Prepay mobile price war tipped
A price war may be coming in the mobile market after Telecom slashed its prepay mobile prices almost in half with the introduction of its new mobile brand, Skinny.
Telecom hopes Skinny will take the fight to 2degrees and Vodafone by making its XT network popular among youth, who have largely shunned the network since its launch 2 1/2 years ago.
Skinny customers will pay 39 cents a minute for mobile calls and 9 cents to send texts, the company revealed, compared with its standard rate of 69c for calls and 20c for texts.
It is also offering more aggressive pricing with two prepaid plans priced at $4 a week.
Telecom's goal is to win back young mobile users from Vodafone, which still dominates the $2 billion mobile market – particularly in Auckland – and from previous price leader 2degrees, which has made strong inroads against both companies since it arrived in 2009.
However, Telecom risks cannibalising revenues from its existing 1.2 million prepay mobile customers. It will retain XT's standard plans and prices, but there will be nothing to stop existing XT customers switching to the discount service.
One of the $4 plans, aimed at heavy texters, provides 10 minutes of calls to any network and 750 texts. The other, called Loose Lips, provides 40 minutes of calls and 100 texts.
Both include 10 megabytes of data and customers can buy 120Mb of data a week as an "add on" for an extra $4.
Skinny's low-key launch has caught its rivals off guard.
2degrees was still advertising that it offered New Zealand's lowest standard prepay rates on its website yesterday.
Spokesman Mathew Bolland said it would look for any fish-hooks in Skinny's offers before reviewing that claim.
Skinny (Telecom): 39c a minute, 9c a text
Telecom: 69c a minute, 20c a text
Vodafone Prepay Smart: 49c a minute, 12c a text
Vodafone Supa Prepay 89c a minute, 20c a text
2degrees: 44c a minute, 9c a text