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Competition in telecommunications continues to improve

Competition in telecommunications continues to improve but challenges remain says Commerce Commission

The Commerce Commission has today released its 2009/10 telecommunications monitoring report analysing the state of New Zealand telecommunications markets.

“The report shows investment in the telecommunications industry reduced slightly compared to 2008/09, largely due to the completion of Telecom’s XT network and the first stage of 2degrees’mobile network during the previous financial year, but fixed line investment increased slightly,” said Dr Ross Patterson, Telecommunications Commissioner.

“The report also shows that competition in all telecommunications markets has continued to increase. Consumer choice and quality of service continues to improve, while prices have fallen,” said Dr Patterson.

The total number of fixed broadband connections has more than doubled in nearly five years with fixed line broadband penetration increasing to 25 percent of the population. An estimated 61 percent of households now have fixed line broadband. Wholesale broadband connections (excluding unbundled copper local loop or UCLL) have more than tripled over the same time from 100,000 to 342,000 connections.

“Despite this progress, challenges remain. In the fixed line market, while more than 100 exchanges serving more than 60 percent of subscribers have been unbundled, the impact of cabinetisation will reduce the number of lines which can be unbundled by more than 50 percent by December 2011,” said Dr Patterson.

“In the mobile market, while call minutes have increased by 5 percent, usage remains low by international standards. New Zealanders make an average of 79 minutes of calls per month compared with 120 minutes per month in Australia and 198 minutes per month in the UK. In addition, off-net prices are significantly higher than on-net prices, discouraging calls between customers of competing networks”.

You can download the 2009/10 report from the Commission's website: www.comcom.govt.nz/telecommunications-market-reports

Background
The sector monitoring provision of the Telecommunications Act 2001 came into force in 2006.

9A functions of Commission in relation to sector monitoring and information dissemination
(1) In addition to the other functions conferred on the Commission by this Act, the Commission-
(a) must monitor competition in telecommunications markets and the performance and development of telecommunications markets; and
(b) may conduct inquiries, reviews, and studies (including international benchmarking) into any matter relating to the telecommunications industry or the long-term benefit of end-users of telecommunications services within New Zealand; and
(c) must make available reports, summaries, and information about the things referred to in paragraphs (a) and (b).
(2) The function in subsection (1)(c) does not require the Commission to release all documents that the Commission produces or acquires under this section.

On-net are calls and texts (SMS) sent to people who are subscribed to the same mobile network.

Off-net are calls and texts (SMS) sent to people who are subscribed to a different mobile network.

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