Filed under: Analysis / Opinion, Wireless, iPhone
Why I'm not buying an iPhone 3GS in New Zealand (spoiler: it's not Apple's fault)
When Apple announced the 3GS with all its whiz-bang new features, honestly the only thing I cared about was the increase in capacity. Everything else was just a bonus. I had my bank account all primed and ready to buy the thing as soon as it came out down here in New Zealand, but I was also keeping a wary eye on the NZ telcos to see what sort of blech they'd bring to the situation. Well, the blech they've brought is bad enough that I'm not buying a 3GS any time soon.I looked forward to the release of the iPhone 3GS in New Zealand with a mixture of excitement and trepidation. Excitement, because it would be nice to finally own an iPhone that can hold all of the music I actually listen to (16 GB just doesn't cut it). Trepidation, because as I made clear in an earlier post, the NZ telcos don't make buying an iPhone a cheap proposition.
The more time passed without any major announcements from either of the main NZ telcos, the more I knew their plans would suck. Vodafone already sold the 3G down here, so they were in a position to do pretty much whatever they wanted to the prices. Telecom was supposedly in "deep negotiations" with Apple to sell the iPhone in New Zealand, but the days stretched into weeks without any official word.
Traditionally, Apple has kept the prices of new products either the same or slightly lower when refreshing product lines like the iPod or iPhone. Many worldwide telcos have followed suit; in fact, across the Tasman Sea, Vodafone Australia offers a free iPhone when you sign up to a two-year plan.
Pretty much the most I was hoping for from the NZ telcos was that they'd keep their plan prices the same. I got my wish, sort of.
Across the board, Vodafone NZ's plan prices remain exactly the same as they were. However, unlike almost every other telco everywhere else in the world, Vodafone NZ has raised the price of handsets.
In February, I got a 16 GB iPhone 3G for NZ$799 with a $60/month plan. What does Vodafone charge for the 32 GB iPhone 3GS, on the same plan? NZ$849. True, that's only a difference of NZ$50, but considering the deals people are getting in other countries, it's a bit of a slap in the face for Vodafone to raise already absurdly high prices.
So what about Telecom? Are they swooping in to rescue New Zealanders from Vodafone's exorbitant rates?
Yeah, not so much. Telecom's "deep negotiations" with Apple apparently went pretty much nowhere. Telecom still doesn't sell the iPhone 3G or 3GS, nor do they have any plans specifically tailored to the iPhone.
The best Telecom has come up with is this: bring in your unlocked iPhone 3GS (purchased for NZ$1379 from Vodafone NZ or, if you feel like saving a whole $30, from Apple itself), sign a 2-year contract with them on a $80/month plan, and they'll give you a $600 credit on your account. This amounts to what I've been calling a "back-handed subsidy" -- you sort of, kind of get a subsidised iPhone by going this route, but not really.
This sounds pretty good, until you realize what you're getting from Telecom for $80/month: 180 minutes of talk time (which is good), no texts (which is very bad), and 240 MB of data per month -- and the data is only free for 24 months, after which you'll have to pay for that, too (which is *expletive deleted*).
I thought about taking Telecom up on their offer, blasé as it was, until I crunched the numbers. Keeping my current $60/month plan with Vodafone and getting a subsidised 3GS from them, the two-year cost is NZ$2289. Buying the iPhone through Apple and taking it to Telecom, even after the $600 "subsidy," the two-year cost comes out to $2669, and that's with no texts and 10 MB/month less data.
Granted, Telecom's XT network looks like a more attractive option for iPhone users than Vodafone's. Vodafone's "extended 3G" network works on 900 MHz bands the iPhone doesn't support, which means true 3G service is restricted to urban areas; outside of that, you'll suffer GPRS speeds that blaze along at about the pace of a dialup modem circa 1998. Telecom's XT network, on the other hand, runs at 850 MHz, which the iPhone's antenna supports just fine. In theory, this means Telecom's 3G network should have better range, speed, and support for the iPhone than Vodafone's.
