Introduction

With two cellular phone networks in the country, New Zealanders can not be said to be overwhelmed with supplier choice. Indeed, the cosiness of the Telecom-Vodafone duopoly is commonly understood to be the reason we pay among the highest rates for mobile phone calls in the OECD.

For some time it seemed as though TelstraClear was going to disrupt that cosy scene. TelstraClear has for a number of years been a reseller of Vodafone’s service, with TelstraClear subscribers accessing the Vodafone network with an 029 prefix. But last year it set about building its own network, starting in Tauranga.

This April, however, it announced it had pulled the plug on the planned Tauranga service (which it was calling Unplugged) after an apparent breakdown in its roaming agreement with Vodafone.

At the time of compiling this guide, in May, TelstraClear continued to resell Vodafone’s service. But it was unclear what would happen after the current agreement between the companies expired at the end of June.

A third network is still on the drawing board, though, with New Zealand Communications (formerly Econet) reportedly negotiating to take over where TelstraClear left off in Tauranga. NZ Communications said in March it had signed a deal with Chinese supplier Huawei to start building a national network and the scrapping by TelstraClear of its Tauranga plan could accelerate NZ Communications’ rollout.

Also waiting for the green light is a handful of mobile virtual network operators (MVNOs), including CallPlus, Orcon and Compass Communications, which have ambitions to resell Vodafone’s services. According to CallPlus, the wannabe MVNOs were waiting for Vodafone to modify its billing system before they could swing into action.

With Vodafone embarking on major changes to its back-end systems in May, the expectation is that the MVNOs will be able to begin selling services in a matter of months. Since August last year, Compass has been declaring on its website that it would be entering the mobile market “by early 2007”.

There’s one other player to mention in the mobile market and that is Boost Mobile. But Boost Mobile is none other than Telecom. It pitches a couple of prepaid plans to the text-heavy youth market.

If there’s one consolation from so little choice in the market thus far, it’s that deciding between providers is relatively straightforward. Even so, in talking to organisations with large numbers of mobile phone users in the preparation of this guide, we learnt that signing a service contract is far from being a trivial matter.

Many issues come into the selection process. Call cost, needless to say, is an important one. But so are network coverage, whether you have other business with the provider, the amount of international roaming your users do, whether your users have heavy mobile data traffic needs, and what your support requirements are.

The greatest competitive spur the market has received to date came along in April, when number portability was introduced. Its significance is that if your 200-user organisation signs a two-year contract with Vodafone today, on its expiry, if Telecom or some entirely new provider has a better deal, you can switch to the new supplier and your 200 users retain their original numbers. This can represent a big saving in printing business cards and was reason enough for one organisation we spoke to to delay renewing its supplier agreement for six months in the expectation of better deals once number portability was available.

An important fact to realise, however, is that handsets that work on Vodafone’s GSM network are not suitable for Telecom’s CDMA network, and vice versa. The two companies’ network types also have other implications. GSM networks are prevalent throughout Europe, making roaming in that part of the world straightforward for Vodafone customers, if still expensive.

CDMA networks are much less common, though they are found in the United States and parts of Asia. Nonetheless, Telecom mobile customers have far fewer international roaming options than Vodafone subscribers. Telecom plans to introduce dual CDMA-GSM phones to overcome this shortcoming. Dual-mode phones might also have interesting implications for users wanting to swap between the Vodafone and Telecom networks without having to replace handsets.

Overall, worldwide GSM phone users outnumber CDMA users several times, meaning there’s a much bigger market for GSM phones, and greater variety. Another important difference is that GSM phones have a SIM (subscriber identity module) card, on which the subscriber’s number is embedded. Changing GSM handsets is therefore a simple matter of swapping the SIM card from one phone to another, without need for Telecom intervention, a potentially important support consideration.