2008 New Zealand - Mobile and Broadband Overview & Analysis

Publication Date	December 2007
Publisher	BuddeComm
Product Type	Report
Pages	146
ISBN Number	not applicable
Product Code	BUD00213

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Summary

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:

Key issues covered include:

Mobile industry;
Fixed and wireless broadband;
Internet and ISP markets;
Broadcasting market;
Digital Media and Convergence.
(Approx. number of pages: 146)
Researchers:- Phil Harpur and Paul Budde
Current publication date: December 2007 (11th Edition)
Next publication date: December 2008

BuddeComm's 2008 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 market.

The current mobile market is a duopoly of Vodafone New Zealand and Telecom Mobile. In the long term BuddeComm does not think it will be viable for more than two mobile network operators to survive in a nation as small as New Zealand, based on traditional voice and texting services. Competition can only be developed on top of these networks (MVNOs). The local mobile market is now approaching saturation and we expect overall market subscriber growth to drop to just 2.9% in 2007/08. New Zealand is finally catching up with the rest of the world in terms of broadband penetration, with overall subscriber growth in excess of 30% in 2006/07.

Only a year only ago, we would have put New Zealand two to three years behind Australia in terms of some of its broadband developments.

The bundling of voice, data and video services (triple play) and mobile services (quadruple play) are likely to develop on a more large-scale fashion in New Zealand in 2008 and 2009. Voice and data bundling has already been introduced by a number of players, including Telecom, Orcon (now part of Kordia) and ihug. These developments will be assisted by the government's decision to proceed with the operational separation of Telecom and to introduce new services such as LLU, naked DSL, and a wider range of regulated wholesale services which should begin to be introduced into the New Zealand market by the beginning of 2008.

The FTA broadcasting networks are expected to see intense competition for viewers and advertising in 2008 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing.

The new environment is going to open up lots of new opportunities for everybody involved. However, it could take time before that actually starts to happen. Opportunities include the value-added infrastructure services such as data centres, content hosting, network management, etc. But equally a range of innovative customer services can be built on the new wholesale products and perhaps more importantly open networks will create a great new environment for digital media, e-health, tele-education and smart grid applications in which there will now be much wider scope for a variety of organisations to participate.

Key Highlights

Vodafone took the number one spot in mobile subscribers in New Zealand back in 2003 and now holds 53% of the subscriber market, despite a 2% overall market share loss in 2006/07.
With a reluctant Vodafone, MVNO networks are very slow to get of the ground.
Overall subscriber growth was unusually high at 11.6% in 2006/07, bringing the market to a total of 4.25 million subscribers. However, we expect overall market subscriber growth to drop to just 2.9% in 2007/08 and 2.3% in 2008/09 as the market approaches saturation.
In the long term BuddeComm does not think it will be viable for more than two mobile network operators to survive in a nation as small as New Zealand, based on traditional voice and texting services. This will require ongoing regulations.
Mobile voice is becoming another commodity service, and there will be increasing pressure on Vodafone and Telecom to lower mobile call prices, which remain very high by international standards.
However, there could be potential opportunity for a third operator to enter the market offering niche data services.
Mobile subscribers and annual change - 2003 - 2009

Year end June Subscribers Annual change

2003 2,619,000 10.6%
2004 3,027,000 15.6%
2005 3,530,000 16.6%
2006 3,803,000 7.7%
2007 (e) 4,245,000 11.6%
2008 (e) 4,369,000 2.9%
2009 (e) 4,468,000 2.3%

(Source: BuddeComm based on industry data)

Note: Double counting, due to subscribers having more than one mobile subscription, can raise the true penetration levels by around 10% to 15% above the estimates we have quoted.

Broadband, Internet and data

New Zealand is finally catching up with the rest of the world in terms of broadband penetration, with overall subscriber growth in excess of 30% in 2006/07. However, low broadband access speeds and high costs relative to other OECD nations, is proving to be a major stumbling block for the development of local digital media activities.

An increase in wholesale prices will result in an increase in retail prices, which once again could set New Zealand back several years on the international broadband ladder.

BuddeComm predicts that the data market will see lower overall revenue growth in 2007-08 of only 2.5%, but data revenue growth expected to pick up strongly in 2008-09. The data market is being strongly driven by the broadband market.
The bundling of voice, data and video services (triple play) and mobile services (quadruple play) are likely to develop on a more large scale fashion in New Zealand in 2008 and 2009.

