Consumer Watch: Unlimited data plans explode

By Susan Edmunds

Tough competition between broadband providers sees prices slashed

Telecom has about half the country's broadband customers and where it goes, other providers have to follow. Photo / Thinkstock
Telecom has about half the country's broadband customers and where it goes, other providers have to follow. Photo / Thinkstock

Intense competition in the Kiwi broadband market is proving a boon for consumers.

This month, Telecom and Vodafone began offering unlimited data plans (at $109 a month), so users can download as much content as they like without incurring extra charges or having their broadband speeds cut.

On Thursday, Slingshot responded by cutting the cost of its unlimited offer from $109 to $89 a month.

Slingshot spokesman Taryn Hamilton said data use had doubled in the past 12-18 months as people started using the internet more, and data-heavy websites and apps became more common.

There were a growing number of "power users", people who watched television online, played games and downloaded content, he said. "These people are flocking to unlimited. It gives price certainty, and allows people to use data without thinking about it, or being worried about the cost."

Vodafone's head of fixed line products Steve Jackson said customers were encouraged to consider unlimited plans because it took away the risk of extra charges. Half of its sales are for its 80GB per month plan, which costs $85 a month.

Peter Griffin, of the Science Media Centre, said the unlimited deals were a sign of a shifting market.

Telecom has about half the country's broadband customers and where it went, other providers would have to follow.

"It's just a matter of time before people don't even think about how much data they have to use."

Telecom chief operating officer Jason Paris said the company had already sold a few thousand unlimited plans.

"It's going gangbusters."


It's just a matter of time before people don't even think about how much data they have to use.
Peter Griffin, of the Science Media Centre

But Griffin warned the unlimited connections might not be what people expect. "What's important then is what is the internet provider doing to manage that traffic? If people are using massive amounts, are they going to limit some of the types of applications that can be used over a flat rate plan or is it a free for all?"

Some providers say they will limit the speeds of certain types of downloads, such as peer-to-peer, during peak periods.

Paul Brislen, chief executive of the Telecommunications Users Association of NZ (TUANZ), said all internet service providers were required to disclose the details of their broadband offers under the code of practice. Consumers should check their websites for how each plan worked. But unlimited packages were a good deal for many consumers, he said. "If you're at all in doubt [about how much data you need] more is better than less because the overuse charges can be horrendous."

These are often charged at between 50c per GB and $2. You can get a good deal by looking for added extras.

People should always look for sweeteners, particularly if they were able to bundle their broadband, phone and mobile accounts with one provider, Griffin said.

If not with an unlimited plan, deals such as Snap's offer of unlimited YouTube for $5 a month may appeal. Slingshot's global mode, which allows New Zealanders to access international sites they usually would be denied access to, such as Netflix, is also appealing. And phone calls have become cheap if you know where to look. Slingshot offers $16 a month for 100 hours of calling anywhere in New Zealand, $21 for New Zealand and Australia, $31 a month for 100 hours to 60 other countries and $2 a month to get 5c calls to any mobile in India.

Brislen said the national and NZ mobile call offers would be the best deals as most people now use Skype for free international calls.


Do the maths

To make sure you're getting the best deal, work out the amount of data you use and the number of minutes of phone calls you make on your landline and mobiles.

You can do this by looking at a previous bill.

A single person living alone who uses the internet only in the evening for emails or online shopping may need only 40GB of data a month.

However, a family with teenagers using lots of data to watch television programmes, play games and download content, would need at least 100GB. Consumer's site telme.org.nz can be used to compare plans. It asks about things such as connection speeds and your usage habits, and includes lesser-known providers.

Telme and Canstar Blue allow you to compare customer satisfaction ratings to give an idea of reliability.

TUANZ's Paul Brislen says any provider you sign up with should be a member of the Telco Dispute Resolution service.

"If you have a problem, phone companies can be terrible at answering the phone.

"The TDR will step in and resolve it."

- Herald on Sunday

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