What lies ahead: Telecoms

Next year should, finally, be the year broadband arrives in New Zealand. However, it is broadband of a limited nature and Telecom will continue to control the lion's share of the market.

After avoiding regulatory intervention in the form of "local loop unbundling", Telecom has rolled out its wholesale service to competing internet providers.

However, delays and limits on the service mean most internet providers are unhappy with the service they can offer.

Customers are being moved over to the wholesale plan, known as the "unbundled bitstream service", at a relatively slow rate and while Telecom is connecting up to 800 customers a day most are customers of its own provider, Xtra.

Telecom has promised to hit its self-imposed target of 250,000 residential broadband customers by the end of 2005 and it is well on track to do just that. The Commerce Commission is keeping a close eye to make sure one-third of those are wholesale customers.

However, recent press releases from the commission and Telecom over the number of residential customers indicate they will be counting resale customers as part of the wholesale regime subset.

Telecom plans to allow rivals to wholesale faster broadband services early next year, but the Telecommunications Commission is also going to investigate if it should be allowed to offer retail plans without offering a wholesale equivalent at the same time, as is common overseas.

The Telecommunications Act will be overhauled next year.

The outgoing Minister of Communications, Paul Swain, launched, the review and incoming minister David Cunliffe will oversee the first revamp of the legislation.

On the agenda: more powers for the commissioner to enforce decisions as well as possibly greater ability to intervene in the market.

Off the agenda: despite an assurance from Swain that he would consider such a move is any idea of a telco ombudsman's office to review customer complaints.

The mobile market will also heat up next year. Telecom and Vodafone will be battling for the high-value customer with their new third-generation networks. Telecom has already begun selling services on its T3G network aimed firmly at the business user and will launch more services, such as Push to Talk, early next year.

Vodafone's network is due to begin operation in the first half of 2005 and will be initially targeting the high-end consumer with video call capabilities. Telecom continues to roll out its "next generation network". The billion-dollar project is expected to take up to a decade to complete and will see an entirely new phone network installed throughout the country.