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2009 New Zealand - Mobile and Broadband Overview & Analysis

For those needing detailed overviews, statistics and forecasts as well as objective analysis on all aspects of the New Zealand telecoms industry, this report provides essential reading and gives in-depth information on:

  • Mobile industry
  • Fixed and wireless broadband;
  • Internet and ISP markets;
  • Broadcasting market;
  • Digital media and convergence.
Reseracher:- Phil Harpur

Current publication date:- December 2008 (12th Edition)

Next publication date:- December 2009


BuddeComm’s 2009 New Zealand - Mobile & Broadband Overview and Analysis publication provides a detailed overview, including statistics, forecasts and analysis, of the mobile, Internet, broadband, convergence and digital media and broadcasting sectors of the New Zealand telecommunications markets.

Mobile market
Vodafone has been able to take the competitive advantage over the incumbent, Telecom, in the mobile market and the gap between itself and Telecom in this sector will continue to widen. It will now be a long and difficult road for Telecom over the next few years if it is to claw back market share from Vodafone, although its decision to go ahead with a more competitive 850MHz 3G HSPA network rollout to be launched by mid-2009, will point it in the right direction.

Mobile subscriber growth will continue to taper off moving into 2009 and 2010; a growth rate of 4% is predicted for 2008/09 and 3% for 2009/10.

Broadband market
New Zealand is finally catching up with the rest of the world in terms of broadband penetration, with strong subscriber growth predicted to continue into 2009. However, low broadband access speeds and high costs relative to other OECD nations are still proving to be major stumbling blocks for the development of local digital media activities.

The data market is being strongly driven by the broadband sector which displayed 21% annual growth. Strong broadband growth is set to continue over the next few years. As customers migrate from dial-up to broadband, dial-up revenues continue to decline.

Data market revenue growth - broadband, dial-up and other data - 2005 - 2010
Year Broadband Dial-up Total Internet Other data Total data market
2005 7.4%
2006 25.8% -13.9% 8.7% 7.7% 8.2%
2007 29.1% -20.9% 12.0% 4.0% 7.8%
2008 21.2% -29.6% 8.9% 5.2% 7.0%
2009 (e) 17.0% -30.0% 8.1% 8.2% 8.2%
2010 (e) 16.0% -30.0% 10.1% 6.1% 8.1%
(Source: BuddeComm based on company data)

Broadband infrastructure policy
On paper the new government’s infrastructure policy and FttH vision looks promising. However, it remains to be seen whether National will be able to pull off its ambitious nationwide network plan. There is no doubt that FttH should be the end goal of any country’s infrastructure policy; however BuddeComm questions whether National has fully thought through the all the steps that will be needed to implement it. For starters, a key question is how a FttH rollout would impact emerging LLU providers like Vodafone and Orcon. A plan is needed that not only ensures a high-speed national network is built, but also ensures a clear path is established that will enable continued growth of healthy competition in New Zealand.

Digital media and convergence
Digital media companies will play an increasingly important role in the telecommunications market, whereas the traditional telecom providers will become more confined to providing the telecommunications plumbing with third party organisations such as YouTube dominating delivery of the content or services.

In the local New Zealand market we can already see the early signs of the more entrepreneurial e-services customers planning new broadband associated content services. These applications are however quite niche-specific and are unlikely to generate significant revenues over the next two years.
Key highlights:
Wireless broadband

  • Mobile broadband will become the hot topic in 2009 and 2010.
  • It still hasn’t hit the market to the same extent as it has in Australia, but with Telecom launching its HSPA network by mid-2009, healthy competition between Telecom and Vodafone should begin to develop. It will be interesting to see what dynamics this will create in the fixed broadband market.
  • Moving into 2008/09 and 2009/10, revenue growth rates of 5.4% and 6.3% respectively are predicted for the overall market.
  • Telecom is expected to pick up some ground in 2008/09, but it will not be until 2010, when the impact of Telecom’s new 3G HSPA network filters through to Telecom’s bottom line, that its annual gain in revenue will be more in line with Vodafone’s.
Digital media and broadcasting
  • While business and residential telecom services revenues will continue to grow steadily over the next ten years to 2018, there will be explosive growth from content and permission-based revenues in the residential sector. This content and advertising revenue stream will grow from 11% in 2008 to 29% of the total telecommunications market by 2018.
  • The FTA networks are expected to see intense competition for viewers and advertising in 2009 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing.
Phil Harpur
November 2008

Data in this report is the latest available at the time of preparation and may not be for the current year.

