MyRepublic's MVNO becomes Rocket Mobile after broadband business sell-off

When Singapore-based MyRepublic sold its fibre broadband business to 2degrees, the company's nascent Mobile operation was not part of the deal. It remains in MyRepublic's hands and is now operating as Rocket Mobile.

The company says it will offer a series of prepay plans that, in part, look similar to those offered by Mighty Mobile, another overseas-owned MVNO.

James Whittome who is head of product and marketing at Rocket Mobile prefers not to use the term prepay. Instead he describes it as “upfront” mobile. He says prepay is confusing and: "comes with catches and nasty surprises which cause you to either pay more than budgeted, or get cut off. Upfront mobile means the price you see is the price you pay.”

No credit checks

In practice, Rocket's approach means there are no credit checks or photo identification. All customers need to start calling or downloading is a valid credit or debit card.

Much of Rocket's initial sales pitch echoes what you can hear elsewhere. The company criticises those who add card fees, MMS overage and voicemail charges. And like 2degrees, Rocket points to the 28-day billing cycle some carriers use to squeeze 13 payments a year from customers who think they are paying monthly.

As mentioned earlier, Rocket Mobile plans resemble those from Mighty Mobile which depart from plans offered by more traditional carriers. The plans are for unlimited calls, texts and mobile data with customers charged by speed.

Monthly plans from $25

The cheapest, $25 a month plan runs at 2 mbps while the top plan is $60 a month for now, rising to $70 after an initial launch period. The lowest plan allows 10Gb of tethered data while customers on the top plan can use 40Gb when connected to other devices. Once the tethered data allocation is used, speeds are reduced to 1.2 mbps.

Another similarity with Mighty Mobile is that both MVNOs are on the One NZ network. When it was still known as Vodafone, One NZ relaunched its wholesale business as Vodafone Infrastructure Partners or VIP aiming at opportunities like this.

MVNOs have never taken off in New Zealand. At their peak they collectively accounted for around 1.5 per cent of all mobile accounts. It would be less today. Overseas companies with solid brands and large customer bases have been able to leverage their earlier success with mobile. The most visible example of this in New Zealand would be the Warehouse, but its mobile business remains tiny.

Customer service quality tests new lows

Results from the second quarter of the Commerce Commission's service quality rankings are almost as dismal as those in the first set of rankings published in September.

They show a clear picture that customers are not happy with the service they get from New Zealand telcos. The NPS scorecards are at levels that would trigger resignations and sackings in other consumer sectors.

While some measures in the second Residential Mobile Rankings show improvement, net promoter scores are lower than before.

Skinny still top

In September, Skinny topped the survey with a NPS of 46. That number is considered poor in most industry sectors but it was a long way ahead of One NZ with an NPS of 8.

Skinny remains top, but its NPS has dropped to 37. 2degrees is unchanged on 30. Spark dropped from 17 to 9 while One NZ lifted from 8 to 9. Remember these scores are out of a possible 100.

Scores for the 'customers with an issue' category crept up one or two points. The 'speed of resolution' category was much the same although, Skinny, previous the best, dropped to bottom place. Scores for 'staff knowledge and helpfulness' were down a few points on average.

Things are much the same in the Residential Broadband survey.

Gilbertson on the ComCom's customer service quality work

Telecommunications commissioner Tristan Gilbertson says the Commerce Commission's retail service quality work aims to improve the demand side of competition in the market.

There are two sides to market competition in telecommunications. On the supply side you have issues such as product pricing structures and product differentiation.

Gilbertson says: "The degree of homogeneity in the market in terms of product pricing structures is an emerging concern. Each of the companies are prices within an inch of each other. The differentiation is basically down to which streaming service is bundled with which package and that's about it."

Market homogeneity

An example of this homogeneity is that two years ago if you signed up for a broadband account, you'd get sent a modem-router. Overnight the default, across all the large service providers was to not offer a modem. They remain available, but now you have to pay extra for one.

There is potential for services providers to compete on offering better modems and this has been visible in the market in the past. Some have offered mesh networks as an incentive.

He says there is work to deal with the demand side, but there is now work underway to deal with the supply side of the equation.

Inertia

He says: "Telecommunications, like a lot of other utility industries, is characterised by high degrees of consumer inertia. Encouraging consumers to think more about the service they get enables them to meaningfully compare different providers and services. They can then move to them so that consumers are voting with their feet. That's a critical driver of competition."

Competition in that area remains muted. Gilbertson says for competition to work, you need active consumers who are able to participate confidently in the market.

The conversation with Telecommunications Commissioner Tristan Gilbertson and his team at the Commerce Commission took place earlier this month. You can read about the commission's thinking on other issues in last week's newsletter.

Rural broadband builds near completion

The latest quarterly digital connectivity report from Crown Infrastructure Partners shows the lasted round of New Zealand's rural broadband expansion projects are nearing completion.

CIP says 81,094 rural homes and businesses now have access to improved broadband. That's 98 per cent of the project's target. A total of 104 km of rural State Highways now have mobile coverage, that's 96 per cent of the programme completed.

During the quarter a further four tourism spots were connected. This brings the total up to 128 spots, 77 per cent of the target.

Uptake 74 per cent

CIP notes the UFB fibre uptake is now at 74 per cent. There were 14,450 new UFB connections in the quarter. Nine areas now have 99 per cent uptake.

Standard 300 Mbps fibre connections remain the most popular option accounting for more than half the total (56 per cent).

Gigabit and above connections now make up 23.8 per cent of the total. UFB uptake is highest in the Auckland region (81 per cent) and lowest in the Manawatū-Wanganui region at 65 per cent although Northland is a fraction ahead on 67 per cent.

Mobile core network market slowest for six years

Dell’Oro Group reports the market for Mobile Core Network technology slowed last quarter (Q3 2023) to the lowest level since 2017. It blames the slowdown on geopolitical uncertainty and continuing high inflation rates across the world. The research company says unfavourable foreign exchange rates is another factor.

This comes at a time when many expected buoyant spending on network equipment as mobile operators upgrade to standalone 5G technology. The upgrade is not happening at the expected pace. A mere seven standalone 5G networks launched this year compared with 17 a year earlier.

In other news...

A slow-down in 5G mobile roll-outs is behind a first half profit slide Auckland-based Rakon. Revenue fell from $87.2 million to $61.3 million in the six months to 30 September while EBITDA tumbled to $5.3 million from $28 million. The company makes crystals and other components used in wireless technologies and GPS hardware.

A report by Phil Pennington at RNZ says the Ministry of Social Development's Māori Reference Group expects to see racial bias show up in a new government facial recognition system. The group goes on to say it expects the Identity Check technology to improve with use.

Optus boss Kelly Bayer Rosmarin resigned following the widespread network outage and last year's humiliating cyber attack. About 10 million Australians were affected by the outage. A poor performance in front of a parliamentary committee looking into the outage did not help her case. Nor was the admission that she carried rival phone companies' SIM cards.

SpaceX's second attempt at launching a Starship Super Heavy rocket resulted in an explosion or, to use SpaceX's euphemism 'rapid unscheduled disassembly'. SpaceX plans to use the giant rocket for a moon mission in two years time and then for transport to Mars and potentially as a way to launch the large numbers of satellites needed to expand the Starlink network.

Bloomberg's Apple watcher Mark Gurman reports that the computer maker plans to put its own cellular modems in future MacBook models. That isn't likely to happen until 2026, by then the hype will be hotting up for 6G mobile.