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NZ Telecommunications - Internet & VoIP

Internet and ISP

The New Zealand ISP market is dominated by Telecom's Xtra and TelstraClear, jointly controlling around 75% of the broadband market and 78% of the dial-up market.

Second tier providers include ihug and CallPlus, with a small sector of the market comprising rellers of Telecom's dial-up services.

Commoditisation of products has been driving ISP consolidation as fewer and fewer 2nd tier ISPs are be able to offer a complete range of ISP services with full, direct access to Telecom's fixed data network.

Data Services

The New Zealand's data market continues to outpace other market segment in terms of growth and market share.

Up to 2006, the overall key market driver was mobile. Once mobile reached saturation, in 2007, the focus has been largely on high speed broadband to drive convergence.

As customers migrate from higher margin dial-up services to the much lower margin broadband services, the ISP revenue model is under increasing pressue.

The key to ongoing success is the adoption by Broadband Service Providers (BSPs) of the triple play model - delivering voice (VoIP), Internet access and video (broadband TV) over the one broadband connection.

Broadband is expected to continue to drive revenue growth, with the data market expected to increase to 11% in 2007 and 12% in 2008.

Telecom is continuing to migrate data revenues from the old PSTN [Public Switched Telephone Network] to NGN [Next Ggeneration] revenues based on enhanced data capabilities using packet switching, IP and broadband.

VoIP

The use of Internet Protocol [IP] for voice communications is becoming increasingly popular in New Zealand reducing telephony charges and delivering advanced user and network features.

In spite of significant adoption of VoIP and IP telephony amongst the business sector, especially amongst larger organisations, residential VoIP adoption in New Zealand is lagging most of the developed world.

Growth in consumer VoIP services will gradually impact traditional fixed-line services in New Zealand over the next five years as well as fixed-to-mobile revenues.

A few of the second tier players including Woosh Wireless are now incorporating VoIP as part of their overall product suite.

By 2006, the number of New Zealanders registered for Skype's P2P VoIP telephony application had soared to over 100,000.

Handsets

Handsets are also emerging to support VoIP use in the consumer market. Netgear’s Skype Wi-Fi Phone, the world’s first wireless Internet phone allows users to make free calls to other Skype users anywhere in the world, anytime you have Wi-Fi access, without a PC.

This is the first phone to combine the power of VoIP calling, wireless technology, and Skype's software. The phone can be used anywhere in the world there's a Wi-Fi signal available to call other Skype users for free. No monthly fees and no contracts required. And for very low charges, you can use SkypeOut minutes to call any phone.

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