For those needing detailed overviews, statistics and forecasts as well as objective analysis on all aspects of the New Zealand telecoms industry, this report provides essential reading and gives in-depth information on:
  • Mobile industry
  • Fixed and wireless broadband;
  • Internet and ISP markets;
  • Broadcasting market;
  • Digital media and convergence.

1.1 Overview and analyses
1.1.1 Market outlook for
1.1.2 Questions surround National NZ’s new ambitious broadband policy
1.2 Revenues statistics and forecasts
1.2.1 Revenue statistics by major provider
1.2.2 Broadband and data market
1.3 Digital media
1.4 Infrastructure - NGN and FttH
1.5 Broadcasting
1.6 Crisis and recession is hitting New Zealand hard
1.7 Infrastructure to stimulate the economy
1.7.1 Fibre lifeline from the new government
1.7.2 Don’t roll out fibre without a plan for services
1.7.3 Whole-of-government approach is essential
1.8 Mixed blessings from functional separation
1.8.1 More aggressive Telecom
1.8.2 No wholehearted wholesale
1.8.3 No mobile wholesale
1.8.4 Still no certainty regarding fibre wholesale
1.8.5 Broadband problems moving from penetration to speed
1.9 Mobile
1.9.1 2009 the year of mobile competition
1.9.2 Hello to TelstraClear - good to see you again
1.9.3 Unique telecoms situation in New Zealand
1.10 Expect disruptive wireless broadband
1.11 Conclusions
3.1 Market analysis
3.1.1 Market overview
3.1.2 Bill and Keep
3.2 Statistical overview
3.2.1 Operating statistics, forecasts & analysis
3.2.2 Revenue statistics Market analysis Revenue statistics & forecasts by operator Monthly ARPU per operator
3.2.3 Number portability begins to take off
3.2.4 Telecom and Vodafone - comparison of 3G networks outlets
3.3 MVNO activity
3.4 Major mobile operators
3.4.1 Telecom Mobile 2G network Legacy analogue network closed 3G EV-DO network Overview Network development Products and services Network upgrade - EV-DO Revision A 3G WCDMA (HSPA) network Initial network proposal - 2100MHz and 850MHz network Network rollout progress Final proposal - 850MHz network only Market analysis Products and services to be offered Future network upgrade path Network agreements Agreement with Brightstar
3.4.2 Vodafone New Zealand Overview 2G network 3G WCDMA network HSDPA 3G network upgrade WCDMA 900MHz network upgrade extension
3.4.3 TelstraClear Overview MVNO deal with Telecom
3.4.4 New Zealand Communications Ltd Overview Financial results - Network rollout Roaming/co location deals Vodafone Optus 3G network rollout history
3.5 Spectrum market and regulatory overview
3.5.1 Management Rights Regime (MRR)
3.5.2 Impact of new technologies on spectrum usage
3.5.3 Licensed versus unlicensed spectrum
3.6 The Radiocommunications Act 1989
3.6.1 Recent developments
3.7 Market developments in 2008
3.7.1 Spectrum agreements with Telecom and Vodafone
3.7.2 Review of spectrum allocations for Broadband Wireless Access (BWA)
3.7.3 Renewal of rights to 800/900MHz cellular spectrum
3.7.4 Telecom looks to acquire wireless spectrum
3.7.5 WiMAX licence owners concerned about spectrum cap
3.7.6 3.5GHz spectrum for tender
3.8 Unlicensed spectrum
3.9 Spectrum trading
3.10 Radio Frequency Identification (RFID)
3.10.1 Overview
3.10.2 Retailer explores implementation of RFID
4.1 Fixed line broadband
4.1.1 Market overview
4.1.2 ISP market overview and statistics
4.1.3 Broadband statistics, analysis and forecasts Total market Telecom NZ
4.1.4 Market surveys International bandwidth a barrier to growth Statistics New Zealand ISP survey
