Data demand doubles as Kiwis consume 4000 TB per annum

Data demand doubles as Kiwis consume 4000 TB per annum

Demand for mobile data in New Zealand has almost doubled for the second year in a row, as the cost of data decreases and the number of smartphones in Kiwi hands increase.

According to the Commerce Commission's telecommunication monitoring report, New Zealanders purchased a combined 4000 TB (1 TB = 1024 GB) of data in the 2011/2012 reporting period. In the year prior the price of data dropped from around 12 cents per MB to 9 cents. ComCom says fixed line data has also doubled to 19 GB per month per subscriber.

Despite skyrocketing data consumption telco revenue has only maintained a modest growth,  with mobile retail revenue across the industry in 2011/12  growing by 11 percent from the previous year.

“Total retail telecommunications revenues rose slightly in the last two years to reach $5.22 billion in 2011/12 after several years of minimal growth. Revenue growth has tended to be well behind inflation, so, with increasing data use, consumers are getting more for their money,” says telecommunications commissioner Stephen Gale.

Telecommunications Users Association of New Zealand chief executive Paul Brislen says competition from 2degrees has prompted Telecom and Vodafone to be considerate of its pricing.

"2degrees introduced roll over data and shared data ... things the other telcos just weren't interested in, at least on the consumer level. Now we're seeing Telecom and Vodafone react accordingly in the fear of losing customers," he says.

The stagnant revenue growth has prompted the country's largest telco Telecom to cut costs and consider new products to monetise, which has resulted in the Digital Ventures initiative and this week the purchase of datacentre provider Revera.

"Simon Moutter [Telecom CEO] is quite clear that he wants to grow into the managed services space. Basically come up with new things customers want to replace some of the things that are disappearing like TXT messages and eventually voice," says Brislen.

"Telecom is doing it the right way by looking for value added propositions. I think we'll see more of it in the near future."

Key findings of Commerce Commission's latest telco monitoring report:

• Fixed broadband connections continued to grow, reaching 1.24 million in 2011/12. This pushes broadband penetration to around 78% of New Zealand households that have a fixed line connection
• Landline and mobile calling minutes and calling revenue figures showed a modest decline as people continue to use alternatives like texting and social media networks in favour of making a call
• Telecommunications investment picked up a little to $1.26 billion after peaking at $1.69 billion in 2008/09
• Naked broadband services (where fixed line broadband is provided without a conventional voice service) have continued to grow in popularity driven by availability of competitively priced fixed line broadband and VoIP services, and the falling price of mobile voice services
• Investment by Chorus and other local fibre companies is increasing as they work to meet ultra-fast broadband commitments to provide fibre-to-the-home networks in much of the country, however the full financial impact of their investment in the project is yet to be seen
• The three biggest players in the mobile market moved closer in terms of market share this year. On a connections basis Vodafone had 42% of the market, Telecom 37% and 2degrees 20% as at 30 June 2012, with smaller mobile resellers making up the remaining 1%