2degrees came out in March saying it had gained 11 percent of the consumer market since its launch around two years ago. Now it's gunning for New Zealand's business customers with new plans, a new TBWA\ TV campaign featuring a dizzying array of Rhys Darbys and a man strapped to a billboard.
When NZ Marketing talked to 2degrees' chief marketing officer Larrie Moore a while back, he said the plan of attack was to go for the low-hanging, typically pre-paid fruit first, establish a reputation as a company that offered a cheaper, less confusing service and then eventually upsell to the more lucrative post-paid and business customers who typically use more voice, text and data than those on pre-paid.
2degrees has been offering its business service for a few months now, but yesterday marked the official launch and the official statement of intent to offer the 400,000 small and large businesses in New Zealand a better deal.
It follows several months developing the 2degrees business infrastructure, including a team of 70 business sales consultants and 16 retail stores, which will expand to 40 by the end of the year.
“We asked businesses to send in their mobile bills, so we could see how much our plans could save them," says chief executive Eric Hertz. "The results suggest business mobile competition is well overdue, with eight out of ten businesses who responded able to save over 25 percent if they switch to 2degrees Business."
The new offering claims to provide new features its competitors don’t. For example, any business, no matter how small, can have a free calling group between people on the same bill and they can mix and match plan types, so low and heavy users can all be billed together. Every person on the business customer’s bill can have their own wallet of ‘carry over minutes’, along with a bundle of texts and data to use as required, and for $10 extra, the business can add a frequently called number, so everyone in the business can call a landline or 2degrees mobile at no extra cost.
Unlike the mobile virtual network operators that buy mobile coverage off the big players and on-sell it, 2degrees has invested heavily in the creation of its own mobile network so it is better able to offer cheaper deals. As a result of this infrastructure cost, as well as a significant media spend to get the word out after launch, 2degrees reported a loss of $76.8 million for the year ending December 2010 recently with revenue of $107.6 million. That compares to a $51.8 million loss on revenue of $27.3 million for the first nine months of its operation in 2009. But if it can do in the business realm what it has done in the consumer space, that