KEY POINTS:
The value of the New Zealand telecommunications market fell by 1 per cent in the March quarter, despite subscriber growth in broadband and mobile, according to independent tracking of the industry.
Telcos were finding it increasingly difficult to increase revenues, market analyst Tim Shepheard of independent research and consultancy company IDC said today.
"Traditional fixed telephony revenues continue to be eroded, while the so called 'new wave' broadband and mobile revenues are not growing enough to compensate," he said.
IDC's telecommunications market tracker put the quarterly value of the New Zealand market around $1.5 billion at the end of the March quarter.
Broadband uptake grew 5.8 per cent in the quarter, taking the total broadband (non-cellular) subscriber base to more than 740,000 customers, and household penetration to 46 per cent. Broadband revenues grew only 2.4 per cent to $103.9m.
Telecom was estimated to have 65 per cent of retail customer market share, IDC said.
Competition was increasing with other ISPs capturing 52 per cent of broadband subscriber growth this quarter.
Mobile services in operation were equal to 105 per cent of population at the end of the March quarter, at 4.48 million. Despite subscriber growth of 2.4 per cent, total mobile revenue declined 1.4 per cent in the March quarter.
Vodafone retained mobile dominance recording 52.4 per cent subscriber market share and 60.3 per cent revenue share, IDC said.
Traditional fixed telephony revenues declined a further 2.2 per cent contributing just over $700m.
Telecom's total revenue market share fell marginally to 59.9 per cent, with Vodafone a clear second holding 23.5 per cent and rounding off the top three was TelstraClear with 8.4 per cent share.
Shepheard said the New Zealand telecom's industry continued to be under incredible political and public pressure to deliver cost effective broadband and mobile services to both consumers and businesses.
"Unfortunately for service providers, subscriber growth is not being met with comparable revenue growth. The persistent concern of how to drive revenue from broadband services is an ongoing issue for telcos across the board," he said.
"The price and speed-led competition is the tool of choice in this country, which to an extent is addressing the current needs of users.
" However telcos need to attract on price but grow revenues based on services - and a vision beyond access into rich multimedia content and value added services is unclear."
- NZPA
