Mobile prepaid rates: New Zealand for SMS, Australia for voice
if you use your prepaid mobile primarily for text messages then welcome to New Zealand. Otherwise, you will find that the Australian operators offer better value for money
Want to know more about this topic? Contact the author Nina Matthews
It has been two years since we last undertook our comparison of New Zealand and Australian prepaid mobile tariffs. Several changes have occurred since then:
- New Zealand has gained a third mobile operator 2degrees
- Vodafone and Hutchison (3) in Australia have merged although as at 10 November 2010 they still offered different prepaid mobile plans
- the OECD has released an updated series of mobile usage baskets, which specify different levels of usage, including a profile considered to be that of a typical prepaid customer (40 calls and 60 text messages per month) and an SMS-intensive profile (8 calls and 400 text messages per month).
- the OECD baskets now include the estimated effect of nominated number plans, where discounted or free calls and texts are provided to a few pre-specified numbers.
So, given all these changes what are our conclusions about prepaid rates in Australia and New Zealand?
- Previously, prepaid tariffs have tended to differentiate between calls to a fixed line, the same mobile operator (on-net) or a different operator (off-net), and depending on time of day. In this analysis we have found that all the prepaid plans in both New Zealand and Australia have gone to a single tariff rate for all types of call. The only exception to this is for 2degrees magic top-up which provides discounted prices for on-net and fixed calls and on-net SMS for 30 days following a minimum NZD20 top-up.
- In New Zealand, new entrant 2degrees is significantly cheaper than Telecom New Zealand and Vodafone New Zealand for all usage baskets. With the exception of the SMS-based usage basket, this relies on a minimum NZD20 top up per month to take advantage of the magic top-up offer.
- Whilst two years ago nearly all of the operators offered nominated number plans, now all the Australian operators except Optus have dropped these plans. In New Zealand Telecom and Vodafone have retained these plans, but 2degrees has not implemented them.
- Bulk text discounts, which are offered by all operators except 3 Australia, are still an important aspect of prepaid pricing plans.
- New Zealand is still lacking prepaid plans that cater for moderate to high volume usage with no cap plans offered, and relatively few bonus minutes included in plans. In the case of very low-volume voice usage, such as for the SMS basket, some of the New Zealand plans work out cheaper than the Australian ones due to the combination of long-term top-up credit expiry times (one year in New Zealand, compared with typically one to two months in Australia), and the bulk text add-ons.
- Comparing just the New Zealand operators has shown the importance of flexibility in any add-ons to prepaid offers. For example, although Vodafone New Zealand offers text and nominated number add-ons to its Supa Prepay plan only, these add-ons are very restrictive (text messages can only be sent to Vodafone numbers, and nominated numbers must be Vodafone mobiles). The effect of this is that in every usage basket the Supa Prepay plan is the most expensive option, costing more per month than Vodafones Simply Prepay plan, which has no add-ons, but has lower per minute and SMS tariffs. Conversely, even though Telecoms One Rate prepaid plan has higher tariffs, monthly spend for this plan consistently came out cheaper than for the Vodafone Simply Prepay plan. This is due to the flexible nature of the Telecom add-ons, where nominated numbers could be either fixed lines or Telecom mobiles, and bundled text messages could be to any network. Also, 2degrees, which combined both low tariffs and flexible add-ons, consistently delivered the lowest spend of the three New Zealand operators.
How do the monthly spends compare? Starting with the OECDs typical prepaid usage basket, we can see that the original two New Zealand operators are by far the most expensive, with the cheapest Vodafone New Zealand plan requiring NZD52 per month for this level of usage, whereas the most expensive Australian operators charged only NZD31 per month and the cheapest only NZD15 per month (Exhibit 1). On the other hand new entrant 2degrees in New Zealand is the second cheapest operator, requiring NZD22 per month for this level of usage.
Next, we looked at primarily SMS-based usage, with very few voice calls made per month, a profile often associated with prepaid users (Exhibit 2). Here we see that 2degrees and Telecom New Zealand lead the pack in terms of affordability, requiring NZD17 and NZD20 per month respectively for this level of usage. This is thanks to cheap bundles of high volumes of text messages to any network for a small monthly fee. Vodafone New Zealand, however, is at the other end of the scale, due to the restrictive nature of its text bundle, which only includes text messages to Vodafone New Zealand mobiles. For all the Australian operators the monthly spend based on this usage profile is very similar, due to the fact that the plans that include extras like text bundles or capped plans tend to have a minimum top-up of AUD30 with a 30 to 60 day expiry period.
Both of the above user profiles were for fairly low-level mobile use, which is typically associated with prepaid users, however, what happens for more frequent callers (Exhibit 3)? Looking now at a user who makes 100 calls and sends 140 text messages per month we see that Australia is now firmly in the lead thanks to the capped monthly plans, which offer a large amount of bonus credit for a fixed monthly top-up of a specified value, generally of about AUD30 minimum, with the bonus credit varying depending on the top-up amount. In this case the monthly spend for Australian operators varies from NZD30 to NZD41, whereas the monthly spend for New Zealand operators varies from NZD65 for 2degrees up to NZD131 for Vodafone.
Exhibit 3: Monthly spend for a high
level of mobile usage [Source: Network Strategies]
So in general, if you use your prepaid mobile primarily for text messages, making only about two voice calls per week then welcome to New Zealand. Otherwise, you will find that the Australian operators offer better value for money with their prepaid plans.
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 Purchasing Power Parity (PPP) rates sourced from the World Bank.
- All plans were current as at November 2010.
- The prices for each operator represent the plan resulting in the lowest monthly spend.
- OECD mobile baskets of usage were sourced from the report: Revision of the methodology for constructing telecommunications price baskets, 18 March 2010.
Copyright © 2011 Network Strategies Limited