Market Research Logo

2007 Mobile and Broadband in New Zealand

This report provides a detailed overview, including statistics, forecasts and analysis, of the mobile, Internet, broadband, convergence and broadcasting sectors of the New Zealand telecommunications market.

Key issues covered include:

The New Zealand mobile market is now approaching saturation and mobile subscriber growth will taper off significantly in 2007 and 2008.

During 2006 the trend of ISP consolidation slowed; however moving forward into 2007 and 2008, commoditisation of products is likely to see the speed of ISP consolidation pick up once again.

The long-awaited government policy that will pave the way for Local Loop Unbundling (LLU) was finally introduced in New Zealand in mid-2006. A growing number of wireless broadband players, including Woosh Wireless and CallPlus are also making some inroads into the market and this trend will continue into 2007.

The progressive introduction of ADSL2+ broadband will enable the delivery of new services on top of Telecom’s broadband infrastructure.

Services delivered over its NGN in 2007 and 2008 will include VoIP, video calling, converged fixed/mobile offerings, Interactive television and VoD.


The New Zealand mobile market is now approaching saturation and mobile subscriber growth will taper off significantly in 2007 and 2008. During 2006 the trend of ISP consolidation slowed; however, moving forward into 2007 and 2008, commoditisation of products is likely to see the speed of ISP consolidation pick up once again. The long-awaited government policy that will pave the way for Local Loop Unbundling (LLU) was finally introduced in New Zealand in mid-2006.

A growing number of wireless broadband players, including Woosh Wireless and CallPlus are also making some inroads into the market and this trend will continue into 2007. ADSL2 was the prevailing high-speed broadband technology deployed in New Zealand in late 2006. Broadcasting’s ad revenues are gradually being squeezed due to falling audiences and rising costs.

The progressive introduction of ADSL2+ broadband will enable the delivery of new services on top of Telecom’s broadband infrastructure. Services delivered over its NGN in 2007 and 2008 will include VoIP, video calling, converged fixed/mobile offerings, Interactive television and VoD.

This report provides a detailed overview, including statistics, forecasts and analysis, of the mobile, Internet, broadband, convergence and broadcasting sectors of the New Zealand telecommunications market.

Mobile

The current mobile market is a duopoly of Vodafone New Zealand and Telecom Mobile.

They operate the only cellular networks in the country, although Vodafone has also partnered with TelstraClear to resell its mobile offerings. Vodafone took the number one spot in mobile subscribers in New Zealand back in 2003 and now holds 55% of the subscriber market.

TelstraClear expects to launch Unplugged, its first high-speed mobile broadband and voice service, by mid-2007. A fourth player, Econet Wireless New Zealand (EWNZ) was, by late 2006, in the process of rolling out a network. The New Zealand mobile market is now approaching saturation and mobile subscriber growth will taper off significantly in 2007 and 2008.

Both Telecom and Vodafone launched 3G offerings during 2005, and in September 2006 Vodafone launched its upgraded HSDPA mobile broadband network capable of significantly faster speeds. Telecom plans to launch its upgraded EVDO Revision A network by the end of 2006.

Mobile technologies are not well suited for mobile data beyond certain niche markets. While these networks can handle high-speed data, it is unlikely that this will be able to be achieved at prices low enough to penetrate the mass market.

Broadband, Internet and data

During 2006 the trend of ISP consolidation slowed; however, moving forward into 2007 and 2008, commoditisation of products is likely to see the speed of ISP consolidation pick up once again.

The ISP market is expected to further consolidate beyond 2006, as more ISPs will financially struggle to survive. A growing number of wireless broadband players, including Woosh Wireless and CallPlus are also making some inroads into the market and this trend will continue into 2007. In August 2006 Orcon was preparing to deploy a high-speed broadband ADSL2+ network that will feature IPTV services. Wireless broadband remains very much a niche medium in New Zealand with usage restricted principally to regional areas outside the coverage of fixed ADSL and cable services.

New Zealand’s data market continues to outpace other market segment in terms of growth and market share. Life is getting tougher for the ISPs as customers migrate from higher margin dial-up services to the much lower margin broadband services.

