Telecom loses mobile market share

Mobile connections/market share by connection
Vodafone: 2,479,000 (source: June quarter financial report)
Telecom: 2,152,000 (source: September quarter financial report)
2degrees: 206,000 (source: 2degrees announcement, February)

Telecom has lost mobile market share, its September quarter results reveal, tipping Vodafone back over the 50% market share mark.

The carrier enjoyed another big gain in XT uptake. There are now 839,000 on Telecom's 3G network, or around 40% of Telecom's total mobile customer connections.

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However, the XT gain was not enough to offset the loss of customers from its older CDMA network.

The combined mobile base of XT and CDMA customers, reported as 2,171,000 in Telecom's last quarterly update, has fallen to 2,152,000 - a net loss of 19,000 customers.

The TelstraClear effect
Telecom chief executive blamed the net loss on a "large wholesale CDMA customer" (read: TelstraClear - which lacks its own cellular network - moving its 30,000 mobile customers to Vodafone under a mobile virtual network operator deal.

TelstraClear signed a new wholesale deal with Vodafone after Telecom denied it access to its XT network (see TelstraClear launches 3G, with a little help from Vodafone). The process of transitioning its mobile customers to Telecom was completed this quarter.

Dr Reynolds said TelstraClear need to move the final customers at speed, which let to a very high customer acquisition cost for the Australian company.

Higher revenue per user
On a brighter note, Dr Reynolds said every customer who upgraded from CDMA to XT did deliver higher arpu. Average revenues per user rose 53c to $26.83 over the year-ago quarter.

Smartphones account for one quarter of sales
The chief executive added that around 25% of retail phone sales are now smartphones, a phenomena that was lifting arpu. 

As with Telecom's previous earnings announcement, Dr Reynolds continually name-checked Google's Android smartphone platform, to the exclusion of mentioning any other handset maker.

Vodafone losing customers too
In its latest quarterly report, to June 30, Vodafone NZ lost 25,000 customers for a total 2,479,000.

2degrees benefiting?
With both major carriers losing customers (and, yes, the TelstraClear deal counts as a loss), the beneficiary would appear to be 2degrees. However, the newcomer has not released customer numbers since a February 26 update, at which it said it had 206,000 active customers. Its next update is scheduled for February 2011.

NBR has estimated, however - give information supplied about number porting by the independent TCF - that 2degrees could now have around 400,000 connections (the situation is muddied by the fact that some people have SIMs for more than one carrier).