Network Strategies logo - click to go to home page home | contact us | site map | ©
 
 

– about us

+ consultancy 

– workshops

– industry comment

– company news

Trans-Tasman mobile data wars

…New Zealand customers suffer with pitiful data caps for mobile broadband, whereas Australian customers who want to roam to New Zealand with their mobile handset and use data may be in for a shock when the bill comes in.

Want to know more about this topic? Contact the author Nina email usMatthews

Following our friendly trans-Tasman comparisons of prepaid offerings for mobile voice and SMS, we have now turned our attention to mobile data. We have compared local costs for mobile broadband designed for use on a laptop or tablet, and for Internet access via a mobile handset between NZ and Australia, and found that New Zealand customers suffer with pitiful data caps for mobile broadband, whereas Australian customers who want to roam to New Zealand with their mobile handset and use data may be in for a shock when the bill comes in.

Different monthly usage levels have been used for mobile broadband and mobile handset Internet access (Exhibit 1), as data allowances differ widely between packages designed for the two types of devices. We have also compared mobile data roaming charges between New Zealand and Australia.

Exhibit 1: Mobile Internet access baskets of usage [Source: Network Strategies]

Mobile broadband Internet on mobile handset
Low use 1.5GB 50MB
Medium use 6GB 200MB
High use 500MB
Note that a high use basket has not been included for mobile broadband as the majority of New Zealand data allowances as at November 2012 are significantly below 6GB.

Our first observation is that for both mobile broadband and Internet on mobile handsets, the Australian operators offer more generous data allowances than the New Zealand ones (Exhibit 2). The relatively low data allowances on mobile broadband plans from Telecom and Vodafone in New Zealand have a rather dramatic effect on the monthly cost of this type of mobile data with a medium level of usage, due to high excess data costs.

Exhibit 2: Data allowance ranges for all New Zealand and Australian operators for both mobile broadband and Internet accessed on a mobile handset, November 2012 [Source: operators]

  Mobile broadband Internet on mobile handset
  New Zealand Australia New Zealand Australia
Prepaid data allowance range 100MB – 12GB 300MB – 15GB 50MB – 600MB 30MB – 4GB
Postpaid data allowance range 500MB – 12GB 1GB – 20GB 50MB – 1GB 100MB – 8GB

In most cases for both mobile broadband and Internet on a mobile handset, the Australian operators offer a plan with lower monthly spend than the New Zealand operators for all usage levels, with a few notable exceptions. For low level mobile broadband use, 2degrees in New Zealand has the lowest monthly cost, for data use within their specific mobile broadband zones. These zones currently cover a number of major cities and towns, including Whangarei, Auckland, Hamilton, Tauranga, Rotorua, Taupo, Gisborne, Napier, Wanganui, Palmerston North, Levin, Masterton, Wellington, Nelson, Blenheim, Christchurch, Queenstown, Cromwell, Dunedin and Invercargill. This means that those living on the West Coast, in Taranaki or north of Whangarei are out of luck for now. For a low level of Internet access on a mobile handset, the cheapest prepaid offering on Telstra in Australia still results in one of the highest monthly costs, even though Telstra has some of the smallest data caps.

There is often a large difference in monthly cost between the cheapest prepaid and postpaid plans for each operator, however neither one nor the other is consistently cheaper.

When comparing mobile roaming data per MB costs between New Zealand and Australia and vice versa the costs vary significantly, with Australian operators being both the cheapest and the most expensive. The three operators with the smallest differential between local and roaming per MB data costs were the cheapest, whereas the other three operators had a very large premium put on roaming data. In addition, roaming from Australia to New Zealand using a mobile handset rather than a laptop for Telstra or Optus customers is by far the worst case scenario for data costs.

The most important thing for whatever type of data you are wanting to use, is to choose a plan that is appropriate to your level of data usage. Excess data fees when you go over the allowance can add up very quickly, but at the same time there is no point paying a big monthly fee for a high data cap plan if you are only going to use a small amount of data. Unfortunately figuring out data usage in the beginning is easier said than done. All of the operators in both New Zealand and Australia offer some way of monitoring your data usage over time, and some even offer a calculator to use in advance of purchasing a plan to estimate what your monthly usage may be. In addition, Vodafone and 2degrees in New Zealand offer forms of spend control, with 2degrees allowing customers to set a maximum monthly spend, and Vodafone offering a “data angel” service, which notifies customers when they have reached 80% then 100% of their data usage, with options then offered to buy add-on data, to use the casual data rates, or to stop data usage completely until the next billing cycle.

Our results are discussed in more detail below.

Mobile broadband results

For low mobile broadband use of 1.5GB per month, 2degrees in New Zealand comes out the cheapest thanks to their large mobile broadband data block of 12GB that can be purchased, which remains valid for three months, coming in at NZD16.50 per month. However, it should be noted that mobile broadband on 2degrees is only available in specific mobile broadband zones, outside of which much higher access fees apply for 3G access. The cheapest plans from the three Australian operators then have the lowest monthly cost for this level of usage, with prepaid access from Optus being the cheapest overall, at NZD12.75 per month. Vodafone and Telecom in New Zealand have the highest monthly cost for this level of usage being at least NZD50, with postpaid access from Telecom being the most expensive overall at NZD60 per month.

Exhibit 3: Monthly cost for cheapest plan per operator for low level of mobile broadband usage, November 2012 [Source: Network Strategies]
Monthly cost for cheapest plan for low level mobile broadband use. Source: Network Strategies.