The key to success in this market is the adoption by the Broadband Service Providers (BSPs) of the triple play model, delivering voice (VoIP), Internet access and video (broadband TV) over the one broadband connection. Driven by broadband, revenue growth in the data market is expected to increase to 11% in 2007 and 12% in 2008.

Broadcasting

A number of interesting urban and rural fibre network rollouts in New Zealand are laying the foundation for high-speed networks capable of triple play service delivery. The progressive introduction of ADSL2+ broadband will enable the delivery of new services on top of Telecom’s broadband infrastructure. Services delivered over its NGN in 2007 will include VoIP, video calling, converged fixed/mobile offerings, Interactive television and VoD. Vodafone’s merger with ihug in late 2006 opens up some exiting opportunities in the area of fixed-to-mobile convergence.

Broadcasting’s ad revenues are gradually being squeezed due to falling audiences and rising costs. In late 2006 New Zealand lagged behind most of the developed world in the transition to digital television. By this time in New Zealand, it was only being broadcast by pay TV operator SKY on a satellite platform in the DVB standard, which also rebroadcasts some radio services. In June 2006 the government anticipated transmission of FTA digital TV would begin early in 2007. SKY Network Television (SKY) is the only major service provider in the market. SKY has a retransmission agreement with TelstraClear under which TelstraClear operates its own network and manages all aspects of customer service.

