Telcowatch says Vodafone is New Zealand’s mobile market leader.
There’s not much in it. Vodafone is one percent ahead of Spark on 36 percent.
The two were neck and neck for most of last year.
While the lead is real, it’s not dramatic.
Nor is it the whole picture. The way Telcowatch measures the market means that Spark’s Skinny business is counted separately from its parent company.
Adding that back into Spark’s figure puts the company well ahead of Vodafone with a 41 percent market share.
However you crunch the numbers both Spark and Vodafone have a clear lead on 2degrees. The third mobile carrier’s market share is stable at 23 percent. That makes it a little over half the size of Vodafone and Spark.
It probably suits everyone concerned to count Skinny as a seperate business.
Yet Skinny is definitely a Spark brand.
When Skinny started it was more distinct from its parent than it now is.
Today Skinny’s product alignment can be seen as rounding out Spark’s offerings. It’s a no-frills version. In supermarket terms it is PaknSave to Spark’s New World.
The two share the same network infrastructure. Skinny employees may be loyal to the brand, but they are Spark employees. Spark’s management decides Skinny’s strategy.
Skinny remains the smallest of the four brands. In December its market share was 5.6 percent. It has been between roughly five and six percent for the last couple of years.
The most interesting aspect of the recent report from Telcowatch is not the interplay between Spark and Vodafone, but the way Skinny has been growing its market share at the expense of the parent company.
Over the last year Skinny is the best performer in terms of market share growth. It has grown gradually.
It’s not hard to understand why. Despite all the fuss about 5G, the mobile phone market is mature. There’s less differentiation between brands and less of a premium in Spark’s brand when compared to Skinny.
There is, however, a considerable price difference. Slowly, but surely, customers are waking up to this. You can buy what amounts to the same mobile experience for less money. The big surprise is that more people have yet to realise this.
No single bidder will be able to buy more than four blocks in the first auction round. This is less than the 80MHz to 100MHz recommended for full 5G services by the GSMA, an international mobile operator trade association.
The rights are not tradable, are nationwide and buyers must use them for 5G mobile services.
More spectrum later
Licence terms start later this year and finish at the end of October 2022. The government will hold a further, long-term auction for the spectrum that year. The government says it expects to free up more spectrum later.
Bidders in the March auction will have to return existing 3.5GHz management rights to the government.
This affects Vodafone more than any other carrier. It is possible Vodafone’s existing 3.5MHz holding will fall. Returning existing spectrum will help flatten the playing field. There will be a refund for returned management rights.
Radio Spectrum Management, part of the Ministry of Business, Innovation and Employment, will use a simplified version’s of a combinatorial clock auction. In effect, this starts with the seller offering blocks at the reserve price. If the demand for blocks is greater than the supply, it increases the price.
Beyond the three mobile carriers
New Zealand has three existing mobile networks. There are 16 spectrum blocks on sale and each bidder can buy four in the first auction round. That means the government expects a fourth buyer to enter the auction.
This is a departure. The earlier auction for 700 MHz band spectrum was tailored to cater for the three mobile carriers; Spark, Vodafone and 2degrees.
The obvious candidate is Dense Air. The company owns 70 MHz of 2.5 GHz spectrum. At the moment Dense Air acts as a wholesaler to the mobile carriers. Spark’s tiny South Island fixed wireless broadband 5G project uses Dense Air spectrum.
Other parties may be interested in the spectrum. Few of New Zealand’s Wisps1 could afford the $500,000 deposit or the $250,000 per block asking price. Yet if they were to act collectively a bit might be possible.
If the government doesn’t sell all 16 lots in the first auction round, it may offer them to existing bidders.
Given that the amount of spectrum being auctioned is not enough for carriers to offer a full blown 5G service, it looks as if will be some time before New Zealand gets all the benefits of the technology. There’s enough bandwidth for fast data speeds, but, as things stand, maybe not enough for carriers to deliver the gigabit plus speeds 5G hype has promised.
Wisps are small, local wireless internet service providers. They cover rural and remote gaps in markets not served or poorly served by bigger telcos. ↩︎
Every year throws up a long list of news stories, product launches and events. This year was better than most. Here are six 2019 stories that resonated with me. It’s a personal, unordered list and it’s written from a New Zealand perspective. You may have other highlights. Feel free to share them in the comments below.
Apple AirPods Pro
Apple used a busy, noisy Auckland cafe to show off the AirPods Pro. By the time they hit New Zealand there was already an excited buzz about the noise cancelling ear buds. I expected a positive experience.
Even so, the sound quality was surprising. It wasn’t only the active noise cancelling, although that’s impressive enough. The AirPods sound is accurate. It doesn’t seem possible that something so small could sound so good.
Until 2019 it had been a long time since I left a product demonstration with a smile on my face. Then it happened twice in a short period. First with the Apple AirPods Pro, then a second time with the Samsung Galaxy Fold.
