Nova adds phone, internet to power offering

Wednesday 7th November 2018

Nova Energy is the latest power retailer to start offering internet and phone services to complement its existing electricity and gas business.

The firm, the country’s sixth-largest power retailer by accounts, is offering unlimited ADSL, VDSL and 100 megabit fibre services for $89.99 a month and $109.99 for 200/20 fibre services.

Customers who opt for a one-year term plan can also get a $300 account credit. Landline, mobile and international calling plans are also available.

Chief executive Babu Bahirathan said that, locally and internationally, consumers are showing more interest in buying additional household services from a firm that has been a reliable supplier to them.

That is driven by more than just the convenience of buying multiple services on one bill and is also about expanding a relationship with a trusted supplier, he said.

“Our success is based entirely on how our customers feel about us,” he told BusinessDesk.

The new service is available in most parts of the North Island and Christchurch and will be expanded to other parts of the country next year.

Some of the major power retailers, facing on-going competition from a growing swarm of niche rivals, have been turning to bundling to help increase the loyalty of their existing customers – thus reducing the cost of keeping them or competing in the market for new ones.

Services like internet also help them attract the most valuable customers and add to the total value of services they can charge each household, particularly as household power use continues to slide.

Trustpower has offered phone and internet services since 2007. It now has more than 91,000 telco connections and the country’s fourth-largest base of fixed-line internet services users.

Churn rates among its customers taking power, gas and internet are roughly half those of taking electricity only. More than 102,000 take more than one service from the company.

Contact Energy is also now working to actively build its 3,000 broadband customers as part of a transition into a provider of smart services for homes and business.

Conversely, telecom provider Vocus Group, which owns Slingshot, Orcon, 2talk and Flip, has gained 17,000 power accounts since entering the electricity market in late 2016.

Bahirathan said those changes reflect both the change in customer behaviour underway and the increased competition in both industries from low-cost, start-up retailers.

Nova, owned by Todd Corp, already supplies about 80,000 power accounts and 29,500 active gas accounts. It has built its own network core for the phone and internet service so that it can better manage speeds and access to international traffic.

Nova's initial focus is offering the new internet service to its existing customers, but it is also open to new energy customers and on a stand-alone basis. Sign-ups during October were slightly better than planned, Bahirathan said.

(BusinessDesk)

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