The Commerce Commission has released its report on telecommunications markets in New Zealand covering the first six months of 2009. The report also provides some more recent information about mobile prices in New Zealand following the launch of the 2degrees network in August.

Telecommunications Commissioner Dr Ross Patterson said the report shows there has been continued investment in telecommunications infrastructure in the first half of 2009 with the construction of new or extended mobile networks by Telecom, Vodafone and 2degrees.

The entry of 2degrees into the mobile market in August means, for the first time in the Commission's analysis, New Zealand consumers are able to access a prepaid plan at prices lower than the OECD average. In previous analyses the best ranking for a New Zealand prepaid plan was 26 out of 30, with pricing at more than one and a half times the OECD average.

"Prepaid plans are important to New Zealand consumers as approximately two thirds of mobile subscribers in New Zealand use prepaid plans. Consumers now have more choice and better pricing in the prepaid mobile market," said Dr Patterson.

Building of technologically compatible mobile networks has made it easier to switch between networks without changing phones. In August and September there was more than triple the usual number of mobile subscribers switching to another network and taking their number with them.

In the fixed line market, Chorus has continued with the large scale cabinetisation of the Telecom fixed line access network. Growth in the number of unbundled copper local loop lines was, however, subdued in the first half of 2009 after growing strongly in late 2008. One reason for this was the loyalty offers encouraging retailers to purchase broadband plans from Telecom Wholesale rather than unbundled lines from Chorus. The Commission expects that stronger growth will resume, as the loyalty offers have been withdrawn and TelstraClear launched its new retail broadband services using unbundled lines in October 2009.

Other findings include:

  • take up of broadband services has continued to grow at an annual rate of around 14 per cent, which is above the OECD average;
  • the pricing of broadband services in New Zealand is broadly in line with that of similarly developed countries; and

 § there continues to be strong growth in the number of wholesale services sold that allow other providers to compete against Telecom in the retail market. The number of Telecom's residential lines sold by a competing retailer has doubled in the last two years to reach nearly 250,000 as at 30 June 2009.

The monitoring report for the first six months of 2009 is available on the Commission's website www.comcom.govt.nz under Telecommunications Market Reports.

Background

The Commission is responsible for monitoring and reporting on competition in telecommunications markets and on the performance and development of those markets.

Since 2007, the Commission has been releasing quarterly reports on key developments in the telecommunications industry. The statistics from the former Telecommunications Key Statistics report will now be released in a bi-annual report. This revised report is being expanded based on feedback from interested parties to include a more thorough overview of recent developments and trends in the New Zealand telecommunications industry, including the fixed, mobile, broadband, and backhaul markets and investment in those markets.

This report is one of a series of reports prepared and published by the Commission under the Telecommunications Act 2001.