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NZ mobile market in 'good shape', Commerce Commission claims

By Shannon Williams
Fri 27 Sep 2019
FYI, this story is more than a year old

New Zealand's mobile market is in 'good shape', with an increasingly competitive market environment resulting in benefits for mobile consumers, according to the Commerce Commission.

The Commission released the findings of its study into New Zealands' mobile services market, which found the established presence of 'three independent, national network-based providers is good news for Kiwis.

"Having assessed the state of competition in the mobile market, we haven't identified any particular problems or structural issues that could be hampering competition," says Telecommunications Commissioner Dr Stephen Gale.

The study also concluded there is an emerging market for virtual operators to sell mobile services to consumers without having to build their own mobile network. This includes companies such as Vocus, Warehouse Mobile and Kogan, which offer mobile services based on commercial wholesale agreements with the network operators. 

Trustpower also intends to enter this market and, like Vocus, bundle mobile offers with its existing broadband and energy services. Because of these developments, the Commission says it does not consider there is any need for regulation of wholesale access at this time.

"With Spark, Vodafone and 2degrees each having a network of similar technology with similar geographic and population coverage metrics, looking forward we consider the allocation of spectrum to be particularly important for future competition," explains Gale.

"In our view, there is a need for wholesale and retail competition matters to be at the forefront of decisions relating to MBIEs upcoming allocation of 5G spectrum," he says. 
 
"While we consider that, overall, mobile services are in good shape, we do think there is room for consumers to keep pressure on providers to compete harder on price and service quality," says Gale. 

"At the moment a lot of mobile customers tend to stick with their providers and are somewhat reluctant to switch even though they know it is easy to do so."

The study found 60% of consumers say it is easy to compare plans though 68% rarely if ever do, and 54% haven't switched providers in the past 5 years.

"By shopping around more frequently consumers are likely to trigger more competition between mobile providers. We are keen to see more consumer activity and will be looking into ways we can help New Zealanders understand whether they are getting the best deal possible and, if not, consider switching," explains Gale.

Some of the other findings from the study include:

  • New Zealand ranks 8th out of 88 countries for 4G speed and more than 96% of consumers have 4G coverage
  • Average mobile data usage per month has more than doubled in the past two years
  • Prices for mobile services have been falling and compare well with other OECD countries
  • Spark, Vodafone and 2degrees are all profitable and have collectively invested $2.5 billion in their mobile networks over the past decade
  • Average revenue per user has declined slightly to around $25 per month when handset revenues are excluded
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