A number of interesting WiMAX trials and developments have been underway in New Zealand; however, there have been ongoing delays in the finalisation of the WiMAX technology which has held back the full scale rollout of WiMAX systems both in New Zealand and overseas.

It looks as though it wouldn't be until early 2009 before laptops with WiMAX embedded chips would be widely available. By that time wireless broadband competition from Vodafone is set to kick-in.

Convergence, digital media and Broadcasting

Four operators had indicated plans or intentions to undertake local loop unbundling in the New Zealand market: these include ihug, Orcon, Callplus and TelstraClear.
However, with the announcement of the Telecom cabinetisation plan, these developments are now under very dark clouds indeed.
The introduction of ADSL2+ services, facilitated by LLU will allow for faster access of bundled services including VoIP and IPTV, this faster access will also be critical for the growth of digital media services.
Even with full LLU, operating margins are likely to be tight, requiring diversity of services to be profitable.
Local IPTV activity is gradually developing under the radar screen; however, a current stumbling block however is the quality of Telecom's infrastructure.
The FTA broadcasting networks are expected to see intense competition for viewers and advertising in 2008 and beyond, which will impact on their cost margins as they will be forced to put more money into programming and marketing.
New Zealand audiences have increasing choice and control over when, where and how they consume media. These choices have been facilitated by the rise of technologies such as digital media players (iPods and MP3 players), digital personal video recorders, and video and audio downloads using computers connected to the Internet via broadband.

