Australia’s economy is better positioned that most to weather the impact from the storm from the global financial crisis. However, as it enters a more dangerous phase, there now seems a much more strong probability that Australia’s economy will enter a recession. Falling consumer demand will put pressure on both residential and business telco product prices, over the next one to two years, and the crisis is likely to accelerate consolidation in the second and third tier Australian telco market. New Zealand’s telco sector will actually be better placed than that of Australia. Despite a potentially weaker economy as a result of the financial crisis, it has already put in place the framework for the rollout of its national telco infrastructure, which will hopefully begin to give second tier telcos a more level playing field in 2009 and 2010. The financial crisis is likely to put more pressure on market competition pricing in the South Pacific Islands, and this will actually favour new entrants such as Digicel over the incumbents, and allow them to accelerate their gain in market share, through more competitive service offerings.