2degrees has notched up its millionth customer just three years after launching its network and breaking Vodafone and Telecom's mobile market duopoly.

Chief executive Eric Hertz announced the milestone today, saying the company had grown a little faster than expected, with 21 per cent of New Zealand mobiles now connected to 2degrees.

In March, the company put its dollar share of the $2.2 billion mobile market at about 8 per cent. Analysts have noted many of its customers are relatively low-value prepay customers.

But Hertz said a third of its customers had ported their 021 or 027 numbers to 2degrees, indicating at least that number were regular mobile users who used 2degrees as their main provider.

The company has also been moving up the value chain. Hertz said 2degrees now served the business market, was one of the "approved providers" to government, had 35 retail stores and employed more than 700 staff.

"More than a million New Zealanders have made it clear they wanted choice and competition in the market," he said. "Seeing three players compete to win - and keep - customers is a fantastic outcome for all mobile users.

In June, 2degrees posted a total loss of $92.6 million for 2011, up from $73.9m the previous year, taking its accumulated losses to $247.4m. IDC Research analyst Glen Saunders said at the time that the losses would have been expected and the company could take heart from its strong growth.

He anticipated then that signing up its millionth customer would be a major milestone.
"Then it is just a case of getting [more] money out of those customers. Overall I think they would be pretty happy with where they are at," he said.

In its last annual monitoring report, the Commerce Commission said the price of mobile calls was continuing to fall, mainly driven by a drop in the price of calling between networks.

"This has brought the price of these calls closer to the average price for on-net calls, which is already relatively cheap", it said.

- © Fairfax NZ News