In response to people wanting to switch to Telecom for that very reason, Vodafone currently has a promo running where they give an additional free 3 GB of data per month and 1000 free PXTs (also known as MMS) to all iPhone users -- but the promo is only running for three months. Plus, unless you're in Auckland, Wellington, Christchurch, or some other urban area all the time, and using your iPhone all day, you're probably not going to hit that 3 GB cap in three months, much less one. If you're out in the country and on GPRS speeds, by my (admittedly hasty) back of the envelope calculations, it would take you about 5 days of constant usage to hit a 3 GB cap.
Since Vodafone shows no signs of tailoring their network to the iPhone, and Apple shows no signs of tailoring the iPhone to Vodafone's network, it makes absolutely no sense for anyone in New Zealand who spends any amount of time outside the major cities to sign a contract with Vodafone if they want an iPhone. This is why I and many others were salivating at the prospect of Telecom offering a truly competitive plan for the iPhone, but Telecom has failed to deliver.
I can't justify a two-year commitment to Vodafone when they don't fully support my handset of choice, but I also can't justify paying full price for the iPhone and signing up to Telecom's half-hearted offering.
The end result? Until one or the other of these telcos pulls their heads out of the sand, I won't be upgrading to an iPhone 3GS.
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Reader Comments (Page 1 of 3)
lotech said 12:44AM on 7-16-2009
Telecom has just offered pretty much the same deal as the current Vodafone iPhone plan, via $600 free credit (if you bring a 3G/3GS with you).
I worked out the pricing and whether is good value here (suffice to say it isn't) - http://www.geekzone.co.nz/lotech/6634
If anything my spreadsheet shows how little difference there are between the 2 companies - the same price for slightly different plans. Also keep in mind those numbers are based on owning a phone outright before switching to Telecom. I'm still undecided.
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Swimatm said 12:52AM on 7-16-2009
Is the network infrastructure there so weak that it can't handle an unlimited data plan? I hope they're quickly adding towers.
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rruizv said 1:00AM on 7-16-2009
Sound like Mexico to me. Pretty unfair non-US carriers.
*Sigh*
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N I T E said 1:19AM on 7-16-2009
We need more competition in the Telecommunications sector in New Zealand. Not just those small companies like Black+White etc. We need a big daddy to come and rock Telecom and Vodafone's world! Until then, the consumers will suffer :(
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Allister said 1:22AM on 7-16-2009
Ye gads you like to rant!
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oliver hart said 7:45PM on 7-16-2009
amen.
"i bought my iPhone in NZ because I wanted to"
fin.
/s
lotech said 1:39AM on 7-16-2009
But with 4 million people who would bother? Too much effort for little chance of profit.
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Alec said 5:27AM on 7-16-2009
Just get someone in Aus to buy you one outright and ship it over. Apple are even selling it outright and unlocked on the Aussie store. Hell, email me and I'll do it for you.
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Cableguy said 2:45AM on 7-16-2009
Chris you have saved me a lot of typing!
I couldn't agree with you more in regard to your post above! I too was exited about getting the new phone for the extra space for my music. Especially after frying my 1st gen phone a few weeks back! On that note ALL iphone owners beware, if you think your phone is ok or dry enough to charge after getting water in the dock connector, wait longer than you think, preferably 12hrs or so, otherwise you'll could end up with a piece of toasted metal and glass like I have! But back on topic, I was bitterly disappointed with Vodafone's deal especially after seeing what our Aussie counterparts are getting!
Come on Telecom or 2 degrees, here is your time to shine!Give us a good deal!!
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Brandon said 8:23AM on 7-16-2009
Some people bake the phone to clear out any water that might have gotten in it. Or kitty litter.
TonyAndrewMeyer said 2:21AM on 7-16-2009
The more you write about NZ, the more you look like a fool.
