2degrees and Special Group play on polarity to launch new broadband offer

2degrees has managed to secure around 1.3 million mobile customers since it launched in 2009. But if it wanted to play with the grown-up telcos, it knew it needed to become full-service. That became a reality after purchasing Snap internet earlier this year. And after discovering that Kiwis find the various plans and technical jargon fairly confusing, it’s aiming to remove some of the complexity by offering just two plans, something it’s focusing on in its launch campaign. 

Chief marketing officer Malcolm Phillipps half-jokes that it’s not selling data, it’s selling a dream. Whether the internet is a dream or a nightmare is up for debate, but Phillipps says it’s what you make of it. And before launching this very important new part of its business, he says it spent a lot of time researching and talking to customers about their pain points so that it was “answering a consumer need rather than making a me-too response”.

And the main out-take of that research was that there was too much complexity in the market. Hence, the broadband made simple line and the two residential packages based on whether people use the internet a little bit or a lot: 80Gb for $69 and an unlimited plan for $89.

“If you go and ask people what broadband plan are you on, they probably won’t know,” he says. “It’s a low involvement category. Once you’ve done it, you forget about it.” 

New and existing 2degrees Pay Monthly mobile customers will also receive a $10 discount on a bundled package and there are also a number of optional services available – fibre customers can super-charge their speeds from $10 and, if they want to kick it old school, all customers can bundle their home phone with unlimited New Zealand and Australian landline calls from $15 per month. 

Telco marketing is increasingly tied to partners, something Spark has done very well with Spotify and, in a way, by offering sweeteners with its own company Lightbox. Vodafone has deals with Sky and Netflix and 2degrees has decided to shack up with Sky’s Neon as a content partner and is offering customers six months free (after the six months, it’s back to full price, but he says it will keep an eye on take up to see whether a deal is worth extending).

Phillipps says the thing it liked about Neon was the hero content like Game of Thrones and True Detective.  

He says the broadband plans—and the campaign across TV, digital, outdoor and social that splits the nation into two types of people—are a good example of its brand essence: smart ideas simply delivered. And he says there came a time three or four years into its evolution that it started falling into the common telco trap of adding unnecessary complexity. But it “tidied everything up at the start of this year” and simplified its phone plans and this is an extension of that philosophy. 

He says being new in the market gives it the benefit of re-evaluating everything and when you’re a big telco like Spark or Vodafone and have 800,000-900,000 customers on various plans—some of them “grandfather legacy plans”—”you can’t just move them to two”.

Much like its campaign for it mobile plans this year, which aimed to evolve the brand and add a dose of maturity so that it wouldn’t alienate the higher value business and post paid customers, Phillipps says the ad, which was shot by Taika Waititi, is still focusing on real people, but “he’s brought a little bit of personality”. 

“We’re very ambitious. We’re excited about how competitive the offer is and especially how competitive it is for 2degrees customers [its annual statement shows it narrowed its losses to $33.6 million on revenue of $400 million in 2014]. We know our customers will get a better deal by coming with us. We think we can do extremely well.”

He says it needs to build awareness about the fact that it now sells broadband and it will do a lot more through direct and telemarketing with this campaign. The TV ad will play an important role, of course, but he says it needs to get more targeted. So it will be watching the roll out of fibre into different areas and it will need to get better at talking to its own customers about its offers when appropriate.

“It becomes a lot more granular compared to what’s been done in the past.”

​2degrees chief executive Stewart Sherriff says in a release that 2degrees can now offer customers the full communications service they have been waiting for. 

“Today we see one of our key strategic goals come to fruition, providing both mobile and broadband services to our customers. Becoming a full service provider is something our customers have been asking us for, particularly as Kiwis continue to embrace more data intensive lifestyles and move to UFB fibre services,” he says. “2degrees’ purchase of Snap earlier this year has allowed us to accelerate our entry in to the broadband market using Snap’s incredible national network infrastructure. With residential and enterprise customers now able to access 2degrees broadband, and business customers shortly, we are now well positioned to compete in all segments of the market to support our customers’ growing digital needs.” 

Sherriff says another key feature of 2degrees’ broadband is ‘best connection’. 

“We will always ensure customers are on the best possible available connection to their home – even fibre, for no extra cost. And if a customer is already with 2degrees broadband and a better connection becomes available, we’ll let them know and offer them an update for free.” 

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