1. MARKET AND INDUSTRY ANALYSIS
1.1 Overall market analysis
1.1.1 Making up the balance of Telecom’s promises
1.1.2 Scale and volume
1.1.3 Strong government policies
1.1.4 Share holders interest
1.1.5 Infrastructure problems
1.2 Analysis of the ISP industry
1.3 Broadband market
1.4 Mobile review
1.5 Changing the telecoms environment
1.5.1 Global Perspective 1
1.5.2 The policy changes in May 2006
1.5.3 Global perspective 2
1.6 NGN by 2008
1.7 Mobile on the way to 4G
1.8 Broadband moving to ADSL2
1.9 Digital media - where are the leaders?
1.10 Regulatory review
1.11 Structural vs operational separation
1.12 Unfinished regional business
2. KEY STATISTICS
3. MOBILE COMMUNICATIONS
3.1 Statistical overview
3.1.1 Subscriber and operating statistics
3.1.2 Revenue statistics
3.1.2.1 Overall revenue by operator
3.1.2.2 Monthly ARPU per operator
3.1.2.3 Other revenue
3.1.3 Telecom and Vodafone - Comparison of 3G offerings and retail outlets
3.2 Major mobile operators
3.2.1 Telecom Mobile
3.2.1.1 2G network
3.2.1.2 3G network
3.2.1.2.1 Overview
3.2.1.2.2 Products and services
3.2.1.2.3 Network development
3.2.1.2.4 Network upgrade - EVDO Revision A
3.2.2 Vodafone New Zealand
3.2.2.1 2G network
3.2.2.2 3G network
3.2.3 TelstraClear
3.2.3.1 Overview
3.2.3.2 TelstraClear to launch 3G network
3.2.4 Econet
3.2.4.1 Overview
3.2.4.2 3G network rollout developments
3.3 Market analyses - 2006
3.3.1 Mobile on the way to 4G
3.3.2 Mobile review in New Zealand
3.3.3 The confusing mobile market in New Zealand
3.3.4 Challenging road ahead for New Zealand mobile operators
3.3.4.1 New Zealand mobile market reaching saturation
3.3.4.2 Fixed-to-mobile substitution - a growing trend
3.3.4.3 3G will open up new niche revenue streams
3.3.4.4 Mobile networks not ideal for carrying data
3.3.4.5 Fixed-line players move into mobile operator’s territory
3.3.4.6 3G prices will drop forcing down ARPUs
3.3.5 Vindicated: 4G is arriving earlier
3.3.6 CDMA-based products on a steep decline in New Zealand and Australia
3.3.7 Analysis of MVNO developments
3.4 Market surveys - 2006
3.4.1 New Zealand mobile content market shows slow growth
3.4.2 Mobile pricing performance
3.4.3 Econet Wireless makes slow progress due to poor government regulation
3.5 Spectrum
3.5.1 Spectrum market and regulatory overview
3.5.1.1 Management Rights Regime
3.5.1.2 Impact of new technologies on spectrum usage
3.5.1.3 Licensed vs unlicenced spectrum
3.5.2 The Radiocommunications Act 1989
3.5.3 Market developments in 2006
3.5.3.1 New Zealand cellular spectrum review - July 2006
3.5.3.2 Expansion of spectrum allocation for wireless broadband
3.5.3.2.1 Update - July 2006
3.5.3.2.2 Update - November 2006
3.5.4 Market developments in 2005
3.5.4.1 Ultra-Wideband technology opportunities
3.5.4.2 Mobile spectrum developments
3.5.5 Unlicensed spectrum
3.5.6 Spectrum trading
3.5.7 Radio Frequency Identification (RFID)
3.5.7.1 Overview
3.5.7.2 New Zealand retailer explores implementation of RFID
4. BROADBAND MARKET
4.1 Overview and providers
4.1.1 Market overview
4.1.2 Broadband statistics
4.1.2.1 Local statistics
4.1.2.1.1 2006 statistics
4.1.2.2 Global statistics
4.1.2.3 Broadband and dial-up forecasts to 2011
4.1.2.3.1 Scenario 1 - slow broadband subscriber growth
4.1.2.3.2 Scenario 2 - higher broadband subscriber growth
4.1.3 Key market developments
