Thursday, June 25, 2009

Evidence of Vodafone and Telecom duopoly found by 2degrees

By Benedict Wee

We're still a ways off from hearing about new mobile telco 2degrees' mobiles and prices plans but it seems like they've keep run into barriers while trying to set up their network.

With Telecom resorting to bullying tactics and 2degrees leaving the self-regulatory forum that promotes fair competition between telcos claiming unfair bias from the three big service providers (Telstra, Vodafone and Telecom), the new company hasn't exactly gotten the warm Kiwi reception that this country is famous for.

To add to the list of the unfair advantages the current telcos have right now, 2dgrees has uncovered evidence of a duopoly between the two major companies; Vodafone and Telecom.

2degrees had commissioned a report (which was carried out by Phoenix Research) to survey calls and texts that began and terminated on the same network (also known as 'on-net' mobile traffic) amongst students in Auckland in September 2008 and Dunedin in May 2009.

What they found out was that rather than providing competition between the two carriers in each city, they have divided the regions between themselves with Vodafone dominating traffic in Auckland and Telecom in Dunedin. How much traffic did they dominate?

For Auckland students on Vodafone:
  • 93% of their calls were made to another phone on the same network
  • 96% of their texts were sent to another phone on the same network
For Dunedin students on Telecom:
  • 81% of their calls were made to another phone on the same network
  • 90% of their texts were sent to another phone on the same network
As for the market share of the two telcos in the different regions:
  • 97% of Auckland students who were surveyed are on Vodafone
  • 85% of Dunedin students who were surveyed are on Telecom

The research was done between 120 students in each region which were spilt equally between venues and call/text data collected was from logs stored in students' phones with Auckland results being final and Dunedin being indicative.

If the research is true it would mean that Telecom and Vodafone might have an under the table agreement to dominate a respective region thus allowing them to charge whatever price they want on their calls without needing to compete with the other telco. This would also explain why calls/texts to other carriers cost extra: they want people to use the provider that controls that region.

Looking at this research you can tell that the people who suffer from this tyranny is us, the consumer. Without actual full-on competition telcos have free reign to charge whatever they want on calls/texts/data and take their time to bring mobiles which the other parts of the world had months before while creating ridiculously expensive contracts for subsidized mobiles. It's the same problem with power, they're shortchanging us and taking our hard-earned money. We do not have to put up with this.

2degrees News


  1. Wondering how Telecom and Vodafone are preparing for the exodus?
    I know I'm moving regardless. Not because I'm a fanboy, but Vodafone support is crap and Telecom seems to do their best to trick people into thinking their deals are good. Black & White (which run on Vodafone infrastructure) are probably the best in terms of service (although Australian accents kind of surprised me) except for you cant find out how much money you have spent with out ringing them up and talking to someone.

    Ah well,
    Hope this doesnt go ass up.
    Especially with Rhys Darby in there as possible manager.

  2. I know a bunch of people who feel the same way too. We're all waiting for our free SIM cards to arrive and anticipating the price/plans they'll announce but we're also afraid that we'll have another copycat on our hands with similar prices.