Mobile broadband booming - ComCom annual telco industry report

Mobile data use is booming, but mobile data revenue for Telecom, Vodafone and 2degrees is has risen only modestly, according to a Commerce Commission annual survey (see graphs at right).

The Commerce Commission today released its 2011 telecommunications annual monitoring report.

“Most notably we’ve seen a fall in market concentration in all sectors which indicates that competition is becoming more intense. Consumers are being offered a more diverse range of competitively priced services, often bundled together in one package,” said Dr Ross Patterson, Telecommunications Commissioner.

Although the report focuses on the 2011 year, it also tracks developments in the market since 2006.

“A significant change we’ve seen since our last report is that the consumption of mobile data has doubled in the 2010/11 year. This increased consumption is accompanied by a substantial decrease in the price of mobile data and reflects the growing popularity of accessing the internet using mobile devices like smart phones and tablets.”

“Another trend is that the number of fixed broadband connections has been steadily increasing since 2006, and we expect to see this trend continue. Viewed alongside the decrease in revenue for fixed line voice services, the increasing importance of internet connectivity for consumers is clear,” said Dr Patterson.

Other key findings of the report include:

• revenue from mobile broadband is showing strong growth while mobile voice revenues are starting to decline

• while the number of fixed line telephone connections is stable, the number of fixed broadband connections continues to grow steadily

• total retail telecommunications revenues have barely changed over the last six years while investment increased from $0.92 billion in 2008/09 to $1.24 billion in 2010/11

• the fixed line retail market has falling revenue for most services with only internet revenue rising

• consumers are happy with the mobile switching experience.

Total surveyed investment by the telecommunications industry hit a peak of $1.69 billion in 2008/09 (as Telecom, Vodafone and 2degrees carried out major mobile network upgrades) and has dropped back in subsequent years to $1.24 billion in 2010/11.

Residential ISP market share
In the residential ISP market, the big five (Telecom, TelstraClear, Vodafone, Orcon and Callplus/Slingshot) continued to dominate, with Telecom's retail broadband service keeping its share of around half the market.

Average download speed is increasing, and has passed Australia (see chart right) but is still a modest sub-4Mbit/s. Many premises are now capable of receiving faster speeds, but their owners are not always willing to pay extra for unrestricted speed plans. Averages are also dragged down by peak-time traffic jams.

And as ever with the internet, geography is destiny. North Auckland, where the Southern Cross Cable lands, has the fastest download speeds. Results trail off as you move further south.

Mobile market share
The report also confirms 2degrees' strong growth in market share (to 13.8%) and Telecom's fall (to 37.6%) while Vodafone has remained flat on 49%.

The previous year, the Commission put 2degrees on 8%, and Telecom on 42%.

On February 24, as Telecom announced it had lost a net 92,000 mobile over its December quarter, NBR published the latest mobile market standandings (based on Telecom and Vodafone financial reports, and 2degrees' public statements):

TOTAL NZ MOBILE CONNECTIONS

Vodafone: 2,434,000
Telecom:  1,987,000
2degrees: 875,656
TelstraClear/MVNOs: 50,000

2DEGREES

August 2009: launches
February 2010: 209,000 customers
March 2011: 580,000 customers
February 2012: 876,000 customers

All carriers count each connection as a "customer", so a person with separate SIM card accounts for, say, a mobile phone, data stick and iPad, counts as three customers. MVNOs or "mobile virtual network operators" re-sell mobile service. For example, TelstraClear Mobile is a re-badged version of Vodafone's service.

RAW DATA: Read the full report