John Stanton, Chairman of Trilogy which is the major holder of 2degrees Mobile, has been in New Zealand these past couple of days. This morning addressed a gathering of business leaders in Auckland – surprisingly well attended considering the time of year, though you could see the moths flying out of some of the business suits.
He’s an immensely successful guy who’s made his pile by taking on monopolies and duopolies in the wireless industry. His address covered everything from the current plight of Haiti where he has business interests, to the potential for location-based mobile services, to his philosophy on business.
One interesting observation was the low level of use of mobiles in New Zealand, which he puts down to high prices. ARPU in our market is similar to most countries, he says. But tellingly, the number of minutes we each use our mobiles monthly is around 110-114 minutes – way below the world average. In other words, we pay world prices but get far less service in return.
Are we surprised?
His comments remind me of a very apt observation by Graham Walmsley of Call Plus, speaking to a Commerce Commission conference on Mobile Termination Access last year. “Market failure,” Walsley said, “has led to us having conversations with people over the phone that start with ‘I can’t talk now, I’m on mobile.’”
Stanton is understated and diplomatic. He resisted being drawn about specifically what “plan B” might emerge from 2 Degrees if next month’s Termination recommendations go the wrong way. But he came across as tenacious, here for the long haul, and not accustomed to rolling over and going away.
He also noted persuasively that the low amount of usage New Zealanders get for their monthly fee is a significant deterrent to economic growth.
It’s a pity the Maori investors have gone a bit cold on their investment in mobile. But we are lucky Trilogy is holding firm. Its crucial that the Commission and Minister get the MTR decision right. The smart money is on an announcement in the first week of February.