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Demand for mobile data doubles for second year in a row

29 April 2013

Demand for mobile data doubles for second year in a row says telco report

The Commerce Commission today released its 2012 telecommunications annual monitoring report analysing the state of New Zealand’s telecommunications markets.

The 2011/12 year was marked by increased activity on mobile devices including smartphones, a mild rebound of investment in the sector, flat company revenues, and a continued fall in market concentration compared to the previous year.

“Fuelled by our ever-increasing use of smartphones and other mobile devices, New Zealanders almost doubled the amount of mobile data they used for the second year in a row. Fixed broadband data use also doubled in the last year with the average amount of data traffic per user now at 19GB per annum,” said Telecommunications Commissioner Dr Stephen Gale.

Dr Gale said mobile retail revenues also grew more strongly in 2011/12 than in any recent years, hitting $2.38 billion, up from $2.14 billion in 2010/11.

The report also tracks developments in the market since 2006.

“Total retail telecommunications revenues rose slightly in the last two years to reach $5.22 billion in 2011/12 after several years of minimal growth. Revenue growth has tended to be well behind inflation, so, with increasing data use, consumers are getting more for their money,” said Dr Gale.

Market concentration continued to fall in the fixed line voice, fixed line broadband and mobile markets in 2011/2012 as the largest players lost market share.

Other key findings of the report include:

• Fixed broadband connections continued to grow, reaching 1.24 million in 2011/12. This pushes broadband penetration to around 78% of New Zealand households that have a fixed line connection.
• Landline and mobile calling minutes and calling revenue figures showed a modest decline as people continue to use alternatives like texting and social media networks in favour of making a call.
• Telecommunications investment picked up a little to $1.26 billion after peaking at $1.69 billion in 2008/09.
• Naked broadband services (where fixed line broadband is provided without a conventional voice service) have continued to grow in popularity driven by availability of competitively priced fixed line broadband and VoIP services, and the falling price of mobile voice services.
• Investment by Chorus and other local fibre companies is increasing as they work to meet ultra-fast broadband commitments to provide fibre-to-the-home networks in much of the country, however the full financial impact of their investment in the project is yet to be seen.
• The three biggest players in the mobile market moved closer in terms of market share this year. On a connections basis Vodafone had 42% of the market, Telecom 37% and 2degrees 20% as at 30 June 2012, with smaller mobile resellers making up the remaining 1%.

This year’s report covers a transitional period before and after Telecom’s 1 December 2011 split into Telecom and Chorus.

Background

Today's report is the sixth annual telecommunications market monitoring report produced by the Commission. It is part of the Commission's on-going monitoring of the evolution of competition in the telecommunications sector in New Zealand.

The Commission monitors the state of competition because of its function of promoting competition in telecommunications markets by regulating some wholesale prices and conditions.

Telecommunications markets are complex and a range of indicators have to be analysed to provide an indication of the overall state of competition.

This report is released under section 9A of the Telecommunications Act 2001, which requires the Commission to monitor telecommunications markets and make available reports, summaries, and information resulting from carrying out these functions.

Much of the data for the annual monitoring report is collected from an annual telecommunications industry questionnaire administered by the Commission. The aggregated results from this questionnaire are also published, although some data is withheld on commercial sensitivity grounds.

ENDS

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