More mobile choices for NZ

New Zealanders should have a choice of five mobile companies within weeks, with Australian-listed telco M2 and locally owned start-up Black and White set to join Telecom, Vodafone and TelstraClear in the $2.2 billion market.

M2 and Black and White will supply connections through a "mobile virtual network operator" agreement that M2 struck with Vodafone last year, with M2 providing back- end administration and billing for both services, but will compete separately.

TelstraClear has sold businesses connections to Telecom's CDMA network since November, and last week extended its offering to consumers.

M2 chief executive Vaughan Bowen says its service should launch this month and will be marketed to small businesses with fewer than 50 employees.

The Melbourne firm, which employs 175 staff, last month reported a record net profit of A$5.2 million for the year to June, more than doubling revenues to A$109.2 million. It already supplies landlines to businesses in New Zealand.

M2 would not be a "price slasher", but would offer a "more personalised engagement" than Vodafone or Telecom, Mr Bowen says. An unusual feature of M2 is that customers receive a "phone and fly" rebate of up to 15 cents in the dollar on their telco bills, that they can spend on travel products offered through a sister company.

There can be tax benefits to this arrangement in Australia if the rebates are classed as a gift from a supplier, but the appeal is mainly "emotive", says Mr Bowen. He would not forecast customer numbers, but history in markets like Australia suggests "fresh" MVNO entrants with differentiated services have great success, he says.

"We are working on the assumption Kiwis and Aussies don't think too differently, unless it is at Eden Park."

Black and White founder and ex-Telecom staffer Johnathan Eele also expects to begin promoting his service within weeks, if customer testing already underway confirms it is ready. The British migrant is promising to bring a fresh attitude and more "transparency" to the industry and will not try to differentiate between business customers and consumers.

The 10-person company will sell phones online and may differentiate itself by offering post-paid connections with no minimum contract term. Customers will be treated as "members" rather than subscribers and will call "member services" – outsourced to M2 – rather than customer support.

Mr Eele was responsible for sourcing handsets for Telecom's CDMA network, where colleagues say he developed a reputation as a savvy operator, till he left the company 18 months ago.

Black and White will bring some new phones to the New Zealand market, including the "light and functional" Nokia 6220c handset, which has a 5 megapixel camera, and a Trio smartphone that runs Microsoft's latest Windows Mobile 6.1 operating system.

Mr Eele is not deterred by the fact there are already more mobile phones than people in New Zealand. "I am getting a lot of feedback that people are looking to change, but moving from Vodafone to Telecom and vica-versa just hasn't seemed to have delivered a lot."

Both M2 and Black and White will use the "028" prefix, but customers will be able to port their Vodafone or Telecom phone numbers to either telco.

- © Fairfax NZ News