Content

1. Market Overview
- 1.1 Mobile Market
  - 1.1.1 Market Overview, Statistics And Analysis
  - 1.1.2 Major Players
- 1.2 Broadband, Internet And Data Market
  - 1.2.1 Fixed Broadband Market
  - 1.2.2 Broadband And Dial-Up Forecasts To 2012
  - 1.2.3 Wireless Broadband
  - 1.2.4 Internet And Isp Market
  - 1.2.5 Data Market
- 1.3 Digital Media And Convergence
- 1.4 Broadcasting
2. Market And Industry Analysis
- 2.1 The Dawn Of A New Era
- 2.2 Progress At The Expense Of Competition - November 2007
  - 2.2.1 Shortsighted Industry
  - 2.2.2 Telecom Fibre Plans Are No Surprise
  - 2.2.3 No Progress In Wholesale
  - 2.2.4 Broadband Prices Double That Of Other Countries
  - 2.2.5 New Endless Regulatory Debates?
- 2.3 Will The Country Catch Up In Broadband?
- 2.4 The Industry Will Have To Wait A Bit Longer
- 2.5 Infrastructure Analysis
  - 2.5.1 The Future Of Wimax In New Zealand
  - 2.5.2 Hspa And Other Mobile Data Developments
  - 2.5.3 Web 2.0
- 2.6 Mobile Market Analysis
  - 2.6.1 Vodafone Unchallenged Market Leader In Mobile
  - 2.6.2 Econet Re-Emerged As Nz Telecommunications
  - 2.6.3 Telstraclear Niche Market Player
  - 2.6.4 Data Opportunities
  - 2.6.5 Not Much Action Until 2010-2012
  - 2.6.6 Regulator Needs To Keep The Duopoly Honest
3. Key Statistics
4. Mobile Communications
- 4.1 Local Market Overview And Analysis
- 4.2 Statistical Overview
  - 4.2.1 Subscriber And Operating Statistics
  - 4.2.2 Revenue Statistics
  - 4.2.3 Telecom And Vodafone - Comparison Of 3g Offerings And Retail Outlets
- 4.3 Market Surveys
  - 4.3.1 Commerce Commission Study Ranks New Zealand Poorly In Mobile Pricing
- 4.4 Major Mobile Operators
  - 4.4.1 Telecom Mobile
  - 4.4.2 Vodafone New Zealand
  - 4.4.3 Telstraclear
  - 4.4.4 New Zealand Communications Ltd (Formerly Econet)
- 4.5 Mobile Market Analysis - Late 2007
  - 4.5.1 Vodafone Unchallenged Market Leader In Mobile
  - 4.5.2 Econet Re-Emerged As Nz Telecommunications
  - 4.5.3 Telstraclear Niche Market Player
  - 4.5.4 Data Opportunities
  - 4.5.5 Not Much Action Until 2010-2012
  - 4.5.6 Regulator Needs To Keep The Duopoly Honest
  - 4.5.7 Hspa And Other Mobile Data Developments
- 4.6 Can We Sort Out The Mobile Mess In New Zealand?
- 4.7 Mobile Operators Continue To Hold Onto Lucrative Empires
- 4.8 Hspa Threat To Sms
- 4.9 Slow Progress In Fixed-Mobile Convergence
- 4.10 Mobile Merging With Wireless
- 4.11 Hspa A Reality Now, Wimax Still A Few Years Away
- 4.12 Vodafone Predicts A Wimax Revolution - Global Analysis
- 4.13 Spectrum Market And Regulatory Overview
  - 4.13.1 Management Rights Regime (Mrr)
  - 4.13.2 Impact Of New Technologies On Spectrum Usage
  - 4.13.3 Licensed Versus Unlicensed Spectrum
- 4.14 The Radiocommunications Act 1989
- 4.15 Market Developments In 2007
  - 4.15.1 Cellular Spectrum Auctions - April 2007
- 4.16 Market Developments In 2006
  - 4.16.1 New Zealand Cellular Spectrum Review - July 2006
- 4.17 Expansion Of Spectrum Allocation For Wireless Broadband
  - 4.17.1 Update - July 2006
  - 4.17.2 Update - November 2006
  - 4.17.3 Update - April 2007
  - 4.17.4 2.3ghz And 2.5ghz Spectrum Auction For December 2007
  - 4.17.5 Applications Open For Nz 3.5ghz Spectrum - November 2007
- 4.18 Unlicensed Spectrum
- 4.19 Spectrum Trading
- 4.20 Radio Frequency Identification (Rfid)
  - 4.20.1 Overview
  - 4.20.2 New Zealand Retailer Explores Implementation Of Rfid
5. Broadband, Internet And Isp Market
- 5.1 Market Overview
  - 5.1.1 Regulatory Developments And Telecom's Cabinetisation Plan
- 5.2 Market Analysis
- 5.3 Broadband Statistics
  - 5.3.1 Local Statistics
  - 5.3.2 Broadband And Dial-Up Forecasts To 2012
- 5.4 Market Surveys
  - 5.4.1 Oecd Broadband Survey
- 5.5 Broadband Service Providers
  - 5.5.1 Callplus
  - 5.5.2 Citylink
  - 5.5.3 Iconz
  - 5.5.4 Ihug
  - 5.5.5 Maxnet
  - 5.5.6 Telecom
  - 5.5.7 Telstraclear
  - 5.5.8 Wired Country
  - 5.5.9 Woosh Wireless
  - 5.5.10 Orcon Internet
- 5.6 Technologies And Solutions
- 5.7 Regional Broadband Initiatives
  - 5.7.1 Introduction
  - 5.7.2 Government's Digital Strategy And Broadband Challenge Initiative