For medium level use of 6GB per month, 2degrees in New Zealand still remains competitive with the Australian operators, at least within the 2degrees mobile broadband zones. The monthly spend for 2degrees is NZD50, whereas the monthly spends for the cheapest plans of the Australian operators range from NZD28 to NZD88. The low data allowances offered by Telecom and Vodafone in New Zealand have a significant effect on monthly cost for this level of usage however. Both these operators allow an additional data block to be purchased once the initial monthly data allowance has been used up, however in many cases this still does not bring the total data allowance up to 6GB, and therefore excess per MB rates are charged. For the worst case scenario of postpaid mobile broadband from Telecom, this results in a NZD400 monthly spend.

It should be noted usage in excess of the monthly data allowance is handled differently by the Australian operators. Telstra throttles the speed instead of charging excess for most of their mobile broadband plans, whereas Optus and VHA have an excess per MB charge without the option of purchasing an additional data bundle first. This has not been an issue for monthly costs for this medium level of usage, however, as the much more generous data allowances of the Australian operators mean that excess charges are generally not required, in addition the excess charges are far lower than that of the New Zealand operators.

Exhibit 4: Monthly cost for cheapest plan per operator for medium level of mobile broadband usage, November 2012 [Source: Network Strategies]
Monthly cost for cheapest plan for medium level of mobile broadband use. Source: Network Strategies

Internet on mobile handset results

The three monthly usage baskets for Internet on a mobile handset are much lower compared to the data allowances for both New Zealand and Australian operators, so there is not the issue with excess usage charges that was seen for mobile broadband. This does of course assume that the plan or data add-on chosen by a user is appropriate for their level of usage. The cheapest monthly charges shown in most cases are for data add-ons, in which case for postpaid users the actual monthly charge for a user would be higher, as the add-ons require the user to have subscribed to a base plan initially. However, the purpose of this exercise was to concentrate on data prices, not on general plan prices, which include minutes and text message allowances as well.

For low level use of 50MB per month, the cheapest offerings from the Australian operators are in general still less expensive than the New Zealand ones, with the exception of Telstra’s prepaid offerings. The difference, however, is relatively small, in many cases only NZD1 per month. The cheapest offerings from the three New Zealand operators have almost identical monthly costs for this usage level, with the exception of Telecom’s postpaid offerings, which do not include as small a data add-on as do the other two New Zealand operators.

Exhibit 5: Monthly cost for cheapest plan per operator for low level of Internet usage on mobile handset, November 2012 [Source: Network Strategies]
Monthly cost for cheapest plan for low level of Internet use on mobile handset. Source: Network Strategies

For medium level use of 200MB per month, the cheapest offerings from the three Australian operators still have the same monthly cost as for low level use in most cases, whereas the offerings from the New Zealand operators are in general more expensive, increasing from NZD6 per month up to NZD18-20 per month, with the exception of the Telecom postpaid offering mentioned above.

Exhibit 6: Monthly cost for cheapest plan per operator for medium level of Internet usage on mobile handset, November 2012 [Source: Network Strategies]
Monthly cost for cheapest plan for medium level of Internet use on mobile handset. Source: Network Strategies

For high level use of 500MB per month the cheapest offerings from the Australian operators are still in general less expensive than those from New Zealand operators, with Optus still having the same monthly cost as for low and medium level use. The three New Zealand operators have very similar monthly charges with the exception of 2degrees’ cheapest postpaid offering, which has a monthly charge of more than double that of all the other operators.

Exhibit 7: Monthly cost for cheapest plan per operator for high level of Internet usage on mobile handset, November 2012 [Source: Network Strategies]
Monthly cost for cheapest plan for high level of Internet usage on mobile handset. Source: Network Strategies

Roaming versus local per MB data costs

We have also looked at local per MB data costs versus the costs of data when roaming from NZ to Australia and vice versa. To see the premium put on roaming data we compared the highest per MB charge for prepaid local mobile Internet data against the cheapest per MB charge for roaming data.

One initial observation we made was that the New Zealand operators all had special rates for Australia roaming, whereas only VHA offered specific New Zealand roaming rates.

VHA Australia and Vodafone New Zealand have by far the lowest per MB cost for roaming data, with these costs being similar to the highest prepaid local data per MB cost (the cheapest roaming charge for VHA was NZD0.05 per MB, and for Vodafone was NZD0.10 per MB). 2degrees in New Zealand is the next cheapest, and their lowest per MB roaming cost is the same as their most expensive prepaid local data per MB cost of NZD0.50 per MB. The other three operators however, have significantly higher per MB roaming costs than their local data charges, with the cheapest roaming data charges ranging from NZD0.83 per MB up to NZD2.62 per MB). Note that the cheapest per MB roaming data costs for Optus and Telstra in Australia were for mobile broadband on a laptop rather than Internet on a mobile handset, with the mobile handset roaming charges being much higher (NZD15 per MB for Telstra and NZD20 per MB for Optus).

Telecom New Zealand has recently announced new daily flat rates for postpaid data roaming to start from 21 December 2012, with roaming to Australia to cost NZD6 per day.

Exhibit 8: Cheapest per MB cost of mobile roaming data versus most expensive per MB cost of local mobile data, November 2012 [Source: Network Strategies]
Cheapest per MB cost of mobile roaming data vs most expensive per MB cost of local mobile data. Source: Network Strategies

 

Notes for analysis:

  • Mobile data prices include GST (at the rate relevant to that country).
  • Roaming prices exclude GST.
  • Australian prices have been converted into NZD using World Bank Purchasing Power Parity (PPP) rates for 2011.
  • Prices are as advertised on the operators’ websites as at 20 November 2012.
  • Usage levels were based on Teligen’s mobile broadband baskets of usage as utilised in the New Zealand Commerce Commission’s report International price comparison for retail fixed-line and mobile telecommunications services 2011.

December 2012


Copyright © 2012 Network Strategies Limited

 
about us | consultancy | industry comment | company news
home | contact us | site map