2degrees to push for big power rejig

2degrees has entered the electricity market under its own brand and signalled it could use its relationship with its 1.5 million mobile customers to help build support for an overhaul of the power market.

The Australian-owned company was created in its current form by the merger of broadband company Vocus with 2degrees in June.

Spokesperson Quentin Reade said 2degrees already had 45,000 power customers who had signed up to plans offered by Vocus’ Orcon and Slingshot brands after it took over independent retailer Switch Utilities in 2016.

But it believed it could expand that business by offering power plans bundled with broadband on 2degrees’ website.

Chief executive Mark Callander said the next challenge would be to ‘‘bring interesting offers that make power pricing fairer for Kiwis’’.

‘‘We want to bring real change and consumer benefits to a market that is overdue for true competition.’’ But to achieve that, the structure of the power market would need to be reformed, he said.

Callander signalled 2degrees would push for power generators to be separated from retailers, suggesting that would mirror changes made to the telecommunications market in 2011 when Telecom was split into the businesses that became Spark and Chorus in preparation for the roll-out of ultrafast broadband.

‘‘We have the expertise, scale and brand awareness to shake things up in the electricity market.

‘‘But while there are similarities between electricity and telecommunications, bringing real competition to electricity may be an even greater challenge. You have four vertically-integrated players who dominate and regulatory and market constructs that act as barriers to innovation and competition in this sector.’’

Callander noted that other independent electricity retailers had been strongly lobbying for market reforms, but said he hoped 2degrees’ experience in telco sector reforms would ‘‘add weight and a fresh perspective’’. ‘‘We have a known and trusted brand, 1.5 million mobile customers, 355,000 fixed customers and the scale to effect change,’’ he said.

‘‘The success of wholesale regulation in the telco market shows what effective regulation, combined with a strong challenger, can do.’’

Energy Minister Megan Woods, who has held the energy portfolio since 2017, said last year that she would consider fresh reforms of the power market ‘‘including the possibility of structural change in the sector’’.

But she has since appeared to excuse higher profits made by the state-controlled gentailers Meridian, Mercury and Genesis.