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Cheap trumps fast or bundled as reason to pick ISP in NZ

26 Oct 2013

Among New Zealand consumers who chose their current Internet Service Provider (ISP) within the last 12 months, by far the most common reason for the choice was to get a cheaper or better deal.

With 60% of those surveyed aiming to save dollars (60%) - the lure was over five times as many consumers as faster connection speed (11%), according to the latest research from Roy Morgan in the year to August 2013.

Some of the other deciding factors are to bundle with other services (14%), dissatisfaction with previous ISP (12%), or a recommendation from family or friends (8%).

Compared with the 12 months to August last year, deal-hunting has increased its lead as the predominant factor, while faster connection speed declined 3% points and dissatisfaction with previous provider lost 2% points.

Bundling and packages, recommendations, and the offer of other incentives were each unchanged on the previous year.

“With Vodafone’s recent acquisition and phase-out of TelstraClear and Slingshot and Orcon now battling it out for a lead in the area of price (including $99 unlimited data plans), there is a lot going on that will, in the months and years ahead, both reflect and affect what consumers expect from their internet service provider," says Pip Elliott, GM of Roy Morgan Research New Zealand.

“With mass-market home internet adoption, it is up to the ISPs to differentiate themselves in order to attract new customers.

"TelstraClear had clearly demarcated itself as a provider offering cheaper deals. Over the coming year we will see how successful Vodafone has been in retaining these cost-conscious customers.”

Reasons to Choose Internet Service Provider from Aug12 to Aug13

Detailed data on New Zealand internet users’ preferences, priorities and choices show real differences between customers of the different providers.

Taken over by Vodafone a year ago, TelstraClear had the highest proportion of new customers that chose it for a cheaper or better deal (79%), followed by Orcon and Slingshot (76%).

In the year to August 2013, only 54% of Vodafone’s recent internet customers picked it for cheaper rates, with another 14% moving across from TelstraClear.

Less than half (47%) of Telecom’s recently acquired internet customers chose the ISP to get a cheaper deal. Instead, Telecom leads on bundling (19% of new customers) and dissatisfaction with previous provider (17%).

Reasons to Choose Internet Service Provider

Why did you choose your ISP? Cheaper deals? Tell us your thoughts in the comments below