  - 5.7.3 West Coast Developments
  - 5.7.4 Project Probe
  - 5.7.5 E-Regions
- 5.8 Wireless Broadband
  - 5.8.1 Market Overview
  - 5.8.2 Wifi
  - 5.8.3 Wimax
  - 5.8.4 Satellite
  - 5.8.5 Major Players
- 5.9 Internet And Isp Market
  - 5.9.1 Market Overview And Statistics
  - 5.9.2 Market Trends And Analysis
  - 5.9.3 Market Surveys
  - 5.9.4 Internet Auctioning
  - 5.9.5 Internet Mobile Banking
  - 5.9.6 E-Business
6. Convergence - Triple Play Models
- 6.1 Trends In Convergence And Digital Media
  - 6.1.1 Telecoms Access Models Undergo Fundamental Changes
  - 6.1.2 Digital Media Will Be The Key Market Driver In The Telco Market
  - 6.1.3 The Rise Of Content Based Services
  - 6.1.4 E-Health
- 6.2 Analysis - New Zealand Must Capitalise On Digital Media Opportunities
  - 6.2.1 Where Are The Leaders?
  - 6.2.2 Digital Media Event
  - 6.2.3 Savings Worth $10 Billion
- 6.3 Triple Play And Quadruple Play Services In New Zealand
  - 6.3.1 Market Overview
  - 6.3.2 Telecom's Next Generation Network (Ngn)
  - 6.3.3 Telstraclear
  - 6.3.4 Vodafone /Ihug
- 6.4 Analysis - What Went Wrong With Triple Play?
  - 6.4.1 Voip And Video - Hard Nuts To Crack
  - 6.4.2 Tv Camera In Front Of Radio Programs
  - 6.4.3 Fastweb Is Leading The Charge, For Change
  - 6.4.4 Triple Play Soon To Be Forgotten
- 6.5 Converging Digital Media Services By Application
  - 6.5.1 Home Media Centres
  - 6.5.2 Broadband - Home Networks
  - 6.5.3 Video-On-Demand (Vod)
  - 6.5.4 Dvrs
  - 6.5.5 Flat Screen Tvs
  - 6.5.6 Iptv (Dsl Tv)
  - 6.5.7 Mobile Tv
  - 6.5.8 Internet Portals And Applications
- 6.6 Analysis - Home Media Centres
  - 6.6.1 Catalyst For New Business Opportunities
  - 6.6.2 Stragglers Will Be Left Behind
  - 6.6.3 Overhaul Of The Lounge Room
  - 6.6.4 Content Providers Are Coming To The Party
  - 6.6.5 Television Advertising
- 6.7 Analysis - E-Health - Killer App On True Broadband
  - 6.7.1 Broadband Essential To Maintain Public Health System
  - 6.7.2 Aged Care Services At Home
  - 6.7.3 Social Networking Through Video Cams
  - 6.7.4 Public Education And Public Debate Needs To Start Now
  - 6.7.5 Online Patient Record Systems
  - 6.7.6 Digital Healthcare Appointment System
  - 6.7.7 Video Consultation And Monitoring
  - 6.7.8 There Simply Is No Alternative To E-Health
7. Broadcasting
- 7.1 Market Overview
- 7.2 Free-To-Air Tv
  - 7.2.1 Television New Zealand (Tvnz)
  - 7.2.2 Mediaworks Nz
  - 7.2.3 Prime Television New Zealand
  - 7.2.4 Totaliser Agency Board (Tab)
- 7.3 Digital Fta Tv
  - 7.3.1 State Of Play
  - 7.3.2 Freeview (Fta Digital Tv Service)
  - 7.3.3 Kordia's Digital Tv Rollout
- 7.4 Pay And Cable Tv (Digital)
  - 7.4.1 Market Overview
  - 7.4.2 Sky Network Television
  - 7.4.3 Telstraclear Saturn
  - 7.4.4 Ethnic Tv Company To Launch Digital Subscriber Tv
  - 7.4.5 Analysis Of The Pay Tv Market
- 7.5 Iptv
- 7.6 Video-Over-Ip Broadcasting
- 7.7 Digital Radio
  - 7.7.1 Digital Audio Broadcasting (Dab)
- 7.8 Dvb-T Trials
8. Glossary Of Abbreviations
- Exhibit 1 - Comparison Of New Zealand's Mobile Networks
- Exhibit 2 - Examples Of Web 2.0 Developments
- Exhibit 3 - Comparison Of New Zealand's Mobile Networks
- Exhibit 4 - Telecom And Vodafone - Number Of Retail Outlets By Distributor - 2006
- Exhibit 5 - Vodafone Hsdpa Rollout Timeframe & Corresponding Download Speeds - 2006 - 2007
- Exhibit 6 - Interesting Spectrum Developments
- Exhibit 7 - New Zealand Rankings In Global Oecd Broadband Survey - June 2007
- Exhibit 8 - Telecom New Zealand's Plan For Convergence
- Exhibit 9 - Advantages Of E-Health
- Exhibit 10 - Sky Network Television At A Glance
- Table 1 - Mobile Subscribers, Annual Change And Penetration - 1995 - 2009
- Table 2 - Mobile Subscribers Per Operator- 2001 - 2009
- Table 3 - Annual Change In Mobile Subscribers Per Operator - 2002 - 2009
- Table 4 - Broadband & Dial-Up Residential Subscribers And Penetration - 2003 - 2007
- Table 5 - Broadband Subscribers By Major Provider - Wireless And Fixed-Line Access - 2005 - 2007
- Table 6 - Estimated Number Of Isps - 1995 - 2008
- Table 7 - Data Market Revenue - Broadband, Dial-Up And Other Data - 2004 - 2009
