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Home / Business / Companies / Telecommunications

Third contender adds spice to mobile phone war

John Drinnan
By John Drinnan
Columnist·NZ Herald·
11 May, 2009 04:00 PM4 mins to read

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2degrees chief executive Mike Reynolds with the company's new logo

2degrees chief executive Mike Reynolds with the company's new logo

It is tempting to call it a phoney war.

Before World War II, the great powers of Europe had declared war on one another, but neither side was committed to their attack.

In New Zealand, telecommunications marketing hostilities have escalated to skirmishes in the last days of Vodafone's 3G marketing
monopoly with internet-friendly 3G mobile phone services.

Last week, Vodafone complained that Telecom's new XT network was interfering with its signals.

In an out of court settlement Telecom put its marketing onslaught on hold for two weeks.

Yesterday, a new force, 2degrees - formerly known as New Zealand Communications - stepped onto the field.

2degrees, whose phone number will have the prefix 022 and which has been in the background for several years, announced plans to be up and running in August.

Chief executive Mike Reynolds said the company had spent $250 million over 10 years building up its mobile phone network.

"There is no other comparable country that has to suffer such poor value in the mobile market and that can be attributed to a lack of a vibrant competitive environment," he said.

"I don't fear them [Vodafone and Telecom] but I respect them."

2degrees is still building its network and beyond that vague date it is keeping its strategy top secret.

Yesterday was an introduction - to get noticed before hostilities lead to marketing "noise" closer to Telecom's new May 29 launch date.

Reynolds did not even hint at the brand values or marketing focus, let alone detail how it would compete with the two warring telcos.

Telecom and Vodafone could head it off if it announced their plans too early.

The Telecommunications Users Association of New Zealand expects Vodafone and the Telecom XT 3G mobile network will compete through branding.

2degrees sales and marketing boss Larrie Moore dismissed a suggestion that on overseas experience a third player might be expected to attract around 6 per cent.

The company is owned by US-based Trilogy International, the Hautaki Trust, and two private equity funds.

Meanwhile, Telecom and Vodafone - dominating the wider telco market and mobile phones respectively - both depict themselves as "challenger brands".

Telecom won the public relations skirmish depicting Vodafone as an aggressive incumbent in the 3G market trying to muscle out a competitor.

One senior Vodafone manager - who said that Telecom had known about interference problems and chose to ignore them - even suggested going through with the court case was an elaborate public relations strategy - a notion dismissed by Telecom.

Yesterday, Vodafone marketing director Mark Rushworth insisted that the company was still a challenger brand, marketing new and innovative products. While it currently controls 3G - overwhelmingly for young consumers - it only made up 30 per cent of the total NZ telecommunications market. It was not focusing on its own marketing on Telecom's push. "This is their launch, not ours - we have had 3G mobile five years," he said.

Beyond the phoney mobile phone war, the arrival of two-way and then three-way competition is focusing attention on marketing teams.

Rushworth heads the assault for the New Zealand arm of the world's largest phone company.

At Telecom, the launch of XT is integral to the company being lifted out of a hiatus with a new team, with director of mobile, US import Paul Hamburger, a former chief commercial officer of Cable & Wireless and a former Vodafone NZ executive, Craig Herbison, Telecom general manager of brand. 2 Degrees is headed by Reynolds, a former president of the StarHub Group and Larrie Moore, a former head of brand and consumer marketing at Vodafone NZ.

NZ Communications' 2degrees website

Discover more

Opinion

What do make of the 2degrees' experience so far?

14 May 12:14 AM
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