The price tag is be north of three grand (NZ$3400). Samsung’s first generation folding phone is a touch more fragile than I’d like. Yet here is the first major breakthrough in handset design since Apple’s first iPhone. Samsung has broken the mould and come up with real innovation.
Samsung’s Galaxy Fold is less a phone, more a small tablet that you can fold and carry in a pocket. You might even see it as a pocket computer. Either way, it is beyond impressive.
When folded it is a long slim phone, a little thicker and heavier than we’ve come to expect. Unfolded it is about the size of an iPad Mini and does much the same job.
Huawei showed its folding phone earlier at Mobile World Congress. A brief look confirmed it was a contender. So far, only one of the two models on show in Barcelona has made it to market in New Zealand.
No doubt there will soon be more, better folding phone designs. I’d love to see what Apple can do with this format: how about an iPhone that morphs into an iPad?
But for now, this is Samsung’s triumph.
Spark Sport, Sky Sport Now
Spark Sport’s Rugby World Cup service came in for flak and some cruel media attention. That’s what you get for interfering with New Zealand’s favourite sporting code.
In my experience the streaming service worked fine during the RWC. I’ve racked up well over a hundred hours with the app. A lot of that was watching Premier League football1.
There have been hiccups, yet it is better experience than the BeIN service it replaced. My only gripe was I enjoyed the preview shows and the run-up coverage before big games on BeIN. Spark offers less of that. Also, half time is not so much fun without pundits.
Spark’s entry into streaming sport services has seen Sky lift its game. The new Sky Sport Now app has 12 channels of sport around the clock.
Sky Sport Now has excellent cricket coverage. It fills the European and international football gaps left by Spark. Most of the time there are enough channels to cover every game. Although there was one Champion’s League round where my team, Chelsea, only showed up as a replay later in the day.
I’m not complaining. The service is excellent. It’s good to see Spark and Sky compete by offering the best customer experience. It would be great if we had more of this kind of competitive tension.
The two streaming sport options are great value. Buying Sky Now and Spark Sport works out less each month than an old-style subscription to Sky’s satellite service. By my reckoning, there’s a broader selection of content to watch. That’s a win.
Deebot Ozmo 900
Robot vacuums aren’t new. The Deebot Ozmo 900 updates the idea. It offers mopping as well as vacuuming. I had low expectations before I saw it in action. It impressed me once we used it. This is the only way to go.
The best part about the Ozmo 900 is that it’s low-slung body can get under beds, cupboards and tables. These are places where manual vacuuming gets hard. Another great aspect is, because it does all the work, you can vacuum more often keeping the house cleaner.
For me one of the clearest signs the original UFB project succeeded is that government found more money to connect another 169 areas. The so-called UFB2 takes coverage to around 85 percent of the country.
Another clear sign of success was Spark’s decision to stream Rugby World Cup coverage.
Next year, Chorus and central North Island fibre company UFF will offer 2Gbps and 4Gbps fibre. We’ve come a long way from ten years ago. Then a 30mbps fibre service looked like the last word in modern data communications.
The Vodafone giant awakes
In recent years it seemed as if Vodafone’s New Zealand operation wasn’t going anywhere. In part this was because the parent company felt it had better things to invest in than the second telco in a small, remote country.
There has also been an investment in customer support. That’s something that was an embarrassment in the past.
These initiatives are important, yet there’s more to the change. It’s as if Vodafone has had a vitamin injection. Now there is an energy to the business that wasn’t there before. It helps that Paris recruited fresh talent to senior positions, but it goes beyond that. It is as if the company has awoken from a slumber.
What it means in practice is that Spark faces greater competitive pressure than it did 18 months ago. Likewise the next tier of telcos; 2degrees, Vocus and so on, are also feeling the heat. Ten years after government restructured the industry we are seeing the competition those moves aimed to unleash.
Six of the biggest tech moments of 2019 are positives. The seventh is also a positive, but it’s a positive that came about because of an horrific negative.
In May Prime Minister Jacinda Ardern spoke at the Christchurch Call summit in Paris. It was a response to the Christchurch mosque shootings. The terrorist shooter filmed his crimes, streaming them online in real time.
The summit attempts to force social media companies to take more responsibity for material they publish. During the year, 48 countries signed an agreement to stop social media publishing terror messages. The US didn’t sign.
It isn’t clear if the initiative will work. Yet it is a first step towards wrestling control of online media away from the murderers and criminals who use it as a weapon. I suspect there is more to do, but the longest of journeys starts with a single step.
It could be more than 200 hours, I’m not counting ↩︎
A year ago it looked like the company would be starved of the resources needed to make a significant 5G splash. That changed when Infratil and Brookfield fund a $3.5 billion split from the UK-based parent company.
