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NZ Telecommunications - Market OverviewNZ telecommunications industry is one of the more difficult ones in the developed world. With an entrenched incumbent Telco, Telecom NZ spun out of a Government owned entity in the mid 1990's, TNZ holds a stranglehold over the development of the nations ability to take full advantage of the communications innovation.
NZ Telecommunications Market and IndustryNew Zealand is a long, under populated country, making for a difficult ROI on network and services investment. In 2005, NZ had one of the lowest levels of broadband penetration in the world. The years following did not show global rates of growth, with the NZ slipping further behind. The market growth has been difficult due to:
The lack of sustainable competition for fixed line data services has been largely due to the monopoly control by the incumbent Telco, Telecom New Zealand. TNZ has continually failed to provide resellers with a viable wholesale product. The NZ Government finally stepped in to force Telecom to create a more competitive telecommunications landscape. Telecom Separation PlanThe initial model suggested by the Ministry of Economic Development [MED] was too expensive and resource intensive to be viable for Telecom. Telecom responded with a proposed split of its current company into three separate entities. This better optimises Telecoms investments in the IP backbone, the only nationwide network for Internet services. Splitting out the network and possibly funding the massive Capex required with long term infrastructure bonds, is perhaps the only way New Zealand can the exploit the opportunity for transformational economic and social change the Internet is providing. After intense negotiations, a mandate was issued in October 2007 for Telecom to be broken into three separate divisions: wholesale, retail and network. There are outstanding issues with the plan, and in spite of 'Separation Day' looming on March 31 2008, the current plan may still be rejected. Significant gaps is the current plan include:
InternetNZ Response According to InternetNZ Executive Director Keith Davidson “Significant changes are needed to meet the requirements of the Telecommunications Act and the Minister should not accept the plan in its current form". TUANZ Response TUANZ has also rejected the current plan [as of Jan 28 2008]. The effect of this intervention will not be seen until towards the end of 2008.
Policy DevelopmentsBy the end of 2005 New Zealand had yet to make the tough policy decisions necessary for it to move into the converged markets of telecoms, IT and media - essential to fully utilise the economic and social benefits of the Internet economy. New Zealand maintains no industry-specific regulation for entry into the supply of telecommunications goods or services. Instead, reliance is placed on the Commerce Act 1986 (as amended by the Commerce Amendment Act 1990), which is the general law of competition in New Zealand. The Telecommunications (International Services) Regulations 1994 provide for the registration of any person providing public switched telecommunications services, or leased circuits, between New Zealand and any overseas operator in a territory outside New Zealand. The Telecommunications (Disclosure) Regulations 1990 impose certain information disclosure requirements on the Telecom Corporation of New Zealand Limited (Telecom) and its subsidiaries.
Local Access Market
VoIP will have a significant impact on the local access market, forecast to drive down voice revenues by as much as 80-90% over the next 5-10 years. This revenue loss will be offset by revenue generated from broadband access. As of 2008, Telecom will find it more difficult to maintain its virtual monopoly [80% market share] over the local access market. Recent regulatory and infrastructural changes have yielded a marginal advantage to alternate providers, furthered by the government's decision in mid-2006 to unbundle of the local loop (LLU). The effects of this will not be felt until late 2008.
Data ServicesNew Zealand's data market continues to outpace other market segment in terms of growth and market share. Up to 2006, mobile was the key driver of overall telecom growth, however the market reach staturation by end of 2007. With content providers now focusing on provision for broadband users, the pressure on Internet users to upgrade is increasing, and the higher margin dial up ISP accounts are declining rapidly. The key to success in the data market will be the adoption by the Broadband Service Providers (BSPs) of the triple play model, delivering voice (VoIP), Internet access and video (broadband TV) over the one broadband connection. Driven by broadband, revenue growth in the data market is expected to increase to 11% in 2007 and 12% in 2008. Telecom is continuing to migrate data revenues from the legacy services based on the Public Switched Telephone Network (PSTN) to Next Generation' revenues based on enhanced data capabilities using packet switching, IP and broadband.
NZ Telecom Industry OrganisationsGovernment BodiesNew Zealand Government’s Minister of Communications and Minister of Information Technology is currently the Hon. David Cunliffe Telecommunications Commissioner - Douglas Webb The Ministry of Commerce - responsible for advising the Government on the regulatory policy for the telecommunications sector. This work is carried out by the Communications Division which provides policy advice to the Minister of Communications on telecommunications, broadcasting, the radio spectrum, and postal services. Independent OrganisationsInternetNZ - is a non-profit organisation dedicated to protecting and promoting the Internet in New Zealand and fostering a coordinated, cooperative approach to its ongoing development. TUANZ - is a not-for-profit organisation that for 20 years has been fearlessly and aggressively promoting the needs of end-users of telecommunications in New Zealand. Wireless
Data Forum - non-profit ICT industry group that facilitates
collaboration, education, motivation, promotion, peer access, research,
networking and government liaison. WDF is focussed on driving economic
value through Wireless and Broadband innovation. Now known as Wireless
and Broadband Forum. Global AffiliationsINTUG - International Telecommunications Users Group PTC - Pacific Telecommunications Council ATUG - Australian Telecommunications Users Group, full membership discounts to the ATUG Conference and Exhibition and other membership services
Annual Industry EventsTUANZ Events
Wireless Data ForumConvergence Oceania - a free annual event
Next: NZ Broadband Market | Broadband | Mobile | Convergence | Internet & VoIP |
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