How the 2degrees-Vocus merger affected competition

Broadband market tighter than ever, mobile less so

When 2degrees completed its merger with Vocus in June 2022 CEO Mark Callender said he expected to win a greater market share and that the merger would increase competition. How did it go?

It’s too soon for a definitive answer. Think of this as an interim snapshot.

The results are mixed. Mobile looks a little less competitive, while fixed broadband competition has warmed up.

Mobile competition

Earlier this month the Commerce Commission published its 2023 Telecommunications Monitoring Report. It reports that a postpaid unlimited mobile plan “able to meet the average person’s needs” is $15 a month more expensive than the OECD average. Prices for prepaid mobile plans are on a par with the OECD.

Two years earlier, average prices for low-end NZ mobile plans were significantly lower than average prices in the OECD while the cost of an unlimited postpaid plan was $13 higher than the OECD average.

Which means that mobile prices in New Zealand have increased slightly relative to mobile prices elsewhere in the world. It’s not straightforward, but rising relative mobile prices suggest part of New Zealand’s market is less competitive.

The Spark result

Spark’s full year result saw mobile revenue go past $1 billion for the first time, up 3.1 percent on the previous year.

As the media statement for the results put it: “This was driven by connection growth, price increases, and the stabilisation of roaming revenues in the consumer market and was partially offset by declines in the business market as price competition intensified.

Broadband competition

Fixed broadband is more competitive. In 2022, prices for most users, but not high end users, were higher in New Zealand than in other OECD countries. Entry level plans here cost $65 a month, with the OECD average being $53. High end plans at $73 were significantly lower than the OECD average of $111.

Since then, the New Zealand position has improved. The Commerce Commission’s recent monitoring report says fibre 300 pricing is equal to the OECD average while Fibre Max is $14 lower than the OECD average. 4G wireless broadband in New Zealand is $6 lower than the OECD average.

There is external competitive pressure on broadband from LEOsats, but that applies equally to other countries. New Zealand broadband competition features low pricing from power companies, but 2degrees is a player in that market.

Market share stable for now

The Commerce Commission’s Telecommunications Development Levy (TDL) determination wasn’t designed to measure the relative performance of New Zealand telcos, but it does the job well. For now it sheds no light on whether 2degrees increased market share since its merger.

The most recent determination, which runs from July 1 to June 30, is not due until December. Last year’s TDL covers only the first year after the merger.

It shows the merged 2degrees’ share at 12.8 percent barely moved the dial from the previous period where the two companies separately had a share of 12.7 percent. Which means December’s TDL determination will be the first indication of any movement in market share.

Is the market more competitive?

Broadband has become more competitive in the last two years. The picture with mobile is nuanced, parts of the mobile market appear to be less competitive than before. As mentioned previously, it’s too early for a definitive judgement, but on balance, we can conclude the 2degrees merger has neither lessened or increased competition...yet.

Spark to take SMEs on AI journey

Spark is following up its Executive AI for Business Mini-MBA programme with a new AI Foundations course aimed at people working for small and medium-sized businesses.

There will be 2000 places for the week-long course that Spark says will give people “the foundational AI skills to improve day-to-day productivity”.

The course will be available to Spark Business customers, and the first of four sessions will start in November.

Spark Consumer and SME Director Greg Clark puts the programme into a wider context: “SMEs make up a large population of the business community in New Zealand. Spark supports over 100,000 of them for their technology needs.

Cost concerns

“In a high-inflation environment, the number one concern for our SME customers is escalating costs, which is driving a focus on productivity and efficiency. We know that AI can provide significant productivity gains, which is why it’s so important that we bring New Zealand SMEs on the AI journey.”

The programme comes at a time when the New Zealand Institute of Economic Research (NZIER) Quarterly Survey of Business Opinion found that 68 percent of SMES have no plans to evaluate or invest in AI technology. They told NZIER that a lack of understanding and perceived absence of value are the key barriers to AI adoption.

Network for Learning launches MyN4L self-service app

Network for Learning (N4L) is distributing MyN4L, an app that gives schools and their technology providers control over networks and online services. MyN4L also makes it easier for schools to work with Network for Learning products and services. It gives them information about online use and lets them self-manage network activity.

The app gives teachers, principals and IT service providers direct control over matters such as school WiFi networks, cybersecurity and cyber safety services. It can, for example, allow schools to create temporary WiFi credentials to guest users. N4L says more tools will be added in future updates.

MyN4L makes it easier for technology service providers to troubleshoot network issues.

ANZ fail to capitalise on optical and quantum research leadership

New Zealand and Australia are widely recognised as optical and quantum research leaders, but are behind the pack when it comes to commercialising the science.

A report by ANZOS, the Australian and New Zealand Optical Society looking at the photonics industry in the two nations shows we lag. Our photonics and quantum industry is growing at 2.8 percent each year, that’s well behind the global average of 7.3 percent.

Today the sector in the two countries is a $6 billion industry employing 34,000 people.

Auckland University associate professor Frederique Vanholsbeeck is ANZOS president and director at the Te Whai Ao— Dodd-Walls Centre, she describes the report as “both disturbing and timely”. She says it comes at a time when the New Zealand and Australian governments are examining the state of their universities and the science sector.

One NZ extends customer IT equipment disposal service

One New Zealand says it is expanding its electronic equipment disposal service for enterprise and public sector customers. The company already collects old mobile phones and tablets in a programme where they either end up being refurbished or recycled as e-waste. Now with businesses moving to Windows 11, the programme will help customers dispose of end-of-life hardware.

In other news...

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Story behind the Wall Street Journal paywall.

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For another take on this see: Australian Police conducted supply chain attack on criminal collaborationware by Simon Sherwood at The Register.

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