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New Zealand - Telecoms, Mobile, Broadband and Forecasts


Attention: There is an updated edition available for this report.

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.

Mobile Communications

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.

Broadband

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.

Broadcasting

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


  • EXECUTIVE SUMMARY
  • THE MARKET MOVING INTO 2014
    • COMPETITIVE LANDSCAPE
      • New Zealand's 2nd tier players squashed
      • Is consolidation needed for future survival
      • Fibre will provide more access to service
    • THE UFB AND RBI
      • UFB analysis
      • Overbuilding the networks overspends the investment dollar
        • Table Telecom services revenue and investment statistics - 2008 - 2013
        • Table Estimated cost of building the UFB
    • MOBILE MARKET
      • Will TelstraClear's new owner add value to the market
        • Table Mobile subscribers by network operator - 2007 - 2013
    • DEVELOPMENTS IN CLOUD SERVICES AND BIG DATA
      • Growth in crowdsourced data collection
      • Big data and the growth in M2M
    • CONSUMER PRICES
      • Higher price points leads to lower uptake
      • The hidden cost of increased UFB uptake
  • STATISTICAL OVERVIEW OF THE MARKET
    • KEY STATISTICS
      • Table Country statistics - 2013 (e)
      • Table Telecom services revenue and investment statistics - 2008 - 2013
      • Table Telephone network statistics - 2013 (e)
      • Table Internet statistics - 2013 (e)
      • Table Broadband statistics - 2013 (Jun)
      • Table Mobile statistics - 2013 (Jun)
      • Table Broadcasting statistics - Pay TV and FTA TV - 2013
      • Table Local access lines and local service and calling revenues - 2006 - 2013
    • LOCAL ACCESS AND FIXED VOICE OVERVIEW
      • Fixed-line voice market
        • Table Local access lines and local service and calling revenues - 2002 - 2013
      • Smaller players operate in niche markets
      • Payphones
    • VOIP MARKET
      • Market overview
      • Market size and estimates
      • Residential sector
        • Table VoIP plans and calling rates by major provider - 2013
      • Business sector
    • FIXED-MOBILE CONVERGENCE (FMC)
      • Introduction
      • Service bundling
      • Dual-mode services
      • Network convergence
      • International cable updates
    • SMART GRID DEVELOPMENTS
  • MARKET FORECASTS 2015, 2020
    • MARKET OVERVIEW
      • Media market
      • Total overhaul of the telecoms industry
      • Infrastructure market
      • The retail market
      • The trans-sector market
        • Table Size of fixed trans-sector market - 2020
        • Table Size of mobile trans-sector market - 2020
        • Table Telecommunications services revenue by market - 2010; 2015; 2020
        • Table Telecommunications services revenue share by market - 2010; 2015; 2020
    • THE FIXED BROADBAND MARKET
      • Setting the scene
      • Fixed broadband market forecasts
        • Table Forecast fixed-broadband subscribers - 2012 - 2013; 2015; 2020
    • THE MOBILE MARKET
      • Overview of changes
      • Mobile market scenarios
        • Table Forecast mobile voice subscribers - 2012 - 2013; 2015; 2020
  • REGULATORY OVERVIEW
    • HISTORY
    • UBA, UCLL, LLU AND UBS ACCESS MARKET DEVELOPMENTS
      • Determination on wholesale services - 2013
      • Minor changes post Telecom and Chorus demerger
    • MOBILE REGULATION DEVELOPMENTS
      • Mobile Termination Rates (MTRs)
        • Table Telecom and Vodafone network termination rates (Cents per minute) - 2011 - 2014
      • Micropayments using PayforitNZ approved
    • SPECTRUM MARKET
      • Background information
      • Spectrum and auctions
      • Analogue Switchover (ASO)
    • TELECOMMUNICATIONS SERVICE OBLIGATIONS (KIWI SHARE)
      • Background
      • Telecommunications Development Levy - 2010 - 2017
        • Table Annual cost of TDL - 2010 - 2017
