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Telco report shows consumers are getting more for their money — ComCom

Phone companies customers are getting more for their money, the Commerce Commission says. The regulator today released its latest annual telecommunications monitoring report analysing the state of New Zealand’s telecommunications markets.

“A trend which has become more obvious this year is that telecommunications services are delivering more to consumers for less cost. Spending on telecommunications services is about the same in real terms as it was 10 years ago, but consumers are getting far more – data, texts and calling minutes – for their money, particularly in the mobile market,” Telecommunications Commissioner Dr Stephen Gale says.

2degrees effect not reaching corporates
Telecommunications Users Association (Tuanz) CEO Paul Brislen is broadly upbeat. "It's clear that where 2D enters the market, prices fall and services increase. Where they're not active  — the high end corporate plans, for example) we pay far more than the OECD average.

"But as the ComCom points out, even the top end plans have changed dramatically since the data was gathered so it's a good sign of the shifting state of the mobile market."

Source: Commerce Commission. Click to zoom.

Tex: ComCom failed to take several factors into account
2degrees estranged founder Tex Edwards has also weighed into the debate, saying the Commerce Commission has failed to take two major market factors into account.

One is subscriber-acquisition cost (SAC), which usually arrives in the form of handset subsidies or big discounts on smartphones if customers commit to a high-yielding 12 or 24 month plans. Although 2degrees is gaining market share overall, according to the ComCom's report, the relative newcomer is still strongest in pre-pay. Telecom and Vodafone's deeper pockets allows them to offer deeper handset discounts and maintain their lead in more desirable contact customers, Mr Edwards maintains.

The other is the six-year, $300 million public-private Rural Broadband Initiative (RBI), currently being rolled out by Chorus and Vodafone. Mr Edwards styles it as a state subsidy to market-leader Vodafone.

Increase in online activity
“We’ve also seen a steady increase in online activity by New Zealanders. This demand is driving improvements in both personal and business communications as well as education, health and entertainment. Online services that are large and growing include internet banking, social networking, online purchasing and health services."

There were a number of other key findings of the report.

  • Industry investment increased significantly from a recent low of $1.24 billion in 2010/11 to $1.58 billion in 2012/13. This increase was largely driven by the ultra-fast broadband fibre network roll-out.
  • Fixed broadband connections continued to grow from 1.24 million to 1.32 million in the year to 30 June 2013. Now, about 85% of households have broadband, up from 65% three years earlier.
  • Fixed-line calling volumes continue to fall, while mobile calling volumes are increasing. Total mobile minutes grew to 83 minutes per person per month, while fixed-line calling declined to 401 minutes per household per month.
  • Total retail telecommunications revenues suffered a slight fall in 2012/13 to drift back to $5.21 billion from $5.25 billion in the prior year. Data revenues continue to rise while voice related revenues continue to fall.

RAW DATA: Read the full report (PDF)

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Comments and questions

Of course things have changed -- drastically -- in 10 years! Go figure.

And so has the way we all communicate. The telcos are still seriously over-priced for what they offer and are evolving way too slowly. Despite lip service, they don't seem to be customer focused, but stakeholder/profit focused, which is short sighted. Ironically, if they were more customer focused* they would have even healthier profit margins.

Mobile and mobile data costs need to come down or offer significantly greater data allowances, so we don't feel knee capped.

*And what's up with Telecom and Vodafone still not offering Ultra Fast Fibre plans in Hamilton (when many other players do)? Fibre's physically been here for nearly two years! It's not as if Hamilton is a small city.

Makes you wonder why, in its "infinite wisdom" the Commerce Commission so royally shafted Chorus who has been over-delivering on it's regulated service levels for years, and people are already paying what can be reasonably considered a fair price for broadband. Otherwise they would still be using dial-up.