Mobile competitive, fixed line pricey - ComCom

Its official – the entry of 2degrees has resulted in a more competitive mobile market.

The Commerce Commission’s latest six-monthly Telecommunications Market Monitoring Report highlights the launch of 2degrees in August.

“The entry of 2degrees into the 2G prepaid market has meant for the first time in the Commission’s analysis, New Zealand’s prepay prices are benchmarked at below the OECD average,” the report says.

The report also notes that in August and September, number porting requests tripled, peaking at 17,300 ports in September.

However, while prices became more competitive in the mobile market, fixed line services remain expensive when benchmarked internationally, according to the report:

“Telecom’s residential line rental is one of the highest in the OCED and its residential fixed-to-moible prices are among the highest in the OECD.”

With regards to broadband, the number of subscribers continues to grow with an annual uptake of 14%, and pricing is broadly in line with plans that are offered in OECD countries.

But the Commission notes that the growth in unbundled services (those provided by Telecom's competitors who have put their own equipment into exchanges) is “subdued” and blames this on Telecom’s wholesale loyalty offers between December 2008 and July 2009. In the report it claims the offers encouraged “the sale of broadband plans that rely on a wholesale bitstream service rather than unbundled lines.”

The Commission announced last week it's taking legal proceedings against Telecom in the High Court over these wholesale offers.

A copy of the full Commerce Commission report can be found here.