2014 New Zealand - Telecoms, Mobile, Broadband and Forecasts
This report provides a snapshot of key statistical data for New Zealand’s telecom market. It includes information on:
Country statistics – GDP information and population;
Internet and Broadband – subscribers, users and penetration rate;
Mobile – subscribers, annual change and penetration rate;
Telephone network – fixed-lines and teledensity;
Telecom investment and revenue data;
Broadcasting – Pay TV subscribers and penetration rate.
The report includes information on: Telecom, Vodafone, Chorus, Kordia, CallPlus, M2, WxC, and Southern Cross Cable.
It also outlines recent key regulatory developments in the New Zealand telecom market, and including developments on Telecommunications Service Obligations (TSOs) and Telecommunications Relay Service. Information on the Telecommunication Development Levy that will fund some of the outlay for Rural Broadband Initiative is provided. An overview of the Telecommunications Dispute Resolution is also provided. Information on the proposed 700MHZ spectrum DSO and auctions is also provided.
Researchers: Henry Lancaster, Paul Budde Current publication date:- November 2013 (17th Edition)
New Zealand telecoms market to reach to NZ$5.35 billion in 2014
The Telecoms Market Moving Into 2014
Activity in the UFB market is progressing steadily, with a growing number of connections to schools, businesses and consumers. Premises are migrating from copper to fibre, and with it consumers are able to make greater use of IP-delivered content and services provided by faster speeds. Activity in the other telecoms markets has developed following the launch of LTE services by both Vodafone and Telecom.
The fixed-line voice market (voice calls and local access) continues to lose overall share of the telecom services market, partly caused by the drop in call prices and volumes as the uptake of mobile and other P2P services continues.
The fibre-backbone network will become the predominant infrastructure and it will provide its services to the other market sectors including energy, manufacturing, healthcare, education, as well as the rural sector through wireless access. With all these sectors involved we will see the telco businesses morph from the traditional telephony access provider to content service providers. Telcos, ISPs and the other service providers will have an opportunity to become the ICT providers to these market sectors.
The larger sectors, in particular, will create a large demand for value-added infrastructure services. All of this will assist the industry to double its size to more than $14 billion by 2020. In this report we provide scenario-based forecast for the mobile sector as well as some market forecasts and background information on the other markets in the economy.
In late 2013 Telecom launched commercial LTE services, competing with Vodafone which had launched the South Island’s first LTE network earlier in the year, complementing an existing service in Auckland.
Mobile market penetration, at around 120-125%, is growing steadily as operators provide add-on packs attracting increased usage at a lower cost. With spectrum auctions allowing for the expansion of LTE networks, and further regional deployment of 3G coverage under the RBI, we expect to see steady subscriber growth across the networks.
New Zealand’s third mobile operator 2degrees has enjoyed solid subscriber growth since launching services in 2009. The operator has around 20% overall market share of subscribers and a 12% share of mobile services revenue. Having secured spectrum in the 700MHz band in late 2013, the company may nevertheless find it difficult to compete against Vodafone and Telecom after the remaining block of 2x5MHz spectrum is auctioned: if either of the main players secure this block they would have twice the allocation of 2degrees.
Further consumer take-up of mobile broadband services is anticipated following the auction of digital dividend spectrum in the 700MHz band, as this spectrum is put to use to deliver mobile data.
New Zealand has enjoyed one of the highest yearly increases in fixed broadband penetration in recent years. The overall number of broadband subscribers grew by just under 10% in 2013, maintaining the momentum seen since 2010. The principal growth areas have been in the mobile broadband and fibre sectors. The number of fibre subscribers will continue to increase substantially over the coming years as the ultra-fast broadband service for urban dwellers sees increased uptake among consumers.
The uptake of mobile broadband will be bolstered by the expansion of mobile technologies based on LTE, and be supported by the Rural Broadband Initiative rollout which will add a large number of mobile cells to new areas. Although growth in the number of mobile broadband subscribers will slow as mobile penetration becomes further saturated, a further stimulant is expected from the impetus of the younger demographic migrating from fixed-line to mobile-only broadband services.
