Worldwide Mac: Using the iPhone in New Zealand

In a previous post, I discussed some of the shortcomings of New Zealand's broadband infrastructure. A lot of you gave some great responses, which led me to realize that although it's certainly not world-class, NZ's broadband isn't quite as bad overall as I thought - it's just my ISP isn't the greatest in the country, and it doesn't help matters that I don't live in a major city like Auckland or Wellington. When we first got here last July, we were kind of bewildered by pretty much everything (moving to a new country will do that to you), so we signed up for what seemed to be the best value for our money at the time. This turned out to entail a one-year commitment to Vodafone. Well, as it turns out, Vodafone NZ's broadband plans kind of stink compared to some other offerings people brought up, so we'll be ditching them for something better as soon as that commitment is over next month.

With my iPhone, however, I don't have the option of giving Vodafone the heave-ho for at least another 20 months. In fact, right now if you want to buy an iPhone in New Zealand, unless you're willing to jump through a lot of hoops and pay a lot more money, Vodafone is pretty much the only horse in town.

While some Kiwi commenters pointed out that broadband here isn't necessarily as terrible as I made it out to be, one thing they all agreed on was that the mobile phone pricing here is just barely short of criminal. No, let's not mince words: it is criminal. New Zealanders pay some of the highest mobile rates in the world, both for plans and for handsets. What we get for our money down here is pretty astonishing, and not in a good way.

First, some perspective (some fresh, clear, well-seasoned perspective):

Here's what you'll get in the United States today if you sign up for an 8 GB iPhone with AT&T and the cheapest possible plan that includes text messaging:

8 GB iPhone 3G: $99
Data Plan for iPhone ("unlimited" data): $30/month
450 minutes of talktime w/ rollover minutes: $40/month
200 text messages: $5/month

Total monthly cost: $75/month
Total two-year cost of ownership: $1899

That's actually not all that bad. I'd kill for that plan at those prices. Know why? Because here's what you'll get in New Zealand today if you sign up for an 8 GB iPhone 3G with Vodafone and their cheapest possible plan (Note: from here on out all NZ prices are converted to U.S. dollars at the current exchange rate):

8 GB iPhone 3G: $322
Monthly plan: $26

Total two-year cost of ownership: $946

Well, look at that! The two-year cost is half of AT&T's, so we must have a way better deal down here in New Zealand. Right? Right...?

Here's what $26 a month gets you in New Zealand:

20 minutes of talktime (no rollover)
100 texts
250 MB of data

So, with Vodafone NZ, for slightly over 1/3 of the cost of AT&T's cheapest plan, you get half as many text messages (not bad), data capped to 250 MB a month (Wait, what?) and less than five percent the amount of talktime with no rollover (Stop! Thief!).

Let's compare apples to apples and try to find a Vodafone plan that compares more directly with AT&T's cheapest offering.

Oh, wait. There isn't one. At $84 a month, this is the best monthly plan Vodafone sells for the iPhone right now:

8 GB iPhone 3G: $128 (this is as subsidised as it gets)
250 minutes of talktime (still no rollover)
600 texts
500 MB of data

No, your eyes aren't deceiving you. 500 MB of data is as high as you can get here.

Vodafone's most expensive iPhone plan costs $9 a month more than AT&T's cheapest, which sounds like a good deal... until you see what you're getting for your money.

The pricing was worse by far when the iPhone 3G was first launched here. Currently a 16 GB iPhone gets subsidised to $225 if you sign up for Vodafone's most expensive plan; last July, when the exchange rate was far more favorable to New Zealand and Vodafone's subsidy for the phone far less, that same plan only subsidised it down to about $480 with the exchange rate at the time.

When the iPhone 3G was launched here, Vodafone offered a "better" plan than their current best, but it cost a staggering NZ$250 per month (~US$200 a month last year, ~US$160 this year). You got 600 texts and 600 minutes of talktime on that plan, but the data cap was still only 1 GB per month.

The prices of the iPhone itself and the plans were so criminally high last year that I refused to buy one. Because I also refused to waste money on a cell phone I didn't want and that didn't do everything I wanted it to do, I went without a cell phone until this February, when I noticed that the plan prices and subsidies had improved slightly.

