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 wrap: Spark ups sport foray, power co wins telco awards

17 August

In a week that highlights the changing telco market in New Zealand, we’ve seen Spark marking plans for a standalone sports media business, Trustpower continuing to win big in the telco market, and new 4K and UFB developments.

Spark ups sports play

New Zealand’s largest telco, Spark, will partner with an as yet unnamed specialist sports-streaming platform as it looks to create a standalone sports media business.

The company this week secured exclusive rights to three seasons of Premier League, from next August, and Manchester United TV. The deals follow the April’s announcement that Spark had won the rights to the Rugby World Cup 2019 and Women’s Rugby World Cup 2021 and other premium rugby tournaments.

Spark says the platform used for the delivery of the streamed sports content won’t be the platform used for its current streaming service, Lightbox and will instead be from “a specialist platform provider , with extensive experience streaming live sports events.”

Spark managing director Simon Moutter, said the deals were “not about using sports content simply as an acquisition or retention tool for our broadband or mobile base,” tipping them as a potential future source of revenue and profit growth for the company.

Jeff Latch has been appointed as head of Spark Sport. Meanwhile Kiwis are watching anxiously, hoping their World Cup and football viewing won’t be marred by the issues seen in Australia in June when Optus’ struggled to deliver Fifa World Cup streaming services.

Changing face of NZ telco market as Trustpower reinforces market hold

Trustpower, an energy company which branched out into telecommunications, has locked established players out of the winners circle in the annual Roy Morgan New Zealand Customer Satisfaction Awards,  snapping up Home Phone Provider of the Year and Home Broadband Service Provider of the Year.

The company has won home phone provider for the past four years and said it had noted 12.5% growth in internet connections last year.

Craig Neustroski, Trustpower general manager markets, said the company was ramping up its use of predictive AI and machine learning to help customer satisfaction. “We started 2017 with nine automated processes and we will have reached 20 by the end of this year,” he says. “We now have over 400 topics that can be accessed through out chatbot, webchat or the Trustpower app, with our New Zealand-based phone agents taking calls from those who prefer to speak directly to a person.”

Skinny Mobile, Spark’s low-cost, online-only brand, was a first time winner in the award this year, taking out Mobile Phone Service Provider of the Year.

Apple, meanwhile, was rated the Mobile Handset Provider of the Year, with the iPhone also making it into the ‘Best of the Best’ with 95.0% satisfaction, behind Emirates on 96.2% and Holden on 95.9%.

Kordia completes first live 4K broadcast

Kordia has completed what it says is New Zealand’s first 4K ultra high definition broadcast in a move the state-owned commercial enterprise says shows 4K is a viable option for broadcasters.

“We’ve proven we can do it right here, right now using existing digital terrestrial technology which we believe is the most reliable option when delivering 4K content,” Dean Brain, Kordia head of media, said.

Huntly gets fibred-up

Fibre is beginning to roll out in Huntly as part of the UFB Extension project – the next phase of the New Zealand Government’s Ultrafast Broadband programme which sees an additional 190 towns receiving access to fibre-to-the-premise tech.

The Huntly build, which is carried out by UltraFast Fibre, will offer UFB connections to up to 3,000 homes and businesses.

William Hamilton, Ultrafast Fibre CEO, said the Huntly installation provided “a real opportunity to help reduce the digital divide.”

“We are aware that some parts of this community could benefit from some help in accessing high-speed broadband, and it is something UFF is prepared to push for,” he added.

On completion of the UFB Extension project in 2022, 87% of Kiwis will have access to FTTP.