100 Vodafone 5G sites open today
Today there are 100 sites. While this sounds good, in practice it means scattered pockets of 5G in a sea of 4G mobile coverage. Vodafone says it will upgrade the 4G sites to 5G-like speeds and increase the number of 5G sites to around 1500 in the next few years.
Performance on Vodafone’s initial network is impressive. This morning social media was full of screen shots showing handsets downloading at speeds of around 500mbps. Actually the screen shots showed download test sites, which amounts to the same thing.
“We’re using 3.5GHz spectrum to launch 5G, and our current radio spectrum holdings will mean that Vodafone customers see an uplift of up to 10 times current 4G speeds.
“However to reach the one gigabit speeds that we’re seeing internationally, we’ll need approximately 100MHz of 3.5GHz spectrum so will continue to work with the government on the early allocation and auction processes.”
It’s worth remembering today’s 5G is uncluttered. There’s almost no-one using it. That’s going to help early performance. The technology should cope better than 4G with lots of traffic, but we’re months away from that happening.
New 5G handset needed
You can’t just walk into a 5G zone and get high speed mobile broadband. You need to buy an expensive new handset first. There are two models at the moment. Both are from Samsung and both are Android models. If you can live with Android you’ll be good to go.
If other 5G equipped phones from other brands are on the way to New Zealand, the companies making them are keeping quiet about it. Realistically there won’t be a wide choice, and certainly not suitable iPhones until at least this time next year.
Premium price for Vodafone 5G
By then Vodafone will charge a premium for 5G network access. The company says suitably equipped customers can use the 5G network at no extra cost until the end of June. From then they will need to pay an extra $10 a month for the service.
This echoes what happened in the early days of 4G. Although the premium didn’t last long once competition kicked in. This time Vodafone has at least six months start on its competitors, maybe much longer.
It may have been reasonable to ask 4G users to pay a premium, they got a noticeable performance upgrade. The practical benefits of upgrading to 5G will be less obvious to most phone customers.
Yes, they will see faster speeds. Videos will download faster. On paper you can browse faster.
Yet there are no practical mobile applications for ordinary users that need extra speed. Not yet. 4G mobile has plenty of bandwidth to watch high resolution video on a handheld device. And when was the last time you hit a bottleneck browsing on 4G?
Gamers may find something worth paying a premium for. They won’t see higher resolution, but they should see lower latency from using 5G.
That’s good, but $10 a month just to get a better gaming response seems a bit steep for all but the most hard-core gamers.
Unlike 4G, most of the benefit of 5G goes to Vodafone and its enterprise customers. The technology means many more paying customers can use cellular at the same time, which gives Vodafone an opportunity to sell more. It also gives the company shiny new things to sell, like network slices and internet-of-things services.
In that sense charging mobile users a premium is like asking supermarket shoppers to pay more because a new Pak’n Save is opening down the road.
If Vodafone is going to get non-business customers to upgrade their mobile and pay more, it needs a better reason than fast. Phones already do fast-enough with 4G.
Spark’s handful of South Island fixed wireless sites pales in comparison. ↩︎
If Vodafone is about to dive headlong into the pool, Spark dipped a toe in the shallow end.
When it launches Vodafone will have over 100 5G towers in parts of the three biggest cities and in Queenstown. Spark’s network is restricted to what it calls heartland communities.
This is code for small South Island towns. More precisely; Alexandra, Westport, Clyde, Twizel, Tekapo and Hokitika. Collectively the population of these places is around 16,000.
That is about one-third of one percent of New Zealand’s population.
Vodafone won’t have city-wide coverage in its launch cities. Even so, its network could cover getting on for half the population. Even a pessimistic look at the numbers suggests Vodafone will reach 100 times as many potential 5G customers as Spark.
That’s not all. Spark’s network only offers fixed wireless broadband. While fixed wireless might suit some people, most people would see it as a second rate alternative to fibre.
Tekapo and Clyde don’t have fibre, the other places do.
Not preferred 5G spectrum
There’s another angle to this. Spark’s network will use 2600MHz spectrum. The company says this is not its preferred 5G spectrum. Spark doesn’t own the spectrum, it belongs to Dense Air.
The number of commercial Spark 5G heartland community customers for the next few months will be measured in hundreds, not thousands. Vodafone probably expects to sign more customers in a single day.
Spark does also have 5G around parts of Auckland Harbour for the America’s Cup racers. But that’s a private network.
Fate has been cruel to Spark’s 5G ambition. Spark’s plan to show 5G leadership have been hit by three external forces.
Of course the idea carriers are jockeying to win a 5G race is ridiculous. The technology will be around for 10 years. Getting it right is more important than getting it first. Few customers will jump ship just because they have to wait a few months.
While there may be a small first mover advantage, the real winner will be the carrier that can make its network pay over the long haul.