I have been the ‘Challenger up against the big guys,’ for much of my career.
Originally from Dunfermline, Scotland, I have worked in the telecommunications industry for 39 years, including as the Chief Executive of mobile communications company Meteor in Ireland. Like New Zealand, Ireland was a two-player market for telecommunications.
Meteor was the third entrant that went in to shake things up.
In recent times, my focus has been on launching new mobile communication providers into emerging markets, covering everywhere from Latvia to Ghana and Georgia to Bolivia.
2degrees Mobile Limited recently celebrated its fifth anniversary, but its beginnings date back several years before its launch.
I have been involved with 2degrees for about eight years now through its majority shareholder Trilogy International. It was appealing as it was also a new entrant taking on two big guys.
But while the Irish telecommunications monopoly was about 40% of the market, in New Zealand it was at 100%. Two companies dominated the whole country, and entering the market seemed a very difficult task.
Regardless, I travelled to New Zealand to ‘check things out’ on behalf of Trilogy.
New Zealand was stagnant. Telecom ruled the South, and Vodafone owned Auckland. Both companies priced their services exactly the same.
Seeing the opportunity, veteran telecommunications executives and Trilogy founders John Stanton and Brad Horwitz invested in 2degrees in 2008 and sit alongside other shareholders; the Hautaki Trust, Communication Venture Partners and KLR Hong Kong Ltd.
Several years of preparation and over $550 million in investment saw the launch of 2degrees in 2009. In 2013, after serving as Board Chairman, I relocated permanently to New Zealand to become the Chief Executive Officer of 2degrees Mobile Limited.
Innovation was the key to our success.
Before 2degrees was launched, the standard call was 89 cents per minute.
We cut that in half to 44 cents the day we launched. Text messaging, additionally, went from 20 cents per message standard to just nine cents.
A focus on market segmentation is integral, and this pricing enabled us to become a serious player in the pre-paid market.
Next came the post-paid market.
Before 2degrees, there were no bundled value packs, no carryover minutes and no data sharing. We were innovators of all of these products in the market.
In fact, all our competitors have followed us, and I cannot think of one post-paid product that was not developed by 2degrees.
Five years later, 2degrees is part of the fabric of New Zealand’s telecommunications industry. Its next step in segmentation is becoming a major player in the business market.
An independent study we commissioned estimated our current direct and indirect contribution to New Zealand to be $3 to $4 billion, forecast to rise to between $12 to $13 billion by 2020. The direct investment is through infrastructure, employment, and 2degrees stores, but the indirect contribution is more important.
We are now giving consumers an average of 11 times more value for their telecommunication services, and this has a huge flow-on effect to business profitability.
It allows our customers to offer better prices to their customers. That is possible when you change the price of telecommunications and create a competitive market.
Stewart Sherriff is the Chief Executive of 2degrees Mobile Limited, Sponsor of the ‘Best Small Business’ Category of the Indian Newslink Indian Business Awards since 2012.