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Home / Whanganui Chronicle

Kiwis going mobile-only for calls, embracing fibre for broadband

Chris Keall
By Chris Keall
Technology Editor/Senior Business Writer·NZ Herald·
18 Dec, 2018 03:16 AM4 mins to read

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The new home phone. Photo / 123RF

The new home phone. Photo / 123RF

Asking someone for their home number is becoming a thing of the past.

Some 40 per cent of households have gone mobile-only no longer have a landline - at least one used for voice calls.

That's one of the findings of the Commerce Commission's latest annual report into the state of the telecommunications market.

Not everything is rosy. The watchdog currently has an investigation underway to assess if there is enough competition in the mobile market, and a special focus on retail telecommunications - particularly in areas such as marketing and sales and service practices (the subject of recent ComCom legal action against Spark for over-charging and Vodafone for alleged "FibreX" misrepresentation).

The ComCom recently noted that telecommunications was the most complained-about industry.

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But overall the watchdog finds the market is in pretty good health in terms of the features on offer and how they're priced.

For starters, while it's been painful at times getting to this point - and life remains apparently miserable for staff at many broadband contractors - Ultrafast Broadband (UFB) fibre is taking off.

The report shows that as of September 30, there were 668,850 households and businesses connected to fibre, an increase of 45 per cent from 2017.

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Meanwhile, copper connections dropped 19 per cent to 755,000 over the same period.

Copper connections make up 46 per cent of all fixed broadband connections, while fibre is now at 40 per cent.

Just under half of people within reach of UFB fibre have now chosen to connect. The rollout - now more than three-quarters complete - will cover 85 per cent of households by the end of 2020.

"This year is a tipping point in favour of fibre broadband as New Zealanders continue to transition from the old copper network to fibre networks capable of delivering much faster speeds. We expect this trend to accelerate, with 1.4 million households and businesses now able to connect to fibre," Telecommunications Commissioner Dr Stephen Gale said.

All graphics sourced from the Commerce Commission's Annual Telecommunications Monitoring Report 2018.
All graphics sourced from the Commerce Commission's Annual Telecommunications Monitoring Report 2018.

The vast majority (71 per cent) of households are now on unlimited data plans - a huge shift since 2015 when it was just 33 per cent. Streaming video services like Netflix and Lightbox have fuelled demand, and UFB fibre has helped meet it.

Mobile and landline data use is increasing exponentially, and looks set to surge again in 2019 as both Freeview and Sky TV release Android-powered pucks for watching internet-delivered channels on a regular TV, no aerial or dish required on your roof.

And while UFB fibre is great for cloud computing in business, Chorus stats show usage is heaviest in the evenings as people hit Netflix and other streaming services (scroll down for a usage chart).

Network upgrades and more generous data caps helped the surge in mobile data use. So did the introduction of unlimited data plans - although the ComCom is also investigating whether they can truly be marketed as unlimited given throttling and other limitations.

All graphics sourced from the Commerce Commission's Annual Telecommunications Monitoring Report 2018.
All graphics sourced from the Commerce Commission's Annual Telecommunications Monitoring Report 2018.

In terms of pricing, the good news is that most mobile and landline broadband services are now cheaper than in 2017.

The bad news is that, in most cases, we're not getting as much bang for our buck as Australians.

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"Higher-use mobile plans have shown big price decreases. Of particular interest, a high use plan with 300 calls and 5GB of data is $35 cheaper than in 2017. However, this is still more expensive than the comparable plan in Australia," Gale said.

For low, medium and high-user broadband customers, we're now slightly cheaper than the OECD average (see tables below).

Market share was relatively static across landline and mobile, though in the former the watchdog notes that smaller players (2degrees, Trustpower and "other") gained from 16 per cent share in 2017 to a collective 18 per cent this year.

Beyond copper's fall and fibre's surge, the major trend has been a jump in fixed wireless service (mainly form Spark), which sees a 4G mobile network used to deliver broadband into a home.
Beyond copper's fall and fibre's surge, the major trend has been a jump in fixed wireless service (mainly form Spark), which sees a 4G mobile network used to deliver broadband into a home.
The big two dropped back slightly as the smaller players gain a couple of points of share during 2018 (Vocus has Orcon, Slingshot and Flip in its stable).
The big two dropped back slightly as the smaller players gain a couple of points of share during 2018 (Vocus has Orcon, Slingshot and Flip in its stable).
While broadband plans haven't got a lot cheaper, we're not getting a lot more data - in most houses, unlimited amounts - for our money. Netflix is fueling demand and UFB fibre is filling it.
While broadband plans haven't got a lot cheaper, we're not getting a lot more data - in most houses, unlimited amounts - for our money. Netflix is fueling demand and UFB fibre is filling it.
Mobile market share remained static. While Vodafone has a big lead in total mobile connections, it's neck-and-neck with Spark for mobile revenue due to Spark having more customers on contract.
Mobile market share remained static. While Vodafone has a big lead in total mobile connections, it's neck-and-neck with Spark for mobile revenue due to Spark having more customers on contract.
The arrival of UFB fibre plans, coupled with the trend toward unlimited data, has enabled demand for streaming video, dramatically increasing the average household's data use.
The arrival of UFB fibre plans, coupled with the trend toward unlimited data, has enabled demand for streaming video, dramatically increasing the average household's data use.
Broadband data use surges in the early evening as people fire up Netflix, Lightbox and other streaming video services. Dark green = Nov 17, light green = Nov 18. Image / Chorus.
Broadband data use surges in the early evening as people fire up Netflix, Lightbox and other streaming video services. Dark green = Nov 17, light green = Nov 18. Image / Chorus.
Mobile data use has also spiked as mobile networks have been upgraded and data caps made more generous.
Mobile data use has also spiked as mobile networks have been upgraded and data caps made more generous.
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