The Vodafone 3G coverage (as usable by an iPhone) is certainly worse than on XT, but it's hardly just the main cities. You can get 3G reception in most cities, and as long as you spend some time in at least one, the iPhone is still worth having. It's probably even worth having if you don't use 3G (just ask the people that bought iPhone version 1).
The cost of data is high in NZ - hopefully that'll change as the competition between the carriers continues to increase (especially with the introduction of XT). However, other costs are not that high (as has been repeatedly pointed out to you every time you rant about it).
The cost of the phone is pretty comparable to other countries if you factor in the exchange rate and GST. The subsidy is much less than elsewhere, true, but Vodafone is trying to get customers in other ways (which actually suit some customers more).
Are you really complaining that the cost of the best iPhone has gone up in 5 months by NZ$50 when the capacity has *doubled* (plus all the other improvements that the 3GS has over the 3G)?
If you're not happy in NZ, leave. We won't miss you. If you stay, try writing something balanced once in a while.
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lxboy said 2:47AM on 7-16-2009
"If you're not happy in NZ, leave...."
God I am soooo sick of seeing the above sentence in reply to people on various blogs trying to point out a fact... we ARE getting shafted by our telcos PERIOD! It's got nothing to do with wanting to stay living in New Zealand! I guess you are happy with your over priced monthly power bill as well? I found Chris's post very balanced. Did he mention anywhere that he was sick of New Zealand, no he didn't, he did however mention that he won't be giving in and buying a new phone.
Ben Grogan said 3:02AM on 7-16-2009
Breakdown in price with both adjusted to NZ$:
32 GB iPhone cost in the US for a 2 year plan (new customer): NZ$466.00
32 GB iPhone cost with Vodafone for a 2 year plan NZ (new customer): $799.00 (with $80/mo plan)
Plans:
ATT:
NZ$62.00 (450 minutes/month)
NZ$5.80 200 texts/month
NZ$47.00 unlimited data
Total NZ$114.00/mo
Vodafone NZ
NZ$80.00 (120 minutes/month, 600 texts/month, 250 MB/month)
additional data NZ$0.10/MB
Total NZ$80/mo
I'll add 10% tax arbitrarily to the US prices to show actual costs.
So the US iPhone costs about NZ$512 and the NZ one costs NZ$799.00, or about NZ$290.00 more.
The US plan costs about NZ$35.00 more per month, but you get almost 4 times the minutes and unlimited data, with 200 texts.
So no, not really comparable. And the minutes and minuscule data allowance is unforgivable.
Chris Rawson said 3:34AM on 7-16-2009
I love New Zealand. I hate Vodafone, and I'm disappointed in Telecom. To jump from that and say I dislike anything about New Zealand itself is like saying I hate America because I think Windows sucks.
I love NZ, and have no intention of leaving.
TonyAndrewMeyer said 4:39AM on 7-16-2009
I didn't say you dislike anything about NZ itself. I said if you weren't happy here (which your continual complaints certainly indicate), then you were welcome to leave. In general, NZers don't like people that moan.
My power bill is fine, thanks. Do you have any idea what the costs are to develop and maintain a cellular data network in a country like NZ (a country that is nothing like the US)? Where do you think that money comes from? Trees?
For prices: (1) you have to halve (at least) the number of txts, because receiving a txt is free in NZ, (2) GST in NZ is 12.5%, not 10%, (3) "unlimited" data isn't "unlimited", and if you're only using a few hundred MB (as many people say they do), then "unlimited" makes no difference, (4) with VF, it's also 1000 MMS/month, and *3* GB/month (they've already said that after the 3 months of that is up, something new will replace it), (5) to make the number of txts equal, it's about NZ$18/month more than you say, (6) You should compare to more than just the US.
I'm not saying that NZ is getting the best deal. But there are reasons, and hope (i.e. XT is still very new, 2 Degrees is about to launch, and TelstraClear moving back to VF). A good journalist would do more than just rant.
