The New Zealand Commerce Commission has published a report looking into the state of mobile telecommunications competition among business customers, with providers Spark, Vodafone New Zealand, and 2degrees facing critical responses to their customer service, coverage, pricing, and reliability.
The report, Competition for Business Customers in the Mobile Industry: A Report for the Commerce Commission, was conducted in December 2015 by UMR Research.
For its qualitative research segment, UMR conducted 12 in-depth interviews with businesses on their mobile telecommunications services and providers. It found that the dominant perception about Spark is that it is "impersonal".
This was in spite of 36 percent of Spark customers interviewed during the quantitative research segment being unlikely to say that their costs were significant, 77 percent of customers reporting reasonable satisfaction with using Spark as their provider, 32 percent of all respondents rating it as having the best customer service, and 33 percent voting Spark as the best at good invoicing.
In regards to coverage, 48 percent rated Spark as having the most reliable coverage. Spark was also voted as having the best pricing by 26 percent and the best bundles by 23 percent.
Spark remains the primary mobile telco, with 46 percent of all respondents using it as their main provider. On the South Island, 40 percent of businesses use it as their main provider, while 55 percent use it on the North Island. It is also the most likely to be used by primary industries, at 60 percent, with 42 percent of small companies with less than six people and 40 percent of large companies with more than 100 people also using it.
The dominant perception of Vodafone, meanwhile, was that it is "unresponsive". UMR reported frequent instances of "poor customer service", particularly in regards to its call centre.
Half of all Vodafone business customers said they were unlikely to complain about significant costs, however, while 81 percent reported being "reasonably satisfied".
Out of all respondents to the research, 25 percent rated it as having the most reliable coverage; 24 percent as having the best customer service; 23 percent as having the best pricing; 29 percent as being the best at good invoicing; and 24 percent as the best at bundled solutions.
Vodafone's major business customers include secondary industries, at 45 percent; small companies, at 45 percent; and large companies, at 49 percent. Overall, 40 percent of businesses in New Zealand use it as their main provider, with this figure rising to 46 percent on the South Island and dropping to 35 percent on the North Island.
Vodafone was also voted by 27 percent of all respondents as having the best international roaming service.
The dominant perception of 2degrees is that it is aimed more at the residential youth demographic than for business, as well as being more of a value-packed offering: 67 percent of customers said their costs were not significant and 15 percent rated it as having the best pricing, though only 3 percent of all respondents rated it as having the best bundled solutions.
The attribute 2degrees performed best at was "innovation and flexibility", with 58 percent voting it the best, while 49 percent of Spark customers and 50 percent of Vodafone customers thought their telco was most innovative and flexible.
Just 8 percent of businesses use 2degrees as their main provider, though this leaps to 20 percent in Wellington, and it is most likely to be used by those providing professional services, at 17 percent. Only 2 percent of large companies use 2degrees as their main provider.
A substantial 93 percent of customers are reasonably satisfied with their 2degrees service, while 77 percent of 2degrees customers would recommend them.
According to Telecommunications Commissioner Stephen Gale, the results of the report were positive, demonstrating a sufficient state of competition in New Zealand's mobile telecommunications sector.
"The majority of respondents don't consider their mobile costs to be significant, and say switching is not overly difficult, which means perceptions of network coverage and customer service become key factors in their choice of provider," Gale said.
"Overall, the study does not suggest that there is any anti-competitive behaviour or structural, legal, or systemic factors existing in the market that are inhibiting competition. Instead, most businesses appear to be sticking to their providers as they are largely satisfied with the service they receive."
The majority of New Zealand businesses surveyed agreed that mobile data pricing and allowances are poor value compared to international offerings, however.
Spark last month published its financial results for the first half of FY16, reporting net earnings of NZ$158 million, while Vodafone in August posted a full-year net loss of NZ$121 million.