Fixed broadband prices most expensive in New Zealand, as fibre overtakes copper

Fibre has overtaken copper as the main way Kiwi households access the internet from home, according to the findings of the Annual Telecommunications Monitoring Report released by the Commerce Commission this week.

The report also found New Zealand is more expensive than the international average when it comes to prices for medium use fixed-broadband plans.

The report highlights the trends in the industry across New Zealand.

The report shows that at 30 September 2019 there were 880,000 homes and businesses connected to the fibre broadband network, an increase of 31% from 2018. Meanwhile, copper connections dropped 23% to 581,000 over the same period.

Fixed wireless connections have also been growing, up 14% to 188,000 from 2018. However, growth was at a slower rate, almost half the rate of the previous year, the report shows.

"New Zealanders are increasingly moving to the fibre broadband network. This trend is set to continue with nearly three-quarters of a million homes and businesses yet to switch in areas where fibre is available to be connected," says telecommunications commissioner Dr Stephen Gale.

In terms of price, the report shows mobile plans remain internationally competitive.

"New Zealand's mobile plan prices are below the OECD average for all plan types we measure. For instance, a medium use plan of 100 calls and 2GB of data costs $28, 24% below the international average," says Gale.

"Meanwhile, prices for a medium use fixed-broadband plan (150GB/30Mbps) and voice bundle have remained at $75 in 2019. As the OECD average price has dropped since last year, New Zealand is now more expensive than the international average."

New Zealanders' love affair with consuming data continued in 2019, with average data consumption across both broadband and mobile increasing. However, the rate of growth is also slowing, halving from 2018.

The report also looks at market shares for the industry. Overall, smaller telecommunications providers continue to grow their market share in the fixed-broadband market.

"Increased competition in the market is good for consumers. In the past year we've seen encouraging signs with small retailers like MyRepublic and Stuff Fibre growing their market shares," says Gale.

"Overall, smaller retailers' market share grew from 8% to 11% in 2019, with customers largely being wooed over from Spark and Vodafone.

New Zealand's international ranking in broadband speed improved from 26th to 17th reflecting the increase in average fixed broadband download speeds from 24Mbps in 2018 to almost 33Mbps in 2019. This is well above OECD averages and reflects the uptake of fibre broadband, the report shows.

The Commission's Measuring Broadband New Zealand programme aims to provide consumers with independent information on broadband performance across different technologies, providers and plans to help them choose the best broadband for their household. The next report is due out in May and will be available here.

The report is the 13th Annual Telecommunications Monitoring Report produced by the Commission under section 9A of the Telecommunications Act to monitor competition, development, and performance of telecommunications markets. The report presents key industry metrics and long-term trends.

The next Measuring Broadband New Zealand report is looking to include social media and gaming testing to provide consumers with more information about their expected "real world" broadband experience. Adding more volunteers to the programme will enable the commission to show more comparisons of providers across all the measures, including by geographic region.