4.1.3.1 Telecom upgrades broadband speeds
4.1.4 Market surveys
4.1.4.1 Roy Morgan survey
4.1.4.2 OECD survey on broadband adoption
4.1.4.3 Broadband service pricing performance
4.1.5 Broadband service providers
4.1.5.1 Telecom
4.1.5.2 TelstraClear
4.1.5.3 ihug
4.1.5.4 CallPlus
4.1.5.5 Woosh Wireless
4.1.5.6 Maxnet
4.1.5.7 CityLink
4.1.5.8 Wave Internet
4.1.5.9 Wired Country
4.1.5.10 ICONZ
4.1.5.11 Orcon Internet
4.1.5.11.1 Orcon to deploy ADSL 2+ high-speed broadband network
4.1.5.12 Reach Wireless
4.1.6 Technologies and solutions
4.1.7 Regional broadband initiatives
4.1.7.1 Introduction
4.1.7.2 Government’s Digital Strategy and Broadband Challenge initiative
4.1.7.2.1 Introduction
4.1.7.2.2 The Broadband Challenge
4.1.7.2.3 Broadband applications and grants issued - 2006
4.1.7.3 West Coast developments
4.1.7.4 Project Probe
4.1.7.5 E-regions
4.2 Wireless broadband
4.2.1 Market overview
4.2.2 WiFi
4.2.3 WiMAX
4.2.3.1 Overview
4.2.3.2 Market developments - 2006
4.2.3.2.1 nzwireless
4.2.3.2.2 National Communications
4.2.3.2.3 Compass
4.2.3.2.4 CallPlus and Slingshot
4.2.3.2.5 Woosh secures rights to WiMAX spectrum
4.2.3.2.6 Woosh partners with Hamilton for WiMAX network
4.2.3.2.7 Expansion of spectrum allocation for wireless broadband
4.2.3.2.8 CallPlus wins WiMAX spectrum allocation
4.2.4 Satellite
4.2.4.1 IPSTAR
4.2.4.2 ihug
4.2.4.3 ICONZ
4.2.4.4 Optus
4.2.4.5 PanAmSat
4.2.4.6 Government grants new satellite application New Zealand
4.2.5 Major players
4.2.5.1 Woosh Wireless
4.2.5.1.1 Overview and services
4.2.5.1.2 Acquisition of Quicksilver Internet
4.2.5.1.3 Strategy update - November 2006
4.2.5.1.4 Network rollout
4.2.5.1.4.1 Rights secured for WiMAX
4.2.5.1.5 Negotiations for trans-Tasman roaming rights
4.2.5.1.6 Subscribers and financial results
4.2.5.1.7 Technology overview
4.2.5.1.8 Company background
4.2.5.2 Broadcast Communications Ltd (BCL)
4.2.5.2.1 Launch of EXTEND wireless broadband service
4.2.5.3 Telecom’s wireless broadband services
4.2.5.3.1 Wireless hotspots
4.2.5.3.2 Other wireless broadband services
4.2.5.4 TelstraClear
4.2.5.5 Compass Communications
4.2.5.5.1 Wired Country
4.2.5.5.2 National Communications (NATCOM)
4.2.5.6 Reach Wireless
4.2.5.7 RoamAD
4.2.5.8 CityLink
4.2.5.9 ThePacific.Net
4.3 Analysis
4.3.1 The broadband market at the end of 2006
4.3.2 The Broadband Challenge (Digital Cities)
4.3.2.1 Warm fuzzy initiative
4.3.2.2 Where is the blueprint?
4.3.2.3 Not $24 million - $500 million is needed
4.3.2.4 Power to the cities
4.3.2.5 Ultimate solution is structural separation
4.3.2.6 Value-added infrastructure services
4.3.3 Boost for competition in New Zealand
4.3.3.1 More innovative services
4.3.3.2 Need for FttH infrastructure
4.3.3.3 Wake-up call for regional New Zealand
4.3.3.4 Does the Commerce Commission have the right powers?
4.3.3.5 Australia is facing implementation delays of six years
4.3.3.6 A can-do Telecom
4.3.4 Lies, lies and more lies - but from which side?
4.3.5 Brilliant tactics from Telecom
4.3.6 Old technology problems
4.3.7 Wireless questions
5. INTERNET AND ISP MARKET
5.1 Market overview and statistics
5.2 Market trends
5.2.1 ISP market will see further consolidation
5.2.2 Internet is the driver of the data market
5.2.3 Lower margins from broadband products
5.3 Market analysis
5.3.1 Revival of the ISP market