      • TDL changes
    • TELECOMMUNICATIONS RELAY SERVICE (TRS)
      • Overview
      • Cost of the TSR
        • Table Sprint payments from TRS/TSO - 2004 - 2013
    • TELECOMMUNICATIONS DISPUTE RESOLUTION (TDR)
      • Scheme overview
    • NUMBER PORTABILITY (NP)
      • Overview
      • Statistics
        • Table Total ported numbers mobile versus fixed (by month) - 2008 - 2013
  • MOBILE COMMUNICATIONS
    • MOBILE MARKET OVERVIEW
    • MAJOR MOBILE OPERATORS
      • Telecom Mobile
        • Table Telecom mobile retail revenue - 2009 - 2013
        • Table Telecom mobile subscribers - 2001 - 2013
      • Vodafone New Zealand
        • Table Vodafone subscribers - 2007 - 2013
        • Table Vodafone mobile revenue - 2008 - 2012
      • 2degrees Mobile
        • Table Mobile subscribers per major operator - 2009 - 2013
        • Table 2degrees key financial performance figures - 2008 - 2012
        • Table 2degrees mobile market revenue - 2008 - 2012
    • MOBILE VIRTUAL NETWORK OPERATORS (MVNOS)
      • TelstraClear
      • Black+White
      • CallPlus/Slingshot
      • Compass
      • Orcon
    • MOBILE MARKET ANALYSIS
      • 700MHz Spectrum auction
    • STATISTICS
      • Operating statistics
        • Table Mobile data traffic - 2010 - 2014
        • Table Mobile voice traffic - 2006 - 2014
        • Table Mobile subscribers, annual change and penetration rate - 2001 - 2014
        • Table Annual change in mobile subscribers per major operator - 2002 - 2013
        • Table Historic - Market share of mobile subscribers per operator - 1995 - 2004
        • Table Market share of mobile subscribers per operator - 2005 - 2013
        • Table Telecom and Vodafone prepaid versus postpaid subscribers - 2005 - 2013
        • Table Market share of prepaid subscribers by MNO - 2009 - 2013
      • Historic statistics
        • Table Mobile subscribers per major operator (historic) - 2001 - 2007
        • Table Mobile subscribers, annual change and penetration rate (historic) - 1995 - 2000
        • Table Telecom Mobile and Vodafone annual call minutes (historic) - 2006 - 2009
      • Revenue analysis
        • Table Telecom and Vodafone network termination rates - 2009 - 2014
        • Table Overview of prepaid calling rates per major operator - 2013
      • Mobile revenue statistics
        • Table Mobile market revenue - 2008 - 2014
        • Table Annual change in mobile market revenue by MNO - 2008 - 2013
        • Table Mobile revenue market share by MNO - 2008 - 2013
        • Table Mobile market revenue by MNO (historic) - 1997 - 2007
        • Table Annual change in mobile market revenue by MNO (historic) - 1998 - 2007
        • Table Mobile revenue market share by MNO (historic) - 1997 - 2007
      • Number portability
      • Smart device market
    • MOBILE MESSAGING
      • Short Message Service (SMS)
        • Table SMS messages sent - 2009 - 2012
        • Table SMS revenue - 2009 - 2012
    • MOBILE CONTENT AND APPLICATIONS
      • International mobile roaming (IMR)
      • NFC payments trials
      • Joint venture for Trusted Service Manager (TSM)
  • THE BROADBAND MARKET
    • STATISTICS, OVERVIEW AND PROVIDERS
      • Overview of fixed broadband market in New Zealand
        • Table Fixed-broadband penetration by access method - 2007 - 2012
        • Table Fixed-broadband subscribers - 2006 - 2014
        • Table Dial-up internet subscribers - 2011 - 2014
        • Table Unbundled lines - 2007 - 2014
        • Table Wholesale broadband lines (excl. Telecom) - 2006 - 2013
      • The ISP market
        • Table Estimated number of ISPs and internet penetration rate - 2000 - 2013
        • Table Internet users and subscribers - 2000 - 2013
        • Table ISP share of broadband subscribers - June 2012
        • Table Internet subscribers by market segment - 2006 - 2013
        • Table Market share of ISPs by size - 2007 - 2013
        • Table Proportion of internet subscribers by download speed - 2011 - 2013