As horrible as the value for money of the iPhone plans sound, they're actually among the best values in New Zealand for plans that include data. If you want a comparable plan for the Blackberry Bold, for instance, you can expect to shell out close to $700 for the phone itself. The plan will cost $26 a month for 60 minutes of talktime, free weekend calls and texts, and one "bestmate", a mini-plan that allows you to call and text one person as much as you want. Want data, too? That'll cost extra: $32 a month for 200 MB of data, plus another $19 per megabyte for "roaming data" (whatever that is), which isn't included in the data allowance. Unsurprisingly, I haven't seen too many people toting Blackberry phones down here.

Aside from the highway robbery prices, it's not all bad when it comes to the service itself. Unlike AT&T, all of Vodafone's phones are unlocked right out of the box, so if you feel like paying full price for the handset ($728 for the 16 GB model), you can always hop onto Telecom's network instead - but you're only trading one devil for another by doing so, as their plans and coverage really aren't any better than Vodafone. The subsidised phones are unlocked, too, but forget about ducking out early; Vodafone's early cancellation fees are monstrous.

Voice quality is often slightly warbly over 3G, but I haven't had a single dropped call yet - although that might be because, like most New Zealanders, I now text far more often than I call, since it's way more economical.

Vodafone's 3G service is mostly limited to the major cities, but I've found it to be spotty anywhere outside of Auckland (on the North Island at least; I haven't made it down south yet, sadly). There's a new service called "3G extended" that supposedly extends 3G coverage to 97% of the nation, but the iPhone isn't supported on that network - the network runs at 900 MHz, but unfortunately even the new iPhone 3G S doesn't do 3G at that frequency. Generally 3G speed is quite good, usually only slightly slower than what I get on my broadband at home.

With such low data caps, though, forget about watching YouTube videos or downloading anything off the iTunes or app stores while on the go - and who knows if tethering will even be a realistic option here. As long as you keep that in mind, it's actually quite difficult to butt up against even the lowest data cap unless you're surfing very heavily every day; I think the most data I've used in a month was around 180 MB, but that's mostly because my iPhone is usually on my home WiFi network.

As for finding free WiFi hotspots on the go, you can pretty much forget about it in NZ. While in the States it's getting easier every day to find free public WiFi, so far I haven't found a single free hotspot in this country, except for university WiFi that requires you to be an attending student (and sign up through a cumbersome proxy server). An app on my iPhone called WiFi Finder (iTunes store link) tells me there are a small handful of free hotspots in Auckland, but the overwhelming majority of WiFi here is pay-only, and the rates are prohibitively expensive. There are also standalone "internet cafés" in most of the major cities, but I've been wary of visiting those. Perhaps due to the pervasive data caps, I've also found that people here are much better at securing their home wireless networks; I haven't found a single unlocked network yet, although admittedly I haven't been looking very hard.

Outside of 3G coverage areas, the speed of the mobile network is abysmally slow. I haven't seen an actual EDGE network anywhere down here so far, with non-3G coverage areas bringing up the blue O GPRS icon in the iPhone's menubar instead of E for EDGE. If you thought EDGE was slow, GPRS will kill you - it's basically wireless dialup. I usually don't even bother trying to get online unless I have a 3G connection, because otherwise even the most basic pages can take several minutes to load in Mobile Safari. Oddly enough, the Maps app on the iPhone is usually still fairly quick to load data even on GPRS.

Not having used an iPhone in the U.S., or really any internet-capable mobile phone, I can't say for sure how service here in NZ compares. I will say that even with the claustrophobia-inducing data cap, spotty coverage, and high prices, the iPhone has still been an invaluable tool well worth the occasional aggravation brought on by the local telecommunications environment. Plus, it's quite amazing to be able to get mobile internet access at all when most of the scenery here is so breathtaking it makes me feel like I'm living on another planet altogether.

Not pictured: Holodeck arch

All signs point to New Zealand's mobile broadband coverage and speeds improving in the future. Hopefully the pricing situation will improve along with it, because honestly, it doesn't seem like it could get much worse.