The uptake of fibre was slow during the first year of deployment as such new developments must compete with existing technologies and many customers have waited for existing contracts with ISPs to expire before switching to a new provider.
The number of mobile broadband subscribers increased by around 10% in 2013, while the number of mobile internet handset connections grew by almost 30%. Higher growth rates have been stymied by the lack of ubiquitous mobile broadband coverage, as well as the high cost of such services on a short-term basis. Some of these issues should be addressed in coming years through the extension of services based on LTE by Vodafone and Telecom, and by their anticipated introduction from 2degrees in 2014. The national availability of reliable and fast mobile broadband services will be crucial if all citizens are to take advantage of new opportunities offered.
Competition in the delivery of mobile broadband from the telcos is pushing down prices while contributing to even greater regional coverage. The commitment from the government and the ongoing multi-million dollar investment in delivering widespread access to high-speed broadband may present a further hurdle for wireless providers, given that the national UFB/RBI infrastructure will close most of the gaps in coverage.
Digital Economy and Digital Media
The digital economy across New Zealand will have the necessary infrastructure for development to ignite e-government, e-commerce and digital media across the country once the Ultra-fast broadband / Rural Broadband Initiative (UFB/RBI) is completed during the next 5-10 years.
By the end of 2014 almost 400,000 premises will be connected to the network, increasing to about 1.2 million by 2019. Businesses and residences will be able to access data rates ten times faster than current rates, enabling them to operate services in the cloud and take better advantage of opportunities within the global market place. The digital economy will be driven by some of the digital media companies that continue to play an increasingly important role in the telecommunications markets.
FTA television and the pay TV sector are revising their business models to adapt to the growing trend among consumers to view online content rather than linear TV. The trend has become acute during the last two years as telecom infrastructure has improved, allowing a greater proportion of consumers to take advantage of content from YouTube and other video sites, as well as catch-up services. The broadcasting and digital media industries are having to keep up with these changes in the market place.
Pay TV penetration in New Zealand was around 50% by late 2013. The introduction of the cut-price monthly subscription model, Igloo, in late 2012 may increase household penetration but the real threat is that this model will cannibalise the existing user base as customers churn to cheaper monthly rates. As the UFB consumer base eventually increases other competitive threats by other media models will see uptake of other media based subscription services, lowering the viability of the current model.
Data in this report is the latest available at the time of preparation and may not be for the current year
Table of Contents
1. The Market Moving into 2014
1.1 Competitive landscape
1.1.1 New Zealand’s 2nd tier players squashed
1.1.2 Is consolidation needed for future survival
1.1.3 Fibre will provide more access to service
1.2 The UFB and RBI
1.2.1 UFB analysis
1.2.2 Overbuilding the networks overspends the investment dollar
1.3 Mobile market
1.3.1 Will TelstraClear’s new owner add value to the market
1.4 Developments in cloud services and big data
1.4.1 Growth in crowdsourced data collection
1.4.2 Big data and the growth in M2M
1.5 Consumer prices
1.5.1 Higher price points leads to lower uptake
1.5.2 The hidden cost of increased UFB uptake
2. Statistical Overview of the Market
2.1 Key statistics
2.2 Local access and fixed voice overview
2.2.1 Fixed-line voice market
2.2.2 Smaller players operate in niche markets
2.3 VoIP market
2.3.1 Market overview
2.3.2 Market size and estimates
