Background
Composition of Telecommunications Service Sector
112. This chart shows the current estimated market shares by revenue for the three main telecommunication services categories:38 fixed telephone network services; data services; and mobile services. Data services39 can not at present be benchmarked because reliable information on New Zealand and other OECD countries' data services prices is not available.
Current Estimated Market Shares by Revenue
Fixed Telephone Network Services
113. The key traditional fixed telephone network services are residential telephone service, business telephone service, both of which include local and national calls, fixed to mobile calls and international calls. It is estimated that these key fixed network services comprise between 45-50% of the total telecommunication services market by revenue. The key features of these services are the maturity of the technology used to provide them and the relatively large number of facilities based competitors in the long distance calls market.
Cellular Services
114. The cellular telephone services market is estimated to comprise about 25-30% of the total telecommunication services market by revenue. This is a relatively young market that in New Zealand has grown rapidly over the last six to ten years. Cellular services are provided currently by two providers of roughly equal size.
Broadband Services
115. It is estimated that the emerging broadband Internet access services market (part of the data services market) presently comprises about 1% of the total telecommunication services market by revenue. This market is considered to be strategically very important as affordable higher speed Internet access will progressively provide residential and business telecommunication users with new and improved services such as faster access to web-based information sources, voice over IP based call services, e-commerce, e-learning and tele-working opportunities, web-based alarm monitoring, telemedicine, distance learning, services for people with disabilities, community networking etc.
Leased Lines
116. The leased line market is estimated to comprise around 20% of the total telecommunications market. It is a market in which there is competition in particular areas, such as central business districts (CBDs) and between larger population centres. However, where circuits are terminated outside major CBDs or larger population centres there is usually limited competition. This may explain why New Zealand's performance for 2 Mbps CBR service is better than the performance for 64 kbps CBR service. 2 Mbps CBR services tend to be used on backbone links between major corporate sites which frequently terminate in CBDs, whereas 64 kbps CBR services are generally used to connect outlying offices in provincial or suburban areas where there is usually little alternative infrastructure.
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