Mobile deja vu all over again

While the global market for "2.5G" products and services continues to grow apace annually, New Zealand's mobile market remains small, bound by the same old products of yesterday.

While the global market for “2.5G” products and services continues to grow apace annually, New Zealand’s mobile market remains small, bound by the same old products of yesterday.

SMS text messaging remains a favourite recycled success story of the New Zealand mobile industry while Europe and Asia, by comparison, have progressed to a repertoire of mobile applications and products used widely by adult consumers. IDC Research predicts the demand in Asia alone for downloadable products — for instance, ring-tones, software and screen wallpapers — will rise from $US1.3 billion in 2003 to $US3.6 billion by 2008.

Phones overseas have become independent, personalisable channels of consumption. These channels are forged by small, entrepreneurial content owners and providers bringing together interactive, fun content for consumers in the form of ring-tones and graphic displays by blending both text (SMS) and audio-visual (MMS). As mobile commerce grounds itself with ever more sophisticated products, the industry will no longer be shaped by large players (network operators) but by these innovative firms.

The provision and development of the content remains relatively inexpensive to establish, yet New Zealand consumers are offered a morsel of the vast content-rich product range appearing in Europe and Asia. The government’s telecommunications reform regime aims to principally ensure consumers receive competitive pricing, better services and faster delivery, but the government’s principles do not explain the lack of development of MMS. Some telecomms companies would lead us to believe — for example, Nokia’s Grant Norwood speaking to the NZ Herald last July — that the reason was because mobile phone usage in New Zealand is primarily for voice and that New Zealand consumers are resistant to upgrading technologies. Unfortunately such opinions are based on a lack of research or real knowledge of consumer behaviours and attitudes towards mobile usage in New Zealand.

Unlike the huge growth of the mobile commerce markets in countries like Thailand, Japan and China, ours are stagnant, and potentially anti-competitive business models adopted by network operators reduce the potential benefits to New Zealand consumers and the overall economy.

We have heard of at least one small entrepreneur MMS player who says Telecom and Vodafone have denied the business access to their networks to provide multimedia content to the New Zealand public, citing marketing reasons. Apart from the confusion of what this means, their behaviour restricts third party firms’ ability to market their products.

What is evident in the mobile industry is that as the market matures telecommunications players revenue stream per consumer declines over time. For instance, Telecom’s annual report for the year ending June 2002 showed a monthly ARPU (average revenue per user) for post-paid users fell from $74.3 (2001) to $72.2 (2002), while the decrease for prepaid users fell from $10.60 (2001) to $6.70 (2002). In terms of market growth, Telecom saw only negligible annual incremental rises, 0.8% for the year ending 30 June 2002. The figures are a tell-tale sign that the mobile sector needs to reinvigorate itself with advance products and services.

The mobile telecommunication players are far from resolving their own issues of growth and declining ARPU, which have a direct impact on consumer choice and the potential of increasing valuable growth for the overall economy. While the world’s mobile users strive to find the best wireless solution to personalise and in the process become more productive members of society, New Zealand consumers have a far greater distance to travel before such products become widely available.

Dr Robert Davis is a senior lecturer at the University of Auckland Business School and a co-director of Davis|Yung Consulting who researches and consults on mobile commerce and electronic commerce.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Networking & Telecomms ID

More about IDC AustraliaNokiaNorwoodVodafone

Show Comments