering many differing plans that included free minutes, free text messages or extra credit. New Zealand, on the other hand, had two operators who each offered only three almost identical plans.

Moving on to 2007 and very little has changed in New Zealand. Telecom is still offering the exact same deals as in 2006, whilst Vodafone has added just one more plan. In Australia one of the mobile operators (“3”) is now only offering 3G services after closing down its 2G CDMA network, so has not been included in our update. The other three Australian operators, however, have increased the numbers of prepaid plans they offer, so there is still significantly more choice in Australia than in New Zealand. On top of this, the new plan structures have resulted in the monthly spend by Australian prepaid customers being even lower compared to New Zealand customers than it was in 2006.

The cheapest plans for each operator, and the resulting monthly spend for a low user (one who makes 30 calls and sends 33 text messages per month), for both 2006 and 2007 is illustrated in Exhibit 1. The general trend shown here is for an increase in monthly spend over the past year due to an increase in mobile usage (see notes below). It can be seen, however, that changes in the plans offered by Optus and Vodafone Australia have resulted in their plans providing far better value than those of the other operators. In fact a low user on the cheapest plan offered in Australia would spend $16 per month less than someone on the cheapest plan offered in New Zealand.

Exhibit 1: Monthly spend for a low prepaid user in 2006 and 2007 [Source: Network Strategies] Monthly spend for a low prepaid user in 2006 and 2007. Source Network Strategies

A similar comparison of monthly spending is given in Exhibit 2, but this time for a high user (someone who makes 140 calls and sends 55 text messages per month). In this case the general trend is for a reduced monthly spend as the level of phone usage for a high user has fallen slightly (see notes below). The most significant finding here, however, is how much more expensive the plans offered by the New Zealand operators are compared to the Australian ones. Whereas in 2006 Telstra was the most expensive operator, the monthly spend for a high user subscribing to its services has been reduced dramatically with the introduction of a capped plan – where a $57 monthly fee buys up to $293 of services. This has left the New Zealand operators trailing far behind all three Australian ones, with the minimum monthly spend of a high user in New Zealand being $130 more than someone with the same level of phone usage in Australia.

Exhibit 2: Monthly spend for a high prepaid user in 2006 and 2007 [Source: Network Strategies]Monthly spend for a high prepaid user in 2006 and 2007. Source Network Strategies



Notes for analysis of monthly spend:

  • prices include GST (at the rate relevant to that country) and are in New Zealand dollars
  • Australian prices were converted to New Zealand dollars using 2005 Purchasing Power Parity (PPP) rates sourced from the World Bank
  • all plans were current as at 6 March 2007
  • 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 OECD report: Revised OECD Telecommunications Price Comparison Methodology, July 2006. The OECD revised the structure of the baskets in 2006 to take into account more up-to-date usage patterns. Note they differ from those used in last year’s analysis, which were sourced from European Electronic Communications Regulation and Markets 2004 (10th Report), 2 December 2004, Annex 3 Market Overview.

March 2007


Copyright © 2007 Network Strategies Limited

 
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