New Zealand tech spending is set to climb ten percent in 2022 – Amazon moves on LEO satellite network plans.
Gartner: IT spending to hit NZ$15.9 billion this year
Gartner’s latest forecast for the New Zealand information technology sector projects spending to reach NZ$15.9 billion in 2022. That’s up almost ten (9.7) percent on last year.
IT Services will be the largest spending category, accounting for $4.6 billion. It will up ten percent from $4.2 billion in 2021.
Until last year, Communications Services was the largest sector, but it has experienced low growth relative to the wider IT sector in recent years. Gartner forecasts a 2.4 percent rise in 2022 taking the total to $4.3 billion.
Software will be the fastest growing sector. Gartner forecasts spending will increase 15 percent to $3.7 billion.
In 2021, New Zealand spending on information technology climbed 9.7 percent which was in line with worldwide growth of 9.5 percent. This year spending here will rise by the same amount, 9.7 percent, while growth in the worldwide spend will fall back to four percent.
Gartner says the war in Ukraine is not expected to have a direct impact on worldwide IT spending. The areas of activity that are seeing the clearest international growth include analytics, cloud computing, security and creating a seamless customer experience.
New Zealand IT Spending Forecast (Millions of New Zealand Dollars)
Data Center Systems
Source: Gartner (April 2022)
Amazon readies Project Kuiper LEO satellite launches
Amazon has signed agreements with three aerospace companies as prepares to launch its constellation of 3236 LEO satellites.
Project Kuiper is Amazon’s plan to deliver fast, affordable broadband to rural areas underserved by existing networks. A document on Amazon’s website suggests the network will focus on customers in the US.
The network is running about four years behind its rival SpaceX and its Starlink service. That started commercial operations last year and now serves customers in rural New Zealand.
Although there are plans for other LEO networks, they will be even further behind. SpaceX has its own launch capacity and an ability to launch more often than any other space company.
Project Kuiper has earmarked almost all remaining non-SpaceX launch capacity for the next three or four years leaving any rival with limited options to get satellites into orbit. One potential LEO operator, OneWeb, has a launch agreement with SpaceX.
Amazon says it will have two prototype satellites in orbit later this year. It will talk about operational dates after testing its technology.
Aussie regulator examines mobile tower sell-offs
Later this year The Australian Competition and Consumer Commission will hold two consultations on that country’s mobile tower market. The watchdog will examine how a change of tower ownership alters access questions. While Australia is further along the path of tower sell-offs than New Zealand, the ACCC’s move hints at issues the Commerce Commission may consider examining in the future.
Trustpower retail business to join Mercury Energy in May
In a statement to the NZX, Trustpower says it has now met all the substantial conditions for the sale of its retail operation including the telecoms business to Mercury Energy. It expects settlement to take place on May 1. The retail operation has around 234,000 customers.
Worldwide telecom capex boom is slowing
Dell’Oro Group’s latest report says there are signs the boom in telecommunications capex for both wireless and fixed line networks is coming to an end. Last year saw a nine percent year on year growth compared with the previous year. In 2022 the report forecasts capex will increase three percent before “tapering off” in 2023 and 2024.
In other news…
IDC reports spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 13.5 percent year over year in the fourth quarter of 2021.
It doesn’t sound plausible, but US investment bank Piper Sandler says 72 percent of US teens own Apple AirPods. The same report claims 87 percent own iPhones and 30 percent have an Apple Watch. It may pay to take that company’s research with a pinch of salt.
The Download 2.0 is a free weekly wrap up of New Zealand telecommunications news stories published every Friday.
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