New Zealand Telecommunications Report Q4 2017

BMI View: Organic growth in the mobile segment will remain slow as the penetration rate inches towardsthe 134% mark. The 3G/4G LTE segment will see steady growth as operators continue to invest in highspeedadvanced solutions across the country. Furthermore, the regulators blocked the planned merger ofVodafone and Sky in early 2017, amid concerns that the enlarged entity would have dominated NewZealand's wireline and mobile broadband markets. That decision seems likely to stand given the small sizeof the market and the small pool of service providers available to consumers. We believe the merger wouldhave driven innovation in product pricing and bundling and made greater use of national and rural fibrenetworks. The decision to block the merger, on the other hand, benefits 2degrees, the smallest mobileoperator, giving it time to further develop its premium converged services business.

Latest Updates & Industry Developments

All mobile connections to be on 3G/4G networks by 2020, although 2G platforms will still be availablefor machine-to-machine (M2M) applications. We now forecast 6.435mn mobile subscriptions by 2021.