        • Table Internet subscribers by download speed - 2010 - 2012
        • Table Internet subscribers by upload speed - 2010 - 2012
        • Table Internet subscribers by download plan limits - 2009 - 2012
        • Table Proportion of internet subscribers by download plan limits - 2011 - 2013
        • Table Internet subscriber numbers by download speed (historic) - 2007 - 2009
      • Broadband statistics and forecasts
        • Table Estimates of residential broadband subscribers by major provider - 2010 - 2013
        • Table Annual change of residential broadband subscribers by major provider - 2009 - 2013
        • Table Fixed-broadband subscribers by platform - 2005 - 2013
        • Table Telecom total broadband subscribers - 2011 - 2013
        • Table Telecom broadband retail and wholesale subscribers - 2009 - 2013
      • Major broadband service providers
      • Fibre developments
      • WiFi developments
    • ULTRA-FAST BROADBAND NETWORK
      • Background information
      • Deployment developments
      • Will the deployment strategy last
      • The backbone network
      • New networks adding financial value to the economy
      • VDSL developments
      • Proposed new UFB services for 2014
      • Rural Broadband Initiative (RBI)
      • BuddeComm analyses
      • Overview of involved parties
        • Table Overview of UFB rollout by premise type and users available - 2013 - 2019
    • WIRELESS BROADBAND
      • Overview
        • Table Broadband penetration - wireless versus fixed-line access - 2005 - 2013
        • Table Mobile handset internet connections - 2011 - 2013
      • WiFi
      • WiMAX
      • Satellite
      • Major wireless broadband providers
        • Table Woosh Wireless subscribers - 2005 - 2013
        • Table Woosh Wireless key financial results overview - 2004 - 2012
        • Table Woosh Wireless capex versus opex - 2009 - 2011
        • Table Zenbu subscribers, WiFi zones and data throughput - 2007 - 2012
  • DIGITAL ECONOMY AND DIGITAL MEDIA
    • THE DIGITAL ECONOMY - A KEY MARKET DRIVER
    • POLICIES AND INFRASTRUCTURE
      • E-government
      • The Ultra-Fast Broadband network - getting connected
        • Table Budget allocation for UFB investment - 2009 - 2013
      • New Zealand's current broadband network
    • DIGITAL ECONOMY IN NEW ZEALAND
      • Overview of the indicators
    • E-COMMERCE
      • Overview and statistics
        • Table Estimated New Zealand population shopping online - 2008 - 2014
      • Daily-deal coupon sites still growing in popularity
        • Table Top 5 e-commerce sites in New Zealand by popularity - 2011 - 2013
      • Trade Me
      • Global newcomers to e-commerce in New Zealand
      • Online music
    • E-HEALTH
      • Overview
      • Personal health care records
      • E-learning
    • SMART METERS/SMART GRIDS
      • Overview
      • Renewable energy use target set for 2025
      • Electric vehicles trials and wireless chargers
      • Pilots and trials
      • Smart meters finally getting smart
      • Smart grids starting to roll out
      • Auckland network smart meters
      • Google PowerMeter installed in New Zealand
      • Smart networks
      • Smart homes
      • Time shifting of power usage
    • DIGITAL MEDIA
      • IPTV (DSL TV)
      • Mobile TV
      • Social networking
        • Table Information, e-commerce or social media websites in New Zealand in top 20 - 2011 - 2012
        • Table Overview of Facebook users in New Zealand - 2009 - 2013
  • MAJOR OPERATORS
    • TELECOM CORPORATION NEW ZEALAND
      • Company overview
      • Background information on the demerger of Chorus and assets
      • Recent developments - free WiFi, 4G trials, data roaming reduced
      • Operations statistical information
        • Table Fixed lines in operation by division - 2008 - 2013
        • Table Annual change in fixed lines by division - 2009 - 2013
      • Company divisions
        • Table Gen-i revenue by type -line subscribers by type - 2010 - 2013
        • Table Gen-i fixed-line subscribers by type - 2010 - 2013
