ComCom analyses $4.91 billion telco spend

Market becoming more competitive says telecommunications commissioner

New Zealanders spent $4.91 billion on telecommunication services last year, according to the annual market monitoring report released by the Commerce Commission today.

The report shows that retail revenue was divided between $2.77 billion for fixed line services and $2.14 billion for mobile services.

Telecommunications Commissioner Ross Patterson says the latest report shows more competition in the market in the past six years.

“Most notably we’ve seen a fall in market concentration in all sectors which indicates that competition is becoming more intense. Consumers are being offered a more diverse range of competitively priced services, often bundled together in one package,” he says.

Fixed

Figure 17: Home internet connection market share from World Internet Report Survey

The report says the retail broadband market in New Zealand is “one of the least concentrated telco markets”.

The number of fixed line telephone connections has been stable in recent years while fixed broadband connections have grown steadily, more than doubling in size since 2006 to reach 1.09 million.

In addition, falling revenue from fixed line voice services “has largely been offset from increasing fixed line broadband and mobile revenues.” The report claims that the phone line in most households is likely to be "dominated by internet use, with only a relatively small amount of time spent making voice calls."

The average fixed line broadband subscriber is using around 10GB of data per month.

Unbundled lines grew to 105,000 by the end of 2011, and Patterson told a recent telecommunications conference that the number of unbundled exchanges is currently 140.

According to Akamai measurements, New Zealand’s broadband performance is slightly better than Australia’s with an average broadband speed of 3.8Mbps.

Mobile

The report shows that over 2010/11 mobile connections for Vodafone were “largely static”, while they fell for Telecom and rose for 2degrees. However, the report cautions that subscriber numbers may not match revenues. “According to 2degrees its share of total mobile revenues early in 2012 was, however, only 8 percent.”

Mobile broadband is “the big mover” according to the report, with the amount of mobile data consumed in 2011 nearly double the prior year.

Meanwhile the price of mobile data is falling. The average retail mobile data charge for 2010/11 was 12 cents per megabyte – a decrease on 20 cents per megabyte the year before.

According to the report it is cheaper to consume mobile data via a datacard/dongle then via a smart phone.

Investment

While total telco revenues have barely changed over the last six years [hovering under the $5 billion mark], total investment increased from $0.92 billion in 2005/06 to $1.24 billion in 2010/11.

“Investment peaked at $1.69 billion in 2008/09, pushed up by Telecom’s contribution of $1.21 billion,” the report says.

Non-Telecom investment ranged from $30 million to $484 million over the last six years.

The full report can be accessed here.

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