2degrees could take one-third of the telco market: TUANZ

2degrees chief executive Eric Hertz at this morning's announcement. Photo / supplied

Mobile operator 2degrees has tripled its market share and could eventually take a third of the market, the Telecommunications Users' Association (Tuanz) says.

2degrees announced this morning its customer count is now at 580,112 - or one in eight New Zealanders - up from 206,000 a year ago.

That gives the third network 11 per cent of the 5.237 million users, compared to some 4 per cent a year ago.

2degrees chief executive Eric Hertz told a media briefing in Auckland the growth was down to the company's continued success to listening to customers.

2degrees has won almost all new connections over the last year, eating into the former duopoly of Telecom and Vodafone NZ, who both achieved small gains in customer numbers during the December quarter.

The numbers only included 2degrees customers who had used their phone in the past 90 days.

Data demand was doubling every two months, and the company's investors saw long-term growth potential in the business and the country's mobile market.

TUANZ chief executive Paul Brislen said the company was doing "exceedingly well", and it was possible it could eventually take a third of the mobile market.

"They've come into the market with a very simple proposition - they have complicated it somewhat over the months since they launched ... But when they launched I think it was quite a breath of fresh air."

Other telcos' pricing plans were still deliberately confusing, he said, and there were too many plans.

But Telecom had quietly rejigged some on-account plans to mimic 2degrees' approach, while Vodafone had introduced "anynet" texts for customers wanting to text other networks.

"I think the others are sitting up and taking notice, if nothing else."

Telecom was strong in the South Island despite its much-hyped XT network falling over, and Vodafone was strong in Auckland. Given the regional variation, the three companies could eventually average a third of the market, he said.

However, it was yet to be seen whether 2degrees was making inroads in attracting the more valuable customers, or whether it was getting the lower spend, little use customers.

2degrees was targeting young urban professionals who were setting up flats or houses or business, the segment of the market which did not have landlines, which would accelerate the trend for mobile-only customers.

Hertz would not reveal the geographic split of 2degrees customers nor the average amount customers were spending on their phones each month.

However Hertz said the company was on track to open another 30 retail stores by the end of the year, bringing the total number of 2degrees stores to 40.

Hertz also told the briefing that the telco had grown to 400 employees and would look at new products and pricing - though he didn't elaborate

He said one of the most encouraging signs was the number of customers who had brought their number to 2degrees.

"With a quarter of our customers bringing their pre-existing mobile number to our network, it proves just how easy it is to keep your number and get a better deal," he said.

Hertz also said that a reduction in mobile termination rates, currently being reviewed by the Commerce Commission, would not necessarily reduce prices for customers but would improve the value for money they can offer.

- Nz Herald Online / Hamish Fletcher / BusinessDesk / NZPA