2.3.3 Residential sector
2.3.4 Business sector
2.4 Fixed-Mobile Convergence (FMC)
2.4.2 Service bundling
2.4.3 Dual-mode services
2.4.4 Network convergence
2.4.5 International cable updates
2.5 Smart grid developments
3. Market Forecasts 2015, 2020
3.1 Market overview
3.1.1 Media market
3.1.2 Total overhaul of the telecoms industry
3.1.3 Infrastructure market
3.1.4 The retail market
3.1.5 The trans-sector market
3.2 The fixed broadband market
3.2.1 Setting the scene
3.2.2 Fixed broadband market forecasts
3.3 The mobile market
3.3.1 Overview of changes
3.3.2 Mobile market scenarios
4. Regulatory Overview
4.2 UBA, UCLL, LLU and UBS access market developments
4.2.1 Determination on wholesale services - 2013
4.2.2 Minor changes post Telecom and Chorus demerger
4.3 Mobile regulation developments
4.3.1 Mobile Termination Rates (MTRs)
4.3.2 Micropayments using PayforitNZ approved
4.4 Spectrum market
4.4.1 Background information
4.4.2 Spectrum and auctions
4.4.3 Analogue Switchover (ASO)
4.5 Telecommunications Service Obligations (Kiwi Share)
4.5.2 Telecommunications Development Levy – 2010 - 2017
4.5.3 TDL changes
4.6 Telecommunications Relay Service (TRS)
4.6.2 Cost of the TSR
4.7 Telecommunications Dispute Resolution (TDR)
4.7.1 Scheme overview
4.8 Number Portability (NP)
5. Mobile Communications
5.1 Mobile market overview
5.2 Major mobile operators
5.2.1 Telecom Mobile
5.2.2 Vodafone New Zealand
5.2.3 2degrees Mobile
5.3 Mobile Virtual Network Operators (MVNOs)
5.4 Mobile market analysis
5.4.1 700MHz Spectrum auction
5.5.1 Operating statistics
5.5.2 Historic statistics
5.5.3 Revenue analysis
5.5.4 Mobile revenue statistics
5.5.5 Number portability
5.5.6 Smart device market
5.6 Mobile Messaging
5.6.1 Short Message Service (SMS)
5.7 Mobile content and applications
5.7.1 International mobile roaming (IMR)
5.7.2 NFC payments trials
5.7.3 Joint venture for Trusted Service Manager (TSM)
6. The Broadband Market
6.1 Statistics, Overview and Providers
6.1.1 Overview of fixed broadband market in New Zealand
6.1.2 The ISP market
6.1.3 Broadband statistics and forecasts
6.1.4 Major broadband service providers
6.1.5 Fibre developments
6.1.6 WiFi developments
6.2 Ultra-Fast Broadband Network
6.2.1 Background information
6.2.2 Deployment developments
6.2.3 Will the deployment strategy last
6.2.4 The backbone network
6.2.5 New networks adding financial value to the economy
6.2.6 VDSL developments
6.2.7 Proposed new UFB services for 2014
6.2.8 Rural Broadband Initiative (RBI)
6.2.9 BuddeComm analyses
6.2.10 Overview of involved parties
6.3 Wireless Broadband
6.3.5 Major wireless broadband providers
7. Digital Economy and Digital Media
7.1 The digital economy – a key market driver
7.2 Policies and infrastructure
7.2.2 The Ultra-Fast Broadband network – getting connected
7.2.3 New Zealand’s current broadband network
7.3 Digital economy in New Zealand
7.3.1 Overview of the indicators
7.4.1 Overview and statistics
7.4.2 Daily-deal coupon sites still growing in popularity
7.4.3 Trade Me
7.4.4 Global newcomers to e-commerce in New Zealand
7.4.5 Online music
7.5.2 Personal health care records
7.6 Smart meters/smart grids
7.6.2 Renewable energy use target set for 2025
7.6.3 Electric vehicles trials and wireless chargers
7.6.4 Pilots and trials
7.6.5 Smart meters finally getting smart
7.6.6 Smart grids starting to roll out
7.6.7 Auckland network smart meters
7.6.8 Google PowerMeter installed in New Zealand
7.6.9 Smart networks
7.6.10 Smart homes
7.6.11 Time shifting of power usage
7.7 Digital media
7.7.1 IPTV (DSL TV)
7.7.2 Mobile TV
7.7.3 Social networking
8. Major Operators
8.1 Telecom Corporation New Zealand
8.1.1 Company overview
8.1.2 Background information on the demerger of Chorus and assets
I have both worked with Paul and valued his opinion on many occasions. Following, his many comments on the telecommunications industry has been rewarding and insightful. His reports have always been of value and help guide us through the maze of jargon, politics and defined the real road map of this complex industry.
David Hayes, Country Manager - Australia at Bulletin Wireless