- Table 8 - Data Market Revenue Growth - Broadband, Dial-Up And Other Data - 2005 - 2009
- Table 9 - Broadcasting Statistics - Pay Tv And Fta Tv - 2007
- Table 10 - Country Statistics - 2007
- Table 11 - Telecom Revenue Statistics - 2007 - 2009
- Table 12 - Telephone Network Statistics - 2007
- Table 13 - Internet Provider Statistics - 2007
- Table 14 - Internet User Statistics - June 2007
- Table 15 - Broadband Statistics - June 2007
- Table 16 - Mobile Statistics - June 2007
- Table 17 - Broadcasting Statistics - 2007
- Table 18 - Mobile Subscribers, Annual Change And Penetration - 1995 - 2009
- Table 19 - Mobile Subscribers Per Operator- 2001 - 2009
- Table 20 - Mobile Subscribers Per Operator And Network - 2001 - 2006
- Table 21 - Annual Change In Mobile Subscribers Per Operator - 2002 - 2009
- Table 22 - Market Share Of Mobile Subscribers Per Operator - 1995 - 2009
- Table 23 - Percentage Of Prepaid Customers Per Operator - 2005 - 2007
- Table 24 - 3g Subscribers By Operator- 2006
- Table 25 - Telecom Mobile Total Annual Call Minutes And Annual Change - 2005 - 2007
- Table 26 - Mobile Market Revenues By Operator - 1997 - 2009
- Table 27 - Mobile Market Revenue Growth By Operator - 1998 - 2009
- Table 28 - Mobile Market Revenue Market Share By Operator - 1997 - 2009
- Table 29 - Monthly Arpu ($) Per Operator* - 2004 - 2007
- Table 30 - Annual Change In Monthly Total Arpu ($) Per Operator - 2005 - 2007
- Table 31 - Mobile Low User Basket - November 2006
- Table 32 - Mobile Medium User Basket - November 2006
- Table 33 - Mobile High User Basket - November 2006
- Table 34 - Vodafone 2g And 3g Network Cell Sites - October 2006
- Table 35 - Broadband Subscribers By Major Provider- Wireless And Fixed-Line Access - 2005 - 2007
- Table 36 - Total Residential Broadband Subscribers By Major Provider - 2003 - 2007
- Table 37 - Annual Growth Of Residential Broadband Subscribers By Major Provider - 2004 - 2007
- Table 38 - Percentage Breakdown Of Residential Subscribers Per Provider - 2004 - 2007
- Table 39 - Telecom Nz Retail And Wholesale Broadband Subscribers - 1999 - 2007
- Table 40 - Telecom Nz Broadband Adsl Subscribers (Residential, Business) And (Wholesale, Retail) And Annual Change - 2005 - 2007
- Table 41 - Broadband Subscribers By Major Provider- Wireless And Fixed-Line Access - 2003 - 2005
- Table 42 - Broadband Penetration In New Zealand By Access Technology - 2005 - 2006
- Table 43 - Broadband Subscribers - Wireless And Fixed-Line Access - 2003 - 2005
- Table 44 - Forecast Broadband & Dial-Up Residential Subscriber Forecasts - Weaker Market Growth Scenario - 2003 - 2012
- Table 45 - Forecast Broadband & Dial-Up Residential Subscriber Forecasts - Stronger Market Growth Scenario - 2003 - 2012
- Table 46 - Woosh Customer Base - 2005 - 2007
- Table 47 - Woosh Revenue And Annual Change - 2004 - 2006
- Table 48 - Woosh Profit/(Loss) - 2004 - 2006
- Table 49 - Estimated Number Of Isps - 1995 - 2008
- Table 50 - Isp Revenue Estimates And Annual Change - 2002 - 2009
- Table 51 - Broadband Subscribers By Major Provider - Wireless And Fixed-Line Access - 2005 - 2007
- Table 52 - Broadband & Dial-Up Residential Subscribers And Penetration - 2003 - 2007
- Table 53 - Dial-Up Subscribers Per Major Isp (Historical) - 2002 - 2006
- Table 54 - Telecom Nz Internet Dial-Up Subscribers, Hours And Annual Change - 2006 - 2007
- Table 55 - Number Of Subscribers By Type Of Subscriber And Annual Change - Sept 2006 - March 2007
- Table 56 - Broadband Subscribers - Cable And Dsl - March 2007
- Table 57 - Size Of Isps By Percentile Range - 2005 - 2007
- Table 58 - Eiu E-Readiness Rankings - 2006 - 2007
- Table 59 - Broadcasting Statistics - Pay Tv And Fta Tv - 2007
- Table 60 - Pay Tv Broadcasting Statistics - June 2007
- Table 61 - Total Uhf, Dbs & Other Subscribers - 2004 - 2007
- Table 62 - Subscriber Growth & Annual Change - 1993 - 2008
- Table 63 - Average Monthly Revenue Per Residential Subscriber And Annual Change - 2005 - 2007
- Table 64 - Revenue Overview And Percentage Change - 1997 - 2008
- Table 65 - Group Revenue Overview And Annual Change - 2005 - 2006