2degrees slashes rates in price war

Photo / Greg Bowker

2degrees launched an aggressive calling plan yesterday that will challenge the prices Vodafone and Telecom are charging.

The mobile carrier has dropped the cost of calls between networks by nearly a third, from 44c to 30c a minute, in a bid to increase its market share.

But Vodafone criticised 2degrees' new plan yesterday, calling it "misleading" for not disclosing how customers are charged.

2degrees, like Vodafone, charges to the highest minute on pre-pay, so if you call someone for 2.3 minutes you pay for three.

Telecom charges to the minute on pre-pay for the first minute and then to the second after that.

Vodafone spokeswoman Michelle Baguley said the everyone100 plan was misleading as customers would not get the full 100 minutes for $30.

The Commerce Commission said yesterday that, when advertising the plan, any failure to clearly disclose that calls are being rounded up to the nearest minute for billing purposes might contravene the Fair Trading Act.

2degrees marketing manager Larrie Moore said that everyone100 was the "best deal" available in New Zealand.

The new plan will also give customers 300 free texts when they top up their credit to $30.

2degrees offers only pre-pay plans.

"Customers are hungry for value. They don't want to have to think about the way they use their phone, or modify their calling behaviour to get a decent deal. People want to be able to pick up their phone and call whoever they want, whenever they want."

Moore said the biggest challenge for a new entrant was raising awareness about what are acceptable prices for voice and text messages.

"People don't know what they are paying. People are accepting high prices."

There are 3.2 million mobile customers in New Zealand and 2degrees has gained over 200,000 since it began operating last August.

In April, Vodafone launched a cheap pre-pay plan, called Talk, for customers calling on Vodafone's network. 2degrees offers the same price across all networks.

Vodafone's plan led the Commerce Commission to backtrack on its recommendations to Communications Minister Steven Joyce.

It had recommended that he accept Vodafone and Telecom's undertakings to not regulate controversial mobile termination rates.

Vodafone has since scrapped the Talk plan.

2degrees has strongly campaigned for regulation of termination rates, saying consumers will ultimately be better off.

The standard rate to call a Telecom phone from a Vodafone phone, and vice versa, is 89c.

The standard rate for Telecom and Vodafone customers to call a 2degrees phone is also 89c.

2DEGREES DEAL
* Calls to any network and landline 30c a minute.
* When you top up $30 you get 300 free texts.
* Only available on pre-pay.
* If you terminate a call, 2degrees will round up to highest minute.