ComCom: No regulation for NZ mobile – but 5G spectrum auctions need close attention

New Zealand’s Commerce Commission has given a thumbs up for the Kiwi mobile market  – and a thumbs down to any regulatory intervention – saying it’s a competitive market, serving customers well.

The Mobile Market Study final report says New Zealand’s mobile consumers are benefiting from an increasingly competitive market environment with market share among the three national players – Vodafone, Spark and 2degrees – has become more evenly balanced, with 2degrees taking more market share.

The report shows Vodafone and Spark still hold the lion’s share of the market, with 40.5 percent and 37.9 percent of subscribers, with 2degrees, which entered the market in 2009, now holding 20.5 percent of the market.

“We haven’t identified any particular problems or structural issues that could be hampering competition,” says Telecommunications Commissioner Stephen Gale of the report findings.

Unsurprisingly the findings were welcomed by Vodafone, Spark and 2degrees.

The study also shows an emerging market for ‘virtual’ operators selling mobile services without having to build their own mobile network.

The mobile virtual network operator (MVNO) holds just 1.1 percent market share, but has seen growth in recent months with companies including Vocus – which earlier this year slammed the preliminary Mobile Market report – Warehouse Mobile and Kogan entering the market. Trustpower also plans to enter the fray, bundling mobile offers with its existing broadband and energy services.

“Because of these developments, the Commission does not consider there is any need for regulation of wholesale access at this time,” the Commerce Commission says.

But Gale flagged the need for wholesale and retail competition matters to be at the forefront of decisions relating to the upcoming auction of radio spectrum for 5G services in order to ensure continued competition.

“With Spark, Vodafone and 2degrees each having a network of similar technology with similar geographic and population coverage metrics, looking forward we consider the allocation of spectrum to be particularly important for future competition,” Gale says.

The report, instigated back in 2017, comes as Vodafone and Spark jockey for 5G leadership. Vodafone has been testing 5G with plans to have a commercial service up and running in Auckland, Wellington, Christchurch and Queenstown in December.

Meanwhile Spark – which had its original 5G plans shot down by the New Zealand Government Communications Security Bureau over Huawei network security concerns – has launched a limited, invitation only, 5G service in Alexandra. The service uses Nokia technology.

When is unlimited not unlimited?

When it come to the services Kiwis are receiving from their mobile telco providers, the report notes that New Zealand’s 4G performance is ranked eighth out of 88 countries in an OpenSignal report, though the availability of 4G at 57th out of 87 countries.

It notes that mobile plans offering higher volumes of data are increasingly popular. To highlight that, it noted the total number of residential subscribers purchasing voice, SMS and data bundles with allowances of 3G or more was up from 133,000 in 2016 to 497,000 in 2018.

Spark, in its cross submission on the reports preliminary findings paper, noted a shift towards unlimited data plans, including ones that can be shared across several users, as a predominant trend in the retail market.

However, Teligen, which does telco benchmarking, much of which the ComCom report relies on, no longer considers New Zealand’s ‘unlimited’ data plans to qualify as unlimited, because of telco’s throttling the speed once a threshold has been reached.

The average volume of data used by mobile consumers was 2GB per month in 2018 – a figure the report says is growing strongly.

Prices for mobile services in New Zealand have been falling and compare well with other OECD countries, the report notes – though not all fare so well compared with Australia, with mobile prices per GB for the highest data plans offered in New Zealand coming in around NZ$80-$85, versus NZ$56 from Vodafone Australia and NZ$103 for Telstra.

“For the 2G and 5G  baskets, the New Zealand price reported by Teligen is currently at or below the OECD average.”

For larger baskets, however, mobile pricing in New Zealand is relatively high when compared to Australia, but below the OECD average.

One area the report does note a need for change is in the low number of consumers moving telco plans. Sixty-eight percent say they rarely, if ever, compare plans and 54 percent saying they haven’t switched providers in the past five years.

“By shopping around more frequently consumers are likely to trigger more competition between mobile providers,” Gale says.

“We are keen to see more consumer activity and will be looking into ways we can help New Zealanders understand whether they are getting the best deal possible and, if not, consider switching.”

However, in response, Vodafone NZ says its data shows a high number of Vodafone customers change the make-up of their mobile plans each year – if not their provider.

KIWI TELCO 2DEGREES UPS BROADBAND BATTLE WITH AMAZON DEAL, PRICE FREEZE

Kiwi telco 2degrees is ramping up its push for the broadband market, announcing a new deal with Amazon Prime Video – it’s first big move into streaming video, and plans to hold broadband pricing steady for the coming year.

