2 degrees makes 1 million customers

Jamie Gray at NZ Herald reports:

The chief executive of 2degrees, Eric Hertz, says there is plenty of growth left in the New Zealand market, despite the upstart mobile phone company passing the one million customer mark.

Hertz said New Zealand, despite having market penetration of 120 per cent, had not reached saturation for mobile phone devices.

“It’s no longer about the number of people in the country,” he said. “It’s really about the number of connections.”

I’m not a customer myself, but it is good to see 2 degrees do well. They’ve had a great impact on the market, offering cheaper deals and pushing prices down from Telecom and Vodafone.

It is worth reflecting that they probably wouldn’t have succeeded to the degree they have, if the Government had not regulated mobile termination rates.

Regulation is a last resort but sometimes a necessary evil – especially in areas where inter-connection is crucial. If incumbent telcos could demand new telcos have to pay say $2 a minute to call someone on their network, then no new competitor would ever get a single customer.

The lowering of artificially high mobile termination rates has been a great boon for competition.