Daily Archives: September 7, 2009

Are Kiwi’s getting ripped off for Cell Phone charges (UPDATED)

Well according to the latest report by the OECD, no?

Seen adds like the above locally, lately?

Yup, thought not.

I’m acutely aware of the cost of mobile phone bills, like all mobile agents or other sales representatives as well. One of the most interesting things though in our market is the almost complete absence of calls to a mobile from members of our older generations, retirees, etc.

Over the last month or so I’ve been reading media coverage lately of the issue. 2 Degrees helped bring it to the surface again as did the Commerce Commission too.

But dig a little deeper and the reality is very different. Bear with me on this one….

So it was with interest I came across a recent Sunday Star Times full page article entitled “Crossed Lines” (SST August 30, 09 BUSINESS – D3)

It started out, “laid on sandwiches & coffee for journalists in the……” and went on to say that with the recent introduction of a 3rd competitor to the NZ mobile phone market, he (telco CEO) wanted to ensure the media had their facts straight. The third paragraph started “armed with graphs & figures, he (the telco’s CEO) set out to show NZ’s mobile phone prices are not high when compared to international standards.”

Booey!  What rubbish!

Some internet writers earlier had differing opionions.

At the bottom of the article was a chart supplied to the journos by said telco.

Meanwhile over at the OECD, here’s are a couple of spreadsheets named low user –  here (360 calls per year of voice calls, 396 SMS; eight MMS), medium user – here (780 calls per year of voice calls, 600 SMS; eight MMS) , and high user – here (1680 calls per year of voice calls: 660 SMS; 12 MMS). Out of these somehow the telco put together the chart.

This above2004 chart shows NZ off to the far right.

Meanwhile this chart shows us more middle of the pack….. “better off than before?”

Both of these charts were depicting what are termed OECD Rankings, & chart prices for what they term “medium users.”

Now these chart differs from the aforementioned linked charts I described above (more specifically they use percentages). They say, and I’m not casting any aspersions here, lobbyists & spin doctors make an income out of taking statistics / figures and making it say exactly what they want it too.

Now it could just be that this special, what seems like a journo only pack mentioned above, could be just the ticket and may indeed contain said chart above, but not being a journalist I guess I won’t be finding the answer to that one anytime soon.

Anyway back to the OECD report mentioned seemingly so positively in the article above…….along with the coffee & sandwiches.

Surprise, surprise there has been much debate about the methodology used, regarding how they compiled this data.

Witness this…

The tariff assumptions also appear flawed with the price per month for a medium user at around US$53 per month using only 63 minutes, 50 SMS messages, and under one MMS per month. The CTIA’s own analysis has put the cost for the average subscriber at US$50.07 with users utilising 760 in/outbound minutes and 400 SMS per month. Plans from low-cost providers such Sprint’s Boost unlimited prepay service, MetroPCS and Tracfone offer unlimited voice, text and some web use for around US$50 per month.

And…..

The CTIA, the wireless industry association in the United States offered a swift rebuttal of the analysis, noting that U.S. customers enjoyed “the lowest per minute rates”. The CTI notes that although the high use basket as defined by the OECD includes 1,680 minutes, United States users average 9,600 minutes—though given the North American billing system this is counting both incoming an outgoing calls.

And also then goes on to state

The average U.S. user has a calling profile some six times the size of the medium-use basket

After a bit more than 10 minutes research, covering the data shown here…..

and after converting monies to local currency have come up with a chart showing the cost of an average cell phone call over this subset.

FULL SIZE CHART HERE.

And as far as us in NZ having mobile phone prices not high when compared to international standards …..well make up your own mind.

I feel the only real US ones to use as equivalents are the “unlimited” plans because you don’t then have to worry amount the minutes of incoming calls chewing up your allowance.

And yes the fine print ……………… well in some cases you probably have to have your home phone with the carrier, in other cases the carrier may not offer 100% coverage of the country (surely not going to be equivalently related in such a geographically small country like NZ).

Some, like T-Mobile mention their own branded codewords/terms like, for example in T-Mobiles case “Whenever Minutes® ” …..and although I don’t have a whole week to investigate every single plan relevant to every single location in the US, you can take it that when asked for a location I used that ole favourite “90210.” So it may be you are limited to other users on that same Network carrier, although hopefully someone stateside can either confirm or deny this for me.

Either way, with only 2, sorry 3, main mobile networks in NZ, drawing parallels with overseas telco’s (even though the local 3 carriers would comment otherwise) is perfectly, to my way of thinking,  legitimate for comparison purposes.

It would just make business so much easier to conduct here downunder…..but more importantly it would definitely lift productivity.

Its got nothing to do with the price (as the Aussies show below) its all to do with how many minutes airtime your money buys you. That ole word again, VALUE.

NB:      Difficulties with the analysis

some plans also mention plus applicable taxes and fees, so some further extras may apply

most of the prepay plans expire after 30 days, not 12 months before expiry like here in NZ

Canadians/ US users generally pay to receive incoming calls too, they may also have a $35 or similar activation charge.

Australia – well practically impossible to decipher their call cost structure (as above) based on the “taxi” charging method, where you pay a flagfall amount, then a rate after that.

DISCLAIMER – It must be just as confusing for a journalist to get a handle on the way pricing plans are described along with the multitude of “non plain English” terms they use, so if I’ve got some of the plans  wrong, just to let you know it wasn’t planned that way. They are as up to date at the time of putting this post together as I could make them.

UPDATE 12 noon Monday 7th Sept 09

re the Dom Post article mentioned in my comment below comes this “pearl-er.”

Hundreds of millions of dollars are at stake. Vodafone said “……. would cut its revenues by $500 million over five years.”

What does that mean? – putting the money back in our pockets instead?