5.4 Where is the ISP market heading?
5.4.1 Triple play business models
5.4.2 VoIP
5.4.3 Broadband TV and IPTV
5.4.4 Internet media companies
5.5 Market surveys
5.5.1 Internet and broadband market survey - December 2005
5.6 Internet auctioning
5.6.1 Purchase of TradeMe by Fairfax New Zealand
5.7 Mobile banking
5.7.1 Kiwibank launches full service mobile banking
5.8 Historical statistics
6. DATA SERVICES
6.1 Market overview, analyses and trends
6.1.1 Introduction
6.1.2 Data market growth is accelerating
6.1.3 Internet is the driver of the data market
6.2 Data market statistics - 2006
6.3 Leased lines
6.3.1 Market survey - leased line performance
6.3.2 Market overview by Ministry of Economic Development
6.3.2.1 Introduction
6.3.2.2 Low-speed data links
6.3.2.3 High-speed data links
6.4 Data services - technologies
6.5 Global market trends and analyses
6.5.1 Data services will see a move to next generation technologies
6.5.2 Streaming video basis for broadband TV
6.5.2.1 What is it?
6.5.2.2 Streaming video in New Zealand
7. CONVERGENCE - TRIPLE PLAY MODELS
7.1 What is the triple play model?
7.2 The ABC of triple play - analysis
7.3 Infrastructure market
7.3.1 Content market
7.3.2 Appliances and services market
7.4 Triple play developments around the world
7.5 Triple play services in New Zealand
7.5.1 Telecom’s Next Generation Network
7.5.2 Triple play services and network rollouts in New Zealand
7.5.3 Video-over-IP broadcasting
7.5.4 Digital media analysis - where are the leaders?
7.6 Converging media services
7.6.1 Media centres in the home
7.6.2 Flat screen TVs
7.6.3 DVRs
7.6.4 DSL TV (IPTV)
7.7 Streaming video basis for broadband TV
7.7.1 What is it?
7.7.2 Streaming video in New Zealand
7.8 Market statistics - 2005
7.8.1 Triple play pricing
7.8.2 International benchmarking
7.9 Telcos - losers in the march of progress
7.9.1 Incumbent telcos and media companies - the cracks are appearing
7.9.2 Traditional businesses models are done for
7.9.3 Structural reforms are the only way forward
7.9.4 Keep an eye on BT and Internet companies
7.9.5 The Internet is rapidly becoming a national asset
7.10 Google takes on the media giants
8. BROADCASTING
8.1 Market overview
8.2 Free-to-Air (FTA) TV
8.2.1 Television New Zealand (TVNZ)
8.2.2 CanWest MediaWorks NZ
8.2.2.1 TVWorks - TV3 and C4
8.2.2.2 Company history
8.2.3 Prime Television New Zealand
8.2.3.1 Company history
8.2.4 Totaliser Agency Board (TAB)
8.3 Digital Free-to-Air (FTA) TV
8.3.1 State of play in late 2006
8.3.2 Government gives go ahead for digital TV rollout
8.3.3 Kordia’s digital TV rollout
8.4 Pay and cable TV (digital)
8.4.1 Market overview
8.4.2 Sky Network Television
8.4.2.1 Overview
8.4.2.2 SKY subscriber statistics
8.4.3 TelstraClear Saturn
8.4.4 Ethnic TV company to launch digital subscriber TV
8.4.5 Analysis of the pay TV market - October 2006
8.4.5.1 On paper SKY’s financial performance is strong yet again
8.4.5.2 Exorbitant prices places a ceiling on further pay TV market growth
8.4.5.3 Striking similarities exist with the Australian marketplace
8.4.5.4 Telecom’s market dominance only adds fuel to the fire
8.4.5.5 Lack of competition only stifles market innovation and consumer choice
8.5 Video-over-IP broadcasting
8.6 Digital radio
8.6.1 Digital Audio Broadcasting (DAB)
8.6.1.1 Kordia
9. GLOSSARY OF ABBREVIATIONS


