Telecommunications levy shows stable market with emerging players

In this edition:

• ComCom releases 2024-25 TDL contributions table
• Product disclosure guidelines
• TCF starts multilingual 3G shutdown campaign
• Infratil buys more of Contact Energy

Top four telcos continue to dominate

The Commerce Commission has released its draft telecommunications levy determination for 2024/25.

While the document has an important part to play raising funds to pay for non-commercial public interest projects, it also serves as an industry snapshot.

In that role it shows an industry structure that is largely stable. The top four providers, Spark, One NZ, Chorus and 2degrees account for around 82 percent of total qualified revenue — essentially a measure of how much each company earns from providing telecommunications services.

That figure has barely changed from a year ago.

Spark remains the single largest TDL contributor, which has been the case for every year since the levy was introduced. However, at 27 percent of the total, it is far less dominant than in 2014 when its share was 48 percent. Last year it was at 28.97 percent. Spark had a poor year.

The other notable change is SpaceX, which climbed from a 1.5 percent contribution to a 2 percent share of the total in the past year. This represents rapid market share growth for the low earth orbit satellite operator.

Over the past year the total TDL has climbed from $11.9 million to $12.3 million thanks to a 3.3 Consumer Price Index inflation adjustment.

There are two new names in the TDL list: Southern Cross group and Symbio.

MyRepublic dropped out of the list after it sold its broadband business to 2degrees in a market consolidation move. This showed up as 2degrees’ share edged up from 13.15 percent to 13.57.

Todd Corporation, which trades as Megatel and Nova Energy, didn't just fall below the threshold - it went through a fundamental business model change when the company sold its network infrastructure to become a "pure reseller" no longer owning any Public Telecommunications Network (PTN) components.

Product disclosure guidelines to show average monthly costs

As foreshadowed last week, the Commerce Commission has released product disclosure guidelines that, among other matters, requires mobile companies to show customers the monthly cost of their plans.

Currently, Spark and One NZ advertise 28-day plans that require customers to pay 13 times a year. Many customers find these hard to compare with monthly plans.

Likewise plans with generous sounding initial offers can turn out to be more expensive than they appear.

The Commerce Commission says the new requirement applies only when the monthly average price differs from the advertised price. It says this allows providers to continue innovating on pricing or discount structures while making it easier for consumers to compare different offers.

Telecommunications Commissioner, Tristan Gilbertson, says: “We’re cutting through the marketing confusion by helping consumers understand the true cost of different offers from telecommunications providers. We want Kiwis to be able to compare offers more easily and avoid any surprise.”

Early termination fees are also in the firing line. Under the guidelines customers will be told when they apply and how much it will cost before they sign up.

The guidelines require early termination fees to be prominently disclosed up-front and to reduce over the period of the contract. Providers must also ensure their customers can easily find out how much is left to pay at any point in time.

Multilingual TCF campaign as 3G shutdown nears

A series of fact sheets published in 10 different languages is the NZ Telecommunications Forum’s latest initiative to smooth the path to a 3G network shutdown.

There are fewer than ten weeks until the mobile carriers begin closing their 3G networks. TCF chief executive Paul Brislen says the updated resource toolkit aims to help the most vulnerable communities through the transition.

The information is now available in te reo Māori and New Zealand Sign Language as well as Samoan, Tongan, Chinese, Japanese, Korean, Hindi, Arabic and Spanish.

For those who need more help, Brislen says: ”Mobile operators have teams of knowledgeable staff ready and waiting to assist with technical updates and affordable device options for customers who may need extra assistance. But the first step is ensuring everyone knows whether they need to take any action.”

While the message about phones is getting out there, there could be less awareness of the non-phone devices that rely on 3G networks.

"Vendors have been working through an upgrade programme directly with mobile operators, to ensure key devices such as medical alarms have been upgraded in time to ensure vulnerable consumers remain connected in case of an emergency.”

Infratil increases Contact Energy investment

Infratil is to buy a further 4.92 percent of Contact Energy. The move will see Infratil's Contact shareholding rise from 9.4 to 14.3 percent. The company acquired its initial stake when Contact merged with Manawa Energy earlier this year.

As the owner of One NZ, Infratil is a major player in the New Zealand telecommunications market. Contact Energy is the nation’s fifth largest broadband provider with around seven percent of the market according to the latest Commerce Commission monitoring report. One NZ is the third largest player with 19 percent of the market.

In other news...

• New Zealand’s fintechs are positive about regulations — Interest.
• Drones from a Mount Maunganui firm protect submarine cables — RNZ.
• Labour’s rebate policy aims to stop gaming companies heading overseas — Newsroom

NZ Compare Awards now open for entries, people choice votes

This year’s NZ Compare Awards are now open for entries. The awards started out covering the broadband and mobile sectors but have since expanded to take in energy retailers and the wider business world.

There are eight broadband categories, four for mobile and three for power.

The Making a Difference award is open to companies, organisations, even individuals from any sector. It is awarded for “making a difference within their industry, community, people, staff or peers through leading positive change, improvements and inspiring others to follow their example”.

NZ Compare has opened the voting for the People’s Choice Awards in broadband, mobile and power.

I’m on the judging panel along with Craig Young from Tuanz and Elysa Fenenbock, an innovation strategist and educator at Stanford University. She is the second Edmund Hillary Fellow to join the judging team alongside Matthew Jackson, commercial director of Alimentary Systems.

Other judges are Anna Carrick, Data Services GM at Bluecurrent; UBS executive director Phil Campbell; Nicole Crump who is a growth specialist for Zib Digital, Movinghub MD Jess Henderson; Bronwyn Scott the kaupapa lead at DECA; Alex Grace CTO and Gavin Male CEO of NZ Compare.

150 million 5G FWB subscriptions by 2030

Research company Omdia (formerly Canalys) says the worldwide number of 5G fixed wireless broadband subscriptions will double between now and 2030. There were around 74 million subscribers in 2024. Researchers say this will hit 150 million by 2030.

It says fixed wireless is the fastest-growing broadband access technology and numbers are climbing fast in large markets such as India and the USA.

The report identifies quality of experience as a critical differentiator in 5G FWA offerings. It says service providers are increasingly upselling based on service reliability, latency and user-specific performance - particularly for gamers, remote workers, and video streamers - rather than relying solely on speed.

This time last year Deloitte published its fibre report

The professional services firm found fibre contributed $31 billion to New Zealand’s between 2011 and 2023. It grew the economy by $8.8 billion in 2023. Deloitte says it could add a further $163 billion over the next ten years.

Five years ago the TDL was the top story, after the total levy payable dropped from $50 million to $10 million. Then, as now, Spark was the largest contributor.

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