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Kiwi telco sector sheds $350 million in retail revenue in two years

By Heather Wright, Wed 8 Jul 2015
FYI, this story is more than a year old

New Zealand telcos have seen a $350 million decline in retail telecommunications revenue in the last two years with telecommunications investment climbing $420 million during the same period.

The Commerce Commission’s recently released 2014 Annual Telecommunications Monitoring Report shows the industry saw a $40 million decline in the 2013-14 financial year, with revenue down to $5.17 billion - $350 million short of 2011-12’s peak of $5.52 billion.

The report says surveyed telecommunications industry retail revenues were essentially flat for five years before appearing to pick up in 2011/12. However, the increase was an aberration, with revenue falling in 2012/13 and again in 2013/14.

While there was a small rise in mobile revenues to $2.49 billion, fixed line revenues fell to $2.68 billion.

Meanwhile the UFB fibre network rollout continued to underpin a high level of investment by the telco sector, with last year’s investment of $1.69 billion equaling the previous high set in 2008-2009.

The report shows fixed broadband connections continued growing to reach 1.39 million as at 30 June, with average data consumed per connection also increasingly strongly to reach 32GB up from 26GB the prior year.

And while we all love to complain about the speed of our internet connections, the report notes that according to Akamai our average broadband speed in Q4 was 7.3kbps – up from 5.3kpbs a year earlier and 4kbps in the 2011-12 year.

Fixed-line connections were static at 1.85 million, with the report noting that while there has been a gradual decline in households getting voice service over their fixed line, retaining the line is ‘usually necessary to consume reasonable quantities of data’.

The calling volumes on those fixed lines, however, declined to 8.26 billion minutes, while mobile calling minutes continued to rebound – nearly offsetting the fall in fixed minutes, and reaching a new high of 5.3 billion minutes.

Spark still claims the lion’s share of the fixed-line rental revenues, at 58%, though its share is slowly being eroded. The telco had 80% share back in 2005-06, when the reports first began. By 2010-11 that had dropped to 68%.

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