Calculators are useful things. Or perhaps they were useful things before smartphones came along and made them somewhat redundant (unless you pursue a study/career in maths or science, are in high school or want to write ‘80085’, or '55378008' into the device, or these 251 other options). But 2degrees is proving other kinds of calculators can be useful, and it’s used its own one which it says reveals Kiwis are paying too much for their mobiles, with millions more dollars in savings possible if they make the switch to a different provider, aka 2degrees.
The online mobile plan calculator by Special Group launched earlier this year to help consumers compare their current pay monthly mobile plan and provider with the savings they could make on a 2degrees Pay Monthly plan, according to a release.
It’s not too dissimilar to the What’s My Number programme, which aims to increase retail competition by creating more informed and active electricity consumers, run by The Electricity Authority, the Ministry of Consumer Affairs and Consumer NZ. Or for that matter, Consumer NZ’s telecommunications comparison website which cut through the maze of packages on offer, with Telme.org.nz providing comparisons for telecommunications and ISPs, covering internet, landline, mobile, TV and mobile broadband services.
After five months online, and tens of thousands of comparisons by consumers, the 2degrees calculator totaled potential savings of at least $6.85 million, the release says. “Of those who used the calculator, 65 percent found they could make savings on their Pay Monthly account which, on average, totaled $372 per year per person. In addition, many customers could also get an average of 2GB more data per month by switching to 2degrees.”
However it should be noted the figures 2degrees has provided only relate to pay monthly plans, so individuals with business plans on their phones don’t have much say on the matter, neither do those on pay monthly plans under $29.
And although typically considered intrusive or annoying, 2degrees got consumers using the calculator through banner ads, of all things. The test could be taken right from the ad, rather than being redirected to its website.
2degrees CEO Stewart Sherriff says the results raise questions about how competitive the mobile sector really is.
“A lot of Kiwis are still paying far too much for their mobile – in some cases as much as $1,500 per year. We developed the calculator to show people the value in our plans, but even we were surprised by the amount people are paying each month when there are better deals available,” he says.
He says the real question is why people aren’t switching when such significant savings are possible.
“We know from the latest Commerce Commission industry data that a lot of pre-pay customers switch to get better value but there is still a lot of consumer inertia in the pay monthly and business sectors.”
There could be a number of reasons, he says. “They may be locked into old legacy plans, worried about what their early termination charges might be or maybe they just haven’t the time or energy to shop around and make the switch.”
He says 2degrees has invested heavily in advertising that reminds everyone they can take their mobile number with them, introduced plans that allow people to bring their own mobile, built our own nationwide network and won numerous awards for service. “Whatever the reason people choose not to move, it is costing them more than it should and that’s concerning. People owe it to themselves to shop around.”
Sherriff says 2degrees is working with the Commerce Commission to expand its monitoring programme, so there is more granular evidence of the amount of switching and factors that stop people taking a better deal. He says the increasing reliance on mobile, especially for data, means staying on old pricing plans can lead to consumers and businesses missing out.
“It’s not just about the price, there is also significantly more value to be had thanks to innovations such as Carryover, Share Everything and unlimited calling to New Zealand and Australia.”
He says the commission needs to ask why the number of people switching providers is so low and what should be done to promote competition in these markets.
“The commission has indicated that it is currently monitoring markedly high concentration levels in the business segment of the mobile market but we are yet to see it take any further action.”