Chris Rawson said 4:03PM on 7-16-2009
Actually, I am quite happy in New Zealand. The only issue I have with it is the crappy telecommunications environment, which as a writer for a tech blog, I have chosen to bring to light. This isn't an appropriate forum for me to write thousands of words about all the things I love about this country, which include: well, pretty much everything other than Vodafone and Telecom.
As for, "A good journalist would do more than rant" - first off, what, exactly? Last I checked, journalists (not pundits) pretty much just report the issues. Other people come up with solutions.
Second, I am not a journalist. I don't have a degree in journalism, have never taken a course in journalism, and I have no interest in journalism. I am a blogger. If you're looking for serious journalism, you're in the wrong place. These posts are something I would write anyway on my own time, but someone higher up decided my writing was of good enough quality to introduce it to this audience. This blog is neither my livelihood nor even the biggest daily drain on my time.
Craig Stanton said 1:51AM on 7-17-2009
Don't take what Tony says to heart. I wouldn't encourage you to leave NZ because you don't like the telco business here. If we did that there'd be no-one left. Sure, seeing reports on how crappy our infrastructure is doesn't make me happy, but since it's the truth no-one should try to stifle you. Though it sucks, bringing it to light can't make it worse.
P.S. If you've got American Apple products and need an NZ duck-head for the power bricks, I just bought a bunch on Ebay and ended up with a few more than I need. Contact me if you're interested.
daniel said 6:59AM on 7-17-2009
"If you don't like NZ, leave..."
People are granted their own opinion. Just because they are different to yours and may point out the ills in your society does not make it wrong. Your position that all those who dislike aspects of your society should leave is ignorant faux-patriotism at its best. Too bad it's increasing here in Australia.
As for your argument that iPhone plans are suitable to New Zealand because of the NZ$ and the GST is totally baseless. It is all based on whether there's enough competition in the market.
Look at Australia: sure, our currency is 'stronger' than yours but we also have GST just like NZ. Despite this, since the iPhone is available on all the major mobile companies (Vodafone, 3, Optus, Telstra, Virgin), the prices are significantly lower than what you pay in NZ.
AeronPeryton said 3:24AM on 7-16-2009
Malaysia offers a free 3G (No 3GS here yet) if you sign up for a 2-year contract as well. And the phones sold here are factory unlocked too. The only bad thing is that no amount of money with any Malaysian telecom company will grant you an unlimited data plan, you can spend twice as much a month and get twice as much bandwidth but no all-you-can-eat.
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Bruce Hoult said 4:19AM on 7-16-2009
I think it's pretty much agreed that the actual hardware price of an iPhone in the USA is $600 for the 16 GB and $700 for the 32 GB, both before tax.
Converting those to NZ$ at the exchange rate from two months ago when the models were announced and the price was set (call it 0.60) we get NZ$1000 and NZ$1167.
The retail prices in NZ$ including tax are $1149 and $1349, which without tax is $1021 and $1199.
So comparing converted USA prices to NZ prices without tax we have:
16 GB for $1000 vs $1021
32 GB for $1167 vs $1199
It's pretty close. I don't think anyone can say that the NZ prices were a rip-off, as set two months ago.
Of course it does look worse if you use today's exchange rate of 0.6406.
Equally, NZ prices were looking VERY cheap as recently as April when the exchange rate was under 0.50.
The fact is that exchange rates do bounce around a lot, but you can't go changing the retail price every day. Better to just quote it in USD in the first place.
Apple strategy seems to be to set the price using the exchange rate at product announcement and leave it for the life of that model. Sometimes we win, sometimes we lose.
I'll just note in passing that almost everyone I know here in NZ who already had an older iPhone bought a 3GS in the first 24 hours after they were available. I also know a lot of people who have just taken the plunge and bought their first ever iPhone this week.
I upgraded from an original model, received my new 32 GB 3GS yesterday, and it is AWESOME. The general speed of operation feels more like three times faster than twice as fast, the camera is great, I've already used tethering more than I expected to, I've got my entire music collection on there, plus all the Apple Keynote podcasts, some other videos etc and I still have as much free space as my old iPhone came with from the factory.
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