        • Table Telecom mobile monthly ARPU - pre/postpaid voice and data - 2009 - 2013
        • Table Annual change in monthly ARPU by market sector - 2010 - 2013
      • Products and services
        • Table Telecom fixed lines and market share - 2010 - 2013
      • Subsidiary and associate companies
      • Environmental developments
        • Table Environmental KPIs - 2009 - 2013
      • Company history
    • CHORUS LIMITED
      • Overview
      • Financial results
        • Table Chorus key financial operating results - 2009 - 2013
        • Table Chorus operating revenue by segment - 2012 - 2013
        • Table Chorus capital expenditure by market segment and market spend mix - 2012 - 2013
      • Operational results
        • Table Chorus fixed-line connections - 2012 - 2013
        • Table Chorus broadband connections - 2012 - 2013
        • Table Chorus operational inputs - wholesale prices by line segment - 2012; 2014
        • Table Chorus fibre wholesale prices by segment - 2012
      • Company services
      • Background information on Chorus and the UFB rollout
      • Company history
    • VODAFONE NEW ZEALAND
      • Global and Oceania operations
      • TelstraClear purchased by Vodafone
      • Company analysis
      • The networks
      • Products and services
      • Wholesale, roaming and partnerships
      • Financial results
        • Table Historic - Vodafone NZ revenue and annual change - 1996 - 2004
        • Table Vodafone NZ revenue and annual change - 2005 - 2013
        • Table Vodafone NZ annual profit and annual change - 2003 - 2013
        • Table Vodafone NZ average monthly ARPU - pre/postpaid and total - 2003 - 2013
      • Operating results
        • Table Historic - Vodafone subscriber statistics - 1998 - 2004
        • Table Vodafone subscriber statistics - 1998 - 2013
        • Table Vodafone prepaid versus postpaid subscribers - 2006 - 2013
        • Table Vodafone fixed-line subscribers - 2011 - 2013
      • Company history
    • OVERVIEW OF THE 2ND TIER TELECOMS PLAYERS
      • CallPlus
      • M2 NZ Limited
        • Table M2 NZ Limited key financial statistics overview - 2009 - 2011
      • Southern Cross Cable Network
        • Table Cost of accessing the protected circuits of the SX cable - 2000 - 2013
      • WxC (Worldxchange Communications)
      • Kordia - Orcon
  • BROADCASTING - FTA, PAY TV, DIGITAL TV AND RADIO
    • OVERVIEW
      • Table Broadcasting statistics overview - FTA TV - 2013
    • FREE-TO-AIR TV
      • Television New Zealand (TVNZ)
        • Table Overview of TVNZ key financial parameters ($ million) - 2011 - 2013
      • Māori TV
      • MediaWorks NZ
      • Prime Television New Zealand
      • New Zealand Racing Board
    • DIGITAL FTA TV
      • Freeview
        • Table Freeview household viewers and penetration rate - 2009 - 2013
      • Digital TV changeover
        • Table Percentage of digital TV households by region - 2011 - 2013
        • Table Digital TV breakup by service provider/technology -- 2010 - 2013
    • PAY AND CABLE TV (DIGITAL)
      • Market overview
        • Table Pay TV broadcasting statistics - 2008 - 2013
      • Igloo
      • SKY Network Television
        • Table SKY Network Television financial overview - 2010 - 2013
        • Table SKY Network Television operational overview - 2010 - 2013
        • Table Historic - SKY Network Television total UHF, DBS & other subscribers - 1993 - 2004
        • Table SKY Network Television total UHF, DBS & other subscribers - 2005 - 2013
        • Table SKY Network Television average monthly ARPU (historic) - 2005 - 2008
        • Table Historic - SKY Network Television revenue & annual change - 1997 - 2004
        • Table SKY Network Television revenue & annual change - 2005 - 2013
      • TelstraClear
    • IPTV
      • Overview
      • Quickflix
      • TiVo
    • DIGITAL RADIO
      • Digital Audio Broadcasting (DAB)
      • Digital radio trials

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