Publication Overview
For those needing detailed overviews, statistics and forecasts as well as objective analysis on all aspects of the New Zealand telecoms industry, this report provides essential reading and gives in-depth information on:
· Mobile industry
· Fixed and wireless broadband;
· Internet and ISP markets;
· Broadcasting market;
· Digital media and convergence.
Reseracher:- Phil Harpur
Current publication date:- December 2008 (12th Edition)
Next publication date:- December 2009
Executive Summary
BuddeComm’s 2009 New Zealand - Mobile & Broadband Overview & Analysis publication provides a detailed overview, including statistics, forecasts and analysis, of the mobile, Internet, broadband, convergence and digital media and broadcasting sectors of the New Zealand telecommunications markets.
Mobile market
Vodafone has been able to take the competitive advantage over the incumbent, Telecom, in the mobile market and the gap between itself and Telecom in this sector will continue to widen. It will now be a long and difficult road for Telecom over the next few years if it is to claw back market share from Vodafone, although its decision to go ahead with a more competitive 850MHz 3G HSPA network rollout to be launched by mid-2009, will point it in the right direction.
Mobile subscriber growth will continue to taper off moving into 2009 and 2010; a growth rate of 4% is predicted for 2008/09 and 3% for 2009/10.
Broadband market
New Zealand is finally catching up with the rest of the world in terms of broadband penetration, with strong subscriber growth predicted to continue into 2009. However, low broadband access speeds and high costs relative to other OECD nations are still proving to be major stumbling blocks for the development of local digital media activities.
The data market is being strongly driven by the broadband sector which displayed 21% annual growth. Strong broadband growth is set to continue over the next few years. As customers migrate from dial-up to broadband, dial-up revenues continue to decline.
Data market revenue growth – broadband, dial-up and other data – 2005 - 2010
|
Year
|
Broadband
|
Dial-up
|
Total Internet
|
Other data
|
Total data market
|
|
2005
|
|
|
|
|
7.4%
|
|
2006
|
25.8%
|
-13.9%
|
8.7%
|
7.7%
|
8.2%
|
|
2007
|
29.1%
|
-20.9%
|
12.0%
|
4.0%
|
7.8%
|
|
2008
|
21.2%
|
-29.6%
|
8.9%
|
5.2%
|
7.0%
|
|
2009 (e)
|
17.0%
|
-30.0%
|
8.1%
|
8.2%
|
8.2%
|
|
2010 (e)
|
16.0%
|
-30.0%
|
10.1%
|
6.1%
|
8.1%
|
(Source: BuddeComm based on company data)
Broadband infrastructure policy
On paper the new government’s infrastructure policy and FttH vision looks promising. However, it remains to be seen whether National will be able to pull off its ambitious nationwide network plan. There is no doubt that FttH should be the end goal of any country’s infrastructure policy; however BuddeComm questions whether National has fully thought through the all the steps that will be needed to implement it. For starters, a key question is how a FttH rollout would impact emerging LLU providers like Vodafone and Orcon. A plan is needed that not only ensures a high-speed national network is built, but also ensures a clear path is established that will enable continued growth of healthy competition in New Zealand.
Digital media and convergence
Digital media companies will play an increasingly important role in the telecommunications market, whereas the traditional telecom providers will become more confined to providing the telecommunications plumbing with third party organisations such as YouTube dominating delivery of the content or services.
In the local New Zealand market we can already see the early signs of the more entrepreneurial e-services customers planning new broadband associated content services. These applications are however quite niche-specific and are unlikely to generate significant revenues over the next two years.
Key highlights:
Wireless broadband
· Mobile broadband will become the hot topic in 2009 and 2010.
· It still hasn’t hit the market to the same extent as it has in Australia, but with Telecom launching its HSPA network by mid-2009, healthy competition between Telecom and Vodafone should begin to develop. It will be interesting to see what dynamics this will create in the fixed broadband market.
Mobile
· Moving into 2008/09 and 2009/10, revenue growth rates of 5.4% and 6.3% respectively are predicted for the overall market.
· Telecom is expected to pick up some ground in 2008/09, but it will not be until 2010, when the impact of Telecom’s new 3G HSPA network filters through to Telecom’s bottom line, that its annual gain in revenue will be more in line with Vodafone’s.
Digital media and broadcasting
· While business and residential telecom services revenues will continue to grow steadily over the next ten years to 2018, there will be explosive growth from content and permission-based revenues in the residential sector. This content and advertising revenue stream will grow from 11% in 2008 to 29% of the total telecommunications market by 2018.
· The FTA networks are expected to see intense competition for viewers and advertising in 2009 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing.
Data in this report is the latest available at the time of preparation and may not be for the current year.