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NZ telco revenue falls by NZ$60m over 2015

The ComCom has attributed rises in data usage and falls in online piracy to the launch of video-streaming services during 2015.
Written by Corinne Reichert, Contributor

The New Zealand Commerce Commission has released its annual telecommunications report, revealing that total retail telco revenue for the country was again down, from NZ$5.17 billion to NZ$5.11 billion.

The Annual Telecommunications Monitoring Report 2015, published on Thursday, also showed mobile revenue catching up with fixed-line revenue.

"Mobile revenue and fixed-line revenue also appear to be crossing over, with mobile revenue hitting NZ$2.54 billion in 2015 while fixed-line revenues fell to NZ$2.57 billion, meaning total retail telecommunications revenues fell a little to NZ$5.11 billion," the report says.

As of the end of December, New Zealand had 1.86 million total fixed lines, up slightly from the 1.85 million reported the year before, while total fixed broadband connections numbered 1.45 million, up from 1.39 million. Mobile connections reached 5.6 million, 300,000 more than in 2014.

New Zealand had an average fixed-line broadband speed of 9.3Mbps over the year, up by 2Mbps from last year's 7.3Mbps.

Total telco investment over the year reached NZ$1.77 billion, up from last year's NZ$1.69 billion, which the ComCom attributed to spending related to the New Zealand government's Ultra-Fast Broadband (UFB) infrastructure project. The project is providing minimum speeds of 100Mbps up/50Mbps down to 80 percent of the population, with the remaining 20 percent to be connected to wireless mobile broadband under the Rural Broadband Initiative (RBI), which will provide download speeds of 50Mbps by 2020.

"The UFB fibre network rollout continued to underpin a high level of investment by the telecommunications industry, now connecting around 100,000 customers," the report says.

"There was also significant investment in 4G mobile spectrum. As a result, industry investment for 2015 was up on the prior year to reach a new record of NZ$1.77 billion."

The explosion in video-streaming services such as Netflix led to network investment by retailers in order to deal with the growing use of data, the New Zealand regulator explained.

"New video-streaming services took off in popularity from March 2015, with various retailers and Chorus reporting significant increases in data traffic. However, it also became clear from monitoring by TrueNet and disclosure from retailers that the extra traffic noticeably slowed some broadband services at peak times. Extra investment in capacity by retailers helped to largely resolve the issue by the last quarter of the year," the ComCom wrote.

The ComCom also said the availability of streaming services was to thank for the widespread drop-off in online copyright infringement.

"The rise of paid streaming services in the New Zealand market saw a corresponding decrease in peer-to-peer file sharing, according to CallPlus' traffic data," it said.

"Its statistics showed that BitTorrent traffic was dropping at the same rate that paid streaming was increasing, which, to them, indicated that people were trading piracy for paid streaming."

Streaming was also one of the main causes of data usage jumping by a substantial 16GB per month on average over the 12-month period.

"Average download speeds increased, and average data consumed per fixed connection increased significantly, helped by the growth in video streaming, to reach 48GB per month, up from 32GB in the prior year," it said.

"Mobile data use also continued to grow very strongly, up 70 percent in 2015 over the prior year to reach 390MB per connection per month, with a very high proportion of mobile phones being used to access the internet."

The ComCom reported Vodafone's 4G coverage as reaching around 90 percent of the population by the end of the year, the same amount as Spark, with 2degrees covering 70 percent of the New Zealand population with its 4G network.

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