Two-thirds of kiwis still paying too much for mobile

12 August 2015

Kiwis do the numbers - two-thirds still paying too much for mobile

New figures out today reveal many Kiwis are still paying too much for their mobile, with millions of dollars more in savings possible if people change provider.

The figures come from an online mobile plan calculator, 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.

After five months online, and tens of thousands of comparisons by consumers, the calculator totaled potential savings of at least $6.85 million. Of those who used the calculator, 65% 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.

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.

Mr Sherriff 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 – they may be locked in to 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.”

“We’ve 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.”

Mr 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 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.”

Mr Sherriff 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.”

ends

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