4.1.5 Broadband service providers CallPlus ICONZ Vodafone Maxnet Snap Telecom TelstraClear Orcon Internet Overview Financial and operating statistics Kordia acquires Orcon Products and services DSLAM rollout MVNO deal
4.1.6 Technologies and solutions
4.1.7 Government broadband policies Introduction The new government’s broadband plan Government’s Digital Strategy and Broadband Challenge initiative Introduction Revised digital strategy 2. Updated strategy for broadband rollout Background The Community Partnership Fund The Broadband Challenge fund Broadband Investment fund Government’s broadband strategy roadmap - early Overview Accelerated investment in FttN Infrastructure is necessary Telecoms under investment in rural telecommunications Health and education strategy West Coast developments Project Probe E-regions
4.2 Wireless broadband
4.2.1 Market overview
4.2.2 WiFi Kordia enters municipal WiFi market
4.2.3 WiMAX WiMAX analysis Local market overview
4.2.4 Satellite IPSTAR ICONZ Optus PanAmSat
4.2.5 Major players Compass Communications Services Network Wired Country Kordia (Broadcast Communications Ltd) National Communications Corporation Ltd (NATCOM) nzwireless Swiftnet Services Company background and network rollout RoamAD TelstraClear Vodafone Woosh Wireless Overview WiMAX activities Strategy overview Operating statistics and financial results Company History
5.1 Trends in convergence and digital media
5.1.1 Triple play and quadruple play services
5.1.2 Digital media will be the key market driver in the telco market
5.1.3 The rise of content-based services
5.1.4 E-health
5.2 Government initiatives
5.2.1 Digital strategy 2.
5.3 Market surveys
5.3.1 Cisco Connected Consumer survey Introduction Key statistics and international comparisons Downloaded video statistics Drivers for watching online content and consumer choice Ownership of access devices Storage of digital media
5.4 Converging digital media services by application
5.4.1 Home media centres
5.4.2 Broadband - home networks
5.4.3 DVRs
5.4.4 Flat screen TVs
5.4.5 IPTV (DSL TV) Local developments Telecom New Zealand TelstraClear Orcon Internet SKY TVNZ
5.4.6 Online music and MP Overview Telecom’s Music Store
5.4.7 Mobile TV Overview Local developments Vodafone/Sky
5.4.8 Mobile media Key players iTouch
5.4.9 Internet portals and online applications Online and digital media TelstraClear - digital content
5.4.10 Social networking Social networking isn’t diminishing TV viewing patterns
5.5 Smart meters/smart grids
5.6 Analysis - what went wrong with triple play?
5.6.1 VoIP and video - hard nuts to crack
5.6.2 TV camera in front of radio programs
5.6.3 FASTWEB is leading the charge for change
5.6.4 Triple play soon to be forgotten
6.1 Market overview
6.2 Free-to-Air TV
6.2.1 Television New Zealand (TVNZ) Overview Channel overview TVNZ multi-platform strategy overview TVNZ on demand TV service launch Market statistics
6.2.2 MediaWorks NZ TVWorks - TV3 and C RadioWorks Company history
6.2.3 Prime Television New Zealand
6.2.4 Totaliser Agency Board (TAB)
6.3 Digital FTA TV
6.3.1 Freeview (FTA digital TV service) Overview Content and other networks Technology
6.4 Pay and cable TV (digital)
6.4.1 Market overview
6.4.2 SKY Network Television Overview Strategic analysis Satellite coverage Services Personal Video Recorder (PVR) Online DVD rental Movie on-demand MovieLink and SKY DMX Music Mobile TV and mobile video clips Launch of SKY Online Potential IPTV services SKY subscriber statistics Financial results Acquisition of Prime TV Partnerships - TelstraClear and Woosh Wireless
6.4.3 TelstraClear
6.4.4 Mirchee TV
6.4.5 Pay TV market analysis
6.5 IPTV
6.6 Video-over-IP broadcasting
