NZ incumbents still dominate, says regulator

Nicole McCormick
23 Apr 2010

In another blow to Telecom New Zealand, regulator the Commerce Commission has complained that “market shares of incumbents remain high” compared with similar markets such as Australia.

“Despite increased competition in the New Zealand telecommunications sector, the market shares of incumbents remain high and markets remain concentrated when compared with…the United Kingdom and Australia,” said Ross Patterson, the NZCC’s telecom commissioner, in an annual review.

Patterson said while mobile competition had increased since 2degrees launched last year, mobile voice usage remained “low by international standards.”

“In addition, price and usage vary significantly depending on whether calls or text messages are sent to another subscriber on the same network or to a subscriber on a different mobile network,” he said.

According to the report, alternative providers of broadband services on Telecom’s network have increased their market share from 24% to 37% in the last three years.

Over the same period broadband uptake has doubled.

“Uptake of broadband is now at or around the OECD average and broadband speed availability and quality have improved significantly,” said Dr Patterson.

In the fixed-line market, alternative voice providers have increased their market share from 8% to 25% over the three-year period.

When asked if the firm would seek regulatory relief from its operational separation undertakings, chief executive Paul Reynolds told the New Zealand Herald this week there was a “real opportunity to look at reality.”

Telecom New Zealand recently cut its profit guidance for the next three years, blaming the government’s new broadband subsidy plan and lower sales.

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