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Wireless broadband's challenge to fibre services is set to escalate, CEO Mark Callander indicated.
Mark Callander (2degrees)
2degrees and Vocus NZ officially became the country’s third-largest telco today, with an annual turnover of $1.2 billion.
But despite the increased scale, CEO of the combined business Mark Callander said 2degrees would retain its challenger mindset and further disrupt the telco market for the benefit of New Zealand consumers.
“2degrees is a well-recognised and trusted brand, now offering New Zealanders access to a world-class mobile network, a national fibre network, as well as energy capability,” Callander said.
“2degrees is a business that is well-positioned for strong growth into the future.”
Key to to that was the telco’s 5G network rollout in main centres across New Zealand and expansion of its fixed wireless product as the cost of fibre fibre increased. Callander announced a new, unlimited wireless 5G broadband offer at an “introductory price” of $65 a month.
“The market has moved on from capped,” he said. “If you want people to adopt technology, you need o remove barriers and this is a good example as a challenger business of what you need to do.”
Fixed wireless services marketed against fibre have been controversial and drawn the attention of regulator the Commerce Commission on numerous occasions both on performance grounds and over the manner in which they have been marketed and sold.
However, services to date were mostly based on 4G wireless rather than 5G.
“Unlimited 5G home broadband just makes sense – with the speeds that 5G offers, people don’t want to be constrained by data caps,” Callander said.
The combined business had a tremendous amount of infrastructure, Callander said, and 2degrees intended to use this to shake up the telco landscape and better serve customers across both mobile and fixed services.
“Infrastructure is great. It’s really, really important. But at the end of the day people buy services,” he said. “Infrastructure is a critical enabler, but what makes this business very unique is we have infrastructure equivalence with Spark and Vodafone.
“It is very, very unusual for a player with 20 per cent market share to have infrastructure equivalence.”
2degrees would push into a range of new market segments and he expected it to take an even greater market share, Callander said. The goal was to win market share through service.
“The country’s businesses and enterprises will particularly benefit from a highly credible third player focused on value and innovation,” he said.
“We have a combined history as challenger brands and market disruptors. Today we have brought together two organisations which for decades have disrupted and challenged the New Zealand telco market, lowering the cost of services and driving product innovation through a relentless customer focus.”
Callander said the first changes customers would notice included new self-service portals and applications designed for seamless interaction with the company, as well as a range of new products.
“Underlying all this is a programme of work to simplify and digitise the business,” he said. “We have a lot of experience of this over the decades, and it will be core to the new-look business and how it meets customers’ needs.”
A new look executive team is also in place but details were not released today. Callander did indicate there had been some attrition in the process with two people leaving the business.
The 2degrees vision of “Fighting for Fair” remained.
“As we move forward, we’ll have a laser focus on award-winning customer service, innovation, and our commitment to bringing competition to Kiwis – from prepaying mobile users, to households, and businesses of all sizes right up to large corporates.”
2degrees had serious growth ambitions aimed to capture further market share through delivering better products, better service, and more innovation, Callander said.
355,000 fixed line customers and 1.5 million mobile customers gives 2degrees 20 per cent market share and plenty of room for growth. For now, however, Spark remains the largest telco in New Zealand followed by Vodafone NZ.
2degrees was sold to managed funds of Australia’s Macquarie Asset Management and Aware Super for $1.7 billion last November. The funds already owned Vocus and Vocus NZ, enabling the merger.
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Tags VodafoneTelecommunicationswireless broadbandVocus2degrees5GsparkMark Callander
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