LIST OF TABLES


Table 1 - Country statistics - 2006
Table 2 - Telecom revenue statistics - 2006
Table 3 - Telephone network statistics - 2006
Table 4 - Internet provider statistics - 2006
Table 5 - Internet user statistics - 2006
Table 6 - Broadband statistics - October 2006
Table 7 - Mobile statistics - June 2006
Table 8 - Broadcasting statistics - Pay TV and FTA TV - 2006
Table 9 - Mobile subscribers, annual change and penetration - 1995 - 2008
Table 10 - Mobile subscribers per operator and network - 2001 - 2007
Table 11 - Annual change in mobile subscribers per operator - 2002 - 2007
Table 12 - Market share of mobile subscribers per operator - 1995 - 2007
Table 13 − Percentage of prepaid customers per operator − 2005 - 2006
Table 14 − New Zealand 3G subscribers by operator− 2006
Table 15 - Telecom Mobile total call minutes and annual change - 2005 - 2006 18
Table 16 - Mobile market revenues by operator - 1997 - 2008
Table 17 - Mobile market revenue growth by operator - 1998 - 2008
Table 18 - Mobile market revenue market share by operator - 1997 - 2007
Table 19 - Monthly ARPU per operator - 2004 - 2006
Table 20 - Annual change in monthly total ARPU share per operator - 2005 - 2006
Table 21 - Mobile ARPU per operator and annual change - January 2006
Table 22 - Telecom’s mobile market revenue and growth - 2004 - 2005
Table 23 - Vodafone network cell sites - October 2006
Table 24 - Vodafone Group subscriber and revenue growth - New Zealand vs selected countries - 2005 - 2006
Table 25 - Pricing performance for mobile services - 2005*
Table 26 - Broadband subscribers by major provider- wireless and fixed-line access - 2004 - 2006
Table 27 - Total residential broadband subscribers by major provider - 2003 - 2006
Table 28 - Annual growth of residential broadband subscribers by major provider - 2004 - 2006
Table 29 - Percentage breakdown of residential subscribers per provider - 2004 - 2006
Table 30 - Telecom NZ, retail and business broadband subscribers - 1999 - 2006
Table 31 - Telecom NZ broadband subscribers (residential, business) & (wholesale, retail) & annual change - 2005 - 2006
Table 32 - Average maximum broadband speeds - 2006
Table 33 - Broadband & dial-up residential subscriber forecasts - low market growth scenario - 2003 - 2011
Table 34 - Broadband & dial-up residential subscriber forecasts - high market growth scenario - 2003 - 2011
Table 35 - Percentage of New Zealand homes with dial-up, broadband or Internet connection - 2004 - 2006
Table 36 - Percentage of New Zealand homes with broadband connection by city - 2004 - 2006
Table 37 - Woosh customer base - 2005 - 2006
Table 38 - Woosh revenue and annual change - 2004 - 2005
Table 39 - Woosh operating profit / (loss) - 2004 - 2005
Table 40 - Estimated number of ISPs - 1995 - 2008
Table 41 - ISP revenue estimates and annual change - 2002 - 2008
Table 42 - Dial-up subscribers per major ISP - 2002 - 2007
Table 43 - Dial-up subscribers per ISP - annual growth - 2003 - 2007
Table 44 - Dial-up subscribers per ISP - market share - 2002 - 2006
Table 45 - Telecom’s Xtra dial-up subscribers - 1997 - 2006
Table 46 - New Zealand & Australia - Internet, broadband pay TV, mobile & fixed-line penetration - 2001; 2004 - 2005
Table 47 - ISP revenue estimates (historical) - 1998 - 2001
Table 48 - Internet user and penetration statistics - 2004
Table 49 - Dial-up Internet subscribers per major ISP (historical) - 1998 - 2001
Table 50 - New Zealand data market revenues by sector - 2004 - 2007
Table 51 - New Zealand data market percentage growth by sector - 2005 - 2008
Table 52 - New Zealand data market percentage breakdown by sector - 2005 - 2007
Table 53 - Telecom NZ data revenue by sector and annual change - 2005 - 2006
Table 54 - Telecom NZ data revenue percentage by sector - 2005 - 2006
Table 55 - Data services - projected revenue changes by service category - 2005 - 2010
Table 56 - New Zealand triple play pricing - 2005
Table 57 - Percentage of operators globally offering unlimited nationwide fixedline calls - 2005
Table 58 - Triple play pricing with per-minute call charges - 2005
Table 59 - Double play pricing (voice and data) with per-minute call charges - 2005
Table 60 - Bit caps and corresponding service limits from off-network sources - 2005
Table 61 - FTA TV broadcasting statistics - 2006
Table 62 - Pay TV broadcasting statistics - June 2006
Table 63 - Total UHF, DBS & other subscribers - 2003 - 2006
Table 64 - Subscriber growth and annual change - 1993 - 2007
Table 65 - Average monthly revenue per residential subscriber and annual change - 2004 - 2006


LIST OF EXHIBITS


Exhibit 1 - Skype hacked by Telecom?
Exhibit 2 - Comparison of New Zealand’s mobile networks
Exhibit 3 - Comparison of 3G offerings from Telecom and Vodafone
Exhibit 4 - Telecom and Vodafone - number of retail outlets by distributor - 2006
Exhibit 5 - Vodafone HSDPA rollout timeframe & corresponding download speeds- 2006 - 2007
Exhibit 6 - The high cost of New Zealand mobile services - 2006
Exhibit 7 − Interesting spectrum developments
Exhibit 8 - Broadband service providers - 2006
Exhibit 9 - Why the average home will soon require 50Mb/s to the home
Exhibit 10 - Service parameters for residential broadband services
Exhibit 11 - Pricing performance for broadband services - 2004
Exhibit 12 - Pricing performance for leased line data services - 2005
Exhibit 13 - Access technologies
Exhibit 14 - Telecom convergence
Exhibit 15 - SKY Network Television at a glance - 2006

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report