The telco is a distant player in the New Zealand broadband market, with its 78,000 broadband customers far below that of Spark’s 700,000, Vodafone’s 400,000 and Vocus’ 200,000.

The telco is offering Amazon Prime Video as an extra for customers on its unlimited plans, which start at $85/month, or $75 for customers with a pay monthly mobile plan. Amazon Prime Video is available in New Zealand for US$5.99/month.

It will, however, only apply to new customers.

“This is a global brand that has made significant strides with exclusive and award-winning content and we’re delighted to offer that to 2degrees broadband customers,” 2degrees chief of consumer, Scott Taylor, says.

The telco is a late entrant to the video streaming market as New Zealand telcos, like those around the world, seek to bolster their revenues and offset downward price pressures on connectivity, while building customer loyalty.

New Zealand’s largest broadband provider, Spark offers its own Lightbox streaming service as well as Netflix, which is the largest internet streaming service in NZ, while Vodafone has Neon.

Spark is also firing up an online sports service, Spark Sport, open to any Kiwis, not just Spark broadband customers.

The offer is just one of several initiatives 2degrees is taking to drive its broadband uptake, with the company also announcing a freeze on its residential broadband pricing for the year. That freeze follows earlier moves from other Kiwi providers including Spark, Vodafone and Slingshot who have increased their pricing, passing on increases from network provider Chorus.

“If you’re a current 2degrees customer, we’ll swallow the costs on this one and we’ll give you our work we won’t put your prices up this year,” Taylor says of the plan.

“It’s our 10th birthday this year and being fair has always been part of the DNA at 2degrees. For us, that means thinking twice before we put prices up.”

The Kiwi wrap: UFB complaints, Fortinet deal for schools and Vodafone’s new fibre bridge

UFB complaints increase

Complaints about ultrafast broadband installations are on the rise in New Zealand, according to the latest report from the Telecommunications Dispute Resolutions.

The TDR, an industry body comprising a set of some 95% of the nation’s telco providers by revenue, which handles complaints for the sector, recorded 666 complaints and enquiries in the January to March quarter. Billing issues remained the largest source of complaints at 39% or 265 complaints/enquiries, with disputed charges the greatest proportion of billing complains.

Fibre installations, meanwhile, prompted 48 complaints/enquiries, or 7.2% of overall issues raised, behind customer service, faults and contracts – with TDR noting that while UFB installation complaints are on the rise, they “remain in proportion to the rise of installations across New Zealand.”

Vocus and Trustpower have continued to top the complaints list for New Zealand telcos for the Jan-Mar 2018 quarter, with 2.7 and 2.5 complaints per 10, 000 connections, respectively.  Both firms recorded a slight increase in complaints for the quarter.

Spark recorded just 0.5 complaints and enquiries per 10,000 connections, with 2degrees logging 0.7, and Vodafone 1.0 per 10,000.

Fortinet network security for Kiwi schools

New Zealand’s schools are to receive “more robust protection against online threats” with a new upgrade to the Network for Learning managed network, as usage across the network has soared to hit more than 12 petabytes in the first two terms.

The upgrade will see schools transitioning to a combined enterprise-grade firewall and internet filtering service from Fortinet. Improved internet filtering tools, modifiable to suit individual classes and students, and smart reporting will also be part of the upgrade, along with offerings to enable schools to manage attempts to bypass their internet filtering with virtual private networks.

Network for Learning (N4L) is a crown company whose network connects more than 2,400 schools across New Zealand.

The network has seen data usage almost double year-on-year. N4L said more than 374 million websites and 118.000 virus and malware threats have been blocked across the managed network in the first two terms this year.

Hawera High School in Taranaki is one school recently affected by ransomware, with student work and teaching resources among the files encrypted – with a demand of US$5,000 in bitcoin made for the return of the data. The school had opted out of N4L’s current security offering…

Vodafone serves up fixed wireless as fibre bridge

Vodafone New Zealand is offering a fixed wireless broadband service, targeting those customers waiting for fibre to be installed.

The Ultimate Home Fibre plan will provide customers with a mobile broadband connection via Vodafone’s 4G/3G network while they wait for a fibre connection.

The telco said its new service will make it easier for people to switch to fibre. “Our customers tell us they are frustrated by installation wait times, while others say they are putting off a move to fibre because they simply don’t want to be disconnected while they wait,” added Vodafone consumer director Matt Williams.

Vodafone claims ‘tens of thousands’ of customers across all providers are waiting for fibre, which is installed by Chorus and other local fibre companies.