The New Zealand telecommunications industry is a stable mobile market with 3 network operators, a nationwide full-fibre wholesale broadband network and the overall market underpinned by strong economic fundamentals.
Key developments covered in the New Zealand Telecoms Industry Report:
- Sale of towers of all three operators to pension funds
- Acquisition of My Republic by 2degrees
- Merger of 2Degrees and Orcon (Vocus NZ)
- Acquisition of Trustpower retail customer base by Mercury
- Divestments of passive tower infrastructure by both Spark and Vodafone underway
- UFB project completed and delivering word class broadband speeds nationwide
The publisher forecasts that mobile subscriptions will continue to grow in the 2022-27 period and fixed broadband subscribers will also continue to grow and increase its household penetration over the same period. The ratio of the telecommunications sector revenue to GDP is declining from a peak in 2005, sliding down every year since then.
The publisher forecasts 5G mobile subscribers will represent nearly 80% of all subscriptions by 2030, 4G will represent about 18% of all connections while 6G and 3G will account for the 2% remainder, while 2G and 3G networks will be switched off by 2025. Mobile subscribers numbers and revenue are growing strongly and the back of population growth and the market shift to postpaid.
The publisher expects the overall telecoms market to grow to NZD7.1 billion by 2030 after a marked slowdown in 2020 and 2021 due to legacy voice revenue pressure partially offset by mobile data growth and COVID travel restrictions.
Capex Investments
New Zealand is coming off a Capex hyper-cycle from a peak in 20219 down to NZD1.5 billion by 2022. The Capex to GDP ratio is now decreasing and is expected to remain at the same level through to 2030 at 22%. Chorus is still investing heavily in fibre infrastructure until 2024 while Spark and Vodafone have more conservative investment profiles focusing mainly on 5G.
Mobile Subscribers and Revenue
Over the last five years, the market shifted to postpaid as subscribers move to Pay Monthly offerings (SIM-only plans) with increased data allowances. Overall, the number of prepaid subscribers continued to decrease slightly. Mobile network operators are facing competitive pressure with the market shifting to unlimited voice and text and data allowance increasingly becoming the sole offering differentiator.
According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. New Zealand has the highest pricing per GB and Kiwis downloaded the least amount of data over their mobile phones.
Broadband Subscribers - FTTH Push and Fixed Wireless
The Ultra-Fast Broadband Initiative is a New Zealand Government program of building fiber-to-the-home networks covering 87% of the population by the end of 2022, FTTP is now deployed to 1.8 million households and businesses in 412 cities and towns. It is a public-private partnership of the government with four companies with a total government investment of NZ$2.1 billion.
The broadband market is now experiencing low growth mostly driven by new premises construction in greenfield developments or urban redevelopments. The UFB government project reached over 1.8m premises and connected 71% of them or 1.3m premises.
Household growth and a reduction of the number of underserved premises, previously not able to connect now served by UFB2, will drive up the fixed-broadband subscribers.
Thematics - Telecoms Infrastructure / 5G / M&A / Infrastructure
Infrastructure funds, pension funds, and government funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure.
In 2019, Morrisson & Co (Infratil) and Brookfield, both infrastructure funds, bought Vodafone NZ for NZ$3.4 billion (EV/EBITDA of .c7). Globally, many infrastructure funds are investing in mobile towers, FTTH, data centres, and submarine cables, and that trend is likely to continue over time with more proactive transactions. In 2023, Morrisson & Co (Infratil) purchased Brookfield’s stake to reach full ownership.
In 2022, 2Degrees and Orcon (Vocus NZ) merged to form the third-largest telecommunications provider, it is co-owned by Macquarie and Aware. In just 12 months, all three operators sold their respective towers to pension funds.
The publisher predicts the next wave of transactions is likely to continue being about “scale” among small ISPs and largely about infrastructure for Spark, Vodafone and 2degrees.
The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.
This report provides analyses of revenue and market forecasts as well as statistics of the New Zealand telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, digital infrastructure, and also features the following:
- Overall Telecommunications Market by Major Operators
- Telco Operators Profile, Revenue, and EBITDA Mix
- Mobile Subscribers & Revenue Market Overview and Forecasts
- Spectrum Holdings
- IoT Market Overview
- Broadband Subscribers & Revenue Market Overview and Forecasts
- Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
- National Broadband Network Detailed Market Overview and Forecasts
- Telecom Tower Market Analysis and Forecast
- Thematics / Opportunities relating to 5G, M&A, and e-Commerce
- Telco M&A Transaction Database
- Benefit from the latest market opportunities
- Understand the threats to your operations and investments and protect your company against future risks
- Gain insight into emerging trends that could support, strengthen or disrupt your activities in the market
- Get a full view of the competitive landscape to assess your market position.
- Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
- Target business opportunities and risks in the telecoms sector through our reviews of the latest industry trends, regulatory changes, and major deals, projects, and investments
- Assess the activities, strategy, and market position of your competitors, partners, and clients via our Operator's Profiles
Table of Contents
Samples
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Companies Mentioned
- 2degrees
- Brookfield
- Crown Infrastructure Partner
- Connexa
- Crown Fibre Holding
- Chorus
- Enable Networks
- Mercury
- Northpower
- One NZ
- Telecom NZ
- Infratil
- Snap
- Spark
- TelstraClear
- Trustpower
- Tuatahi First Fibre
- Ultra-Fast Fibre
- Vocus
- Vodafone
- WEL Networks
Methodology
The publisher uses primary and secondary research as well as proprietary information sources to generate market analysis and forecasts for fixed and mobile services in terms of both subscribers and revenue. Interviews are conducted with key service providers in the region to determine current and potential market sizing as well as future service offerings. Information gathered through interviews is further cross-checked to validate the total market size.
The primary research is supplemented with a range of secondary source material, including related research, press releases, securities filings, media, Web-based materials, and trade publications.
Industry and population statistics are also leveraged for reference and to ensure consistency in the data collection. Extensive service provider primary and secondary research, together with the publisher's end-user research database, provides a strong basis for sizing and forecasting the market. The multiple reference points allow for validation of information provided by the service providers compared with that gathered from alternative sources.
Note: Forecasts are made in local currency, and no allowance is made for inflation. All numbers in this document may not be exact due to rounding.
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