New Zealand - Market Analysis - The market in 2010

Synopsis

Unprecedented activity is taking place in the New Zealand telecoms market. Hot on the heels of functional separation, which led to an increase in competition, the new government has launched its fibre plans, aimed at economic stimulation and innovation. This is adding to the complexity of the market and forcing all players to review their business models and business plans. Telecom’s position is interesting. On the one hand it appears to be sidelined by the plans; however its position in New Zealand continues to be as dominant as ever and it certainly does have alternatives that could derail the government’s plans. The functional separation has allowed other players in the fixed market to improve their margins and to increase their market share. All options are being kept open by these players but it is very likely that LLU consolidation will take place in 2010. In the mobile market there is also a flurry of activity. 2degrees innovative way of giving away SIMS has caught the attention of the two incumbents. New investments in HSPA networks are making companies such as Vodafone concentrate on their core mobile business. Despite all of these activities and new investments the overall revenues in the market are not growing and this is putting all the players in the market under continued financial pressure.