6.7 Digital radio
6.7.1 Digital Audio Broadcasting (DAB)
6.7.2 Digital radio trials Kordia
Table number:
Table 1 - Telco market revenue by major provider - 2006 - 2010
Table 2 - Annual change of telco market revenue by major provider - 2007 - 2010
Table 3 - Percentage breakdown of telco market revenue by major provider - 2006 - 2010
Table 4 - Data market revenue - broadband, dial-up and other data - 2004 - 2010
Table 5 - Data market revenue growth - broadband, diaup and other data - 2005 - 2010
Table 6 - Country statistics New Zealand - 2008
Table 7 - Telecom revenue statistics - 2008 - 2010
Table 8 - Telephone network statistics - 2008
Table 9 - Internet provider statistics - 2008
Table 10 - Broadband statistics - June 2008
Table 11 - Mobile statistics - June 2008
Table 12 - Broadcasting statistics (pay TV and FTA TV) - 2008
Table 14 - Mobile subscribers, annual change and penetration rate - 1995 - 2010
Table 15 - Mobile subscribers by operator - 2001 - 2010
Table 16 - Annual change in mobile subscribers by operator - 2002 - 2010
Table 17 - Market share of mobile subscribers by operator - 1995 - 2010
Table 18 - Mobile subscribers by technology - 2007 - 2008
Table 19 - Percentage of mobile subscribers by technology - 2007 - 2008
Table 20 − 2G subscribers by operator − 2006 - 2009
Table 21 − 3G subscribers by operator − 2006 - 2009
Table 22 − Percentage 3G subscribers by operator − 2006 - 2009
Table 23 − Percentage of prepaid customers per operator − 2005 - 2008
Table 24 - Telecom Mobile total annual call minutes and annual change - 2005 - 2007
Table 25 - Mobile market revenues by operator - 1997 - 2010
Table 26 - Mobile market revenue growth by operator - 1998 - 2010
Table 27 - Market share of mobile market revenue by operator - 1997 - 2010
Table 28 - Average monthly ARPU per operator - prepaid/postpaid - 2004 - 2008
Table 29 - Monthly ARPU per mobile operator by category - 2008
Table 30 - Vodafone 2G and 3G network cell sites
Table 31 - Estimated number of ISPs - 1995 - 2009
Table 32 - Broadband wireless and fixed-line access subscribers by major provider - 2006 - 2008
Table 33 - Total residential broadband subscribers by major provider - 2003 - 2008
Table 34 - Annual growth of residential broadband subscribers by major provider - 2004 - 2008
Table 35 - Broadband subscribers - wireless and fixed-line access - 2003 - 2010
Table 36 - Annual growth of broadband subscribers - wireless and fixed-line access - 2005 - 2010
Table 37 - Broadband penetration - wireless and fixed-line access - 2005 - 2010
Table 38 - Telecom retail and wholesale broadband subscribers - 1999 - 2008
Table 39 - Telecom broadband ADSL subscribers (residential, business) and (wholesale, retail) - 2005 - 20081
Table 40 - Internet subscriber revenue by market segment - 2003 - 2008
Table 41 - Woosh total customer base - 2005 - 2008
Table 42 - Woosh customer base by service - July 2008
Table 43 - Woosh revenue - 2004 - 2006, 2008
Table 44 - Woosh profit/(loss) - 2004 - 2006, 2008
Table 45 - Broadcasting statistics - FTA TV - 2008
Table 46 - Pay TV broadcasting statistics - June 2008
Table 47 - SKY total UHF, DBS & other subscribers by segment - 2005 - 2008
Table 48 - SKY total UHF, DBS & other subscribers and annual change - 1993 - 2009
Table 49 - SKY average monthly ARPU - 2005 - 2008
Table 50 - SKY revenue and percentage change - 1997 - 2009
Exhibit number:
Exhibit 8 - Comparison of New Zealand’s mobile networks
Exhibit 9 - Comparison of Vodafone’s 3G mobile networks
Exhibit 10 − Interesting spectrum developments

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