By Nick Gelling
Product Test Journalist | Kaipūrongo Whakamātautau Hautaonga
Tempted to get cheap internet and power by bundling them together? Providers use discounts to entice you to pay them for multiple services – but are bundles actually cheaper, or is it better to spread your eggs over multiple baskets?
Nearly all of the major power companies in New Zealand now offer internet plans too, including three of the four gentailers – Contact, Genesis and Mercury – and smaller providers like Nova and Electric Kiwi.
A few internet service providers – think 2degrees and Slingshot – go the other way, fortifying their bread-and-butter broadband by bundling it with electricity.
Providers all offer little bonuses with their bundles – $15 off per month, or a joining credit – to make you think you’re getting a deal. But is it just clever marketing?
Will bundling power and broadband actually save me money?
Maybe, but be careful.
If the provider already offers both power and broadband at a competitive price, a limited-time promotion or multi-service discount can edge a bundle ahead of the competition.
But bundles can offer less value than they seem, for two reasons.
1. They often lock you into a contract for at least a year
You won’t be able to take advantage of cheaper deals that come along in the meantime, and if your household situation changes, you might have to pay an expensive break fee or remain stuck on an unsuitable plan for the length of the contract.
2. Some of the advertised “discounts” are outright bogus
For example, at the time of writing, 2degrees advertises 10% off power when you have 2degrees broadband. But power is only available bundled with broadband, so it’s impossible to get the non-discounted price. At the addresses we tested, the rates for 2degrees power were at least 10% higher than other options – making for a more expensive bill even after applying the “discount”.
Our tip for getting the most out of bundles
If you signed up to a bundle for a short-term discount, credit or freebie, it’s especially important to check whether better prices are available once your initial contract ends. The company you’re with is probably using higher rates for long-term customers to subsidise perks for new customers.
If you’re willing to switch your power and broadband provider every year, bundles can be a great way to exploit the system. Don’t feel bad – you’re just fighting fire with fire.
Start your review with Powerswitch, our free and independent comparison site for electricity and gas. Try setting yourself an annual reminder to check you’re getting the best available deal.
Will my internet be as good if I get it from a power company?
Yes – probably.
If you’re on fibre, your choice of retailer only matters for the price and customer service you receive. Every company uses the same cables and infrastructure, and most offer plans with the same speeds.
For 4G or 5G wireless broadband, power companies piggyback off one of the three network operators – Spark, One NZ or 2degrees. You’ll receive service as if you were with that operator. If different networks get different reception in your area, find out which network your power company uses, so you can choose one with good coverage at your address.
Which power company has the happiest customers?
See the full ratings of all power companies in our nationally representative survey.
Will my power be as good if I get it from an internet company?
Yes.
Retailers all get electricity from the same grid, so your choice of provider has no effect on the quality of your electricity.
Can I save even more by bundling gas or mobile too?
Maybe, but the same warnings apply.
Our advice is just as applicable to other utility bundles, including your mobile data plan or piped gas.
There are savings to be had, and good service to be found in surprising places – providers best known for electricity have even topped our mobile satisfaction survey before. But you should still watch out for long contracts and prices rocketing once your offer period ends, and you should check annually for better deals.
When you have three or more utilities on the same bill, it can feel daunting to change providers. If splitting up those bills will save you money, don’t let the hassle of unbundling put you off.
