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• 3. Key Statistics

• Telecommunications

• Archive

• NZ Telecoms Updates

• NZ Telecoms 1987-1998
• NZ Telecoms 1987-2000
• NZ Telecoms 1987-2001

• 3.1 Service Demand
• 3.2 Industry Operational Efficiency
• 3.3 International Comparisons Statistics
• 3.3.1 OECD Basket Comparisons of Residential and Business Telephone Service Charges
• 3.3.2 OECD Basket of Mobile Service Tariff Comparisons
• 3.3.3 OECD Basket of Leased Line Tariff Comparisons
• 3.4 New Zealand Telecommunications Consumer Price Indexes
• 3.5 Telecommunications Capital Expenditure Statistics
• 3.6 Interconnection
• 3.6.1 Brief Summary of Main Interconnection Charges in New Zealand
• 3.6.1.1 Typical Toll Bypass Interconnection Charges
• 3.6.1.2 Typical Local Telephone Call Interconnection Charges
• 3.6.1.3 Telephone Number Portability Charges
• 3.6.1.4 Calling Party Number Information (CPNI) Charge
• 3.6.2 List of Interconnect Agreements
• 3.7 Pricing and Tariffs
• 3.7.1 Local Telephone Service Pricing and Service Availability
• 3.7.1.1 Business Telephone Service
• 3.7.1.2 Residential Telephone Service
• 3.7.2 National (Toll) Call Pricing
• 3.7.2.1 Telecom Standard Residential Direct Dial National Call Rates (GST exclusive)
• 3.7.2.2 WorldxChange Basic Residential Tariff Structure
• 3.7.3 Cellular Tariffs
• 3.7.4 International Tariffs
• 3.8 Telecom's Kiwi Share Obligations
• 3.9 Residential Telephone Service Quality Indicators

32. This section details statistical information on the New Zealand telecommunications services industry performance in tabular and graphical form. It is updated periodically when more up to date information is available. It is important to note that some data is not readily comparable with similar information from other countries and that some information is only available for one or a small number of carriers and may not be representative of the telecommunications services sector as a whole.

3.1 Service Demand

33. Summary data on total telephone line connections, cellular connections, national call minute volumes and international call minute volumes.

Public Switched Telephone Network Main Lines⁵

*estimated or from public statements

Cellular Connections⁷

* Newspaper reports

National Call Minute Volumes⁸

* Excludes calls from Telecom fixed network to Vodafone's cellular network

International Outward Call Minute Volumes⁹

3.2 Industry Operational Efficiency

34. Telecom has progressively improved its efficiency measured in terms of lines per operating company employee and a range of other indicators (see below), as follows:

3.3 International Comparisons Statistics

35. The OECD has established a methodology for comparing residential telephone service charges, business service charges, data circuit charges, cellular charges and a number of other services tariffs. The methodology is based on costing out a representative basket of component services and quantities, such as installation, access and call usage, in specified amounts, in each country's currency, and then converting to a common base via the use of 'purchasing power parity exchange rates¹⁵ (PPP). While there is scope to argue that the methodology may not properly be representative of users actual cost structures and that the use of PPP exchange rates is problematic, the method never-the-less allows direct comparisons of typical telecommunications services costs between countries.

3.3.1 OECD Basket Comparisons of Residential and Business Telephone Service Charges

36. The following charts show the comparative ranking of residential and business telephone services tariffs for OECD countries, based on the OECD tariff basket model. New Zealand is ranked 14^th in residential and 15^th in business, out of 29 countries.

Note: The OECD model was rerun to include the latest business national call rates.

3.3.2 OECD Basket of Mobile Service Tariff Comparisons

37. The following chart shows the comparative ranking of mobile telephone tariffs for OECD countries based on the OECD mobile tariff basket model. New Zealand is 9^th out of 24 countries. Note: The New Zealand result is based on a tariff option which includes 200 minutes of free air time per month (the OECD model call basket comprises some 2100 calls per annum).

3.3.3 OECD Basket of Leased Line Tariff Comparisons

38. The following chart shows the comparative ranking of leased line tariffs for OECD countries based on the OECD leased circuit line combined services basket model.

3.4 New Zealand Telecommunications Consumer Price Indexes

39. Statistics New Zealand residential telephone services consumer price index changes (in real terms) are shown in the graph below. This index comprises a basket of the following services: residential local telephone service including an installation component, national and international calls.

40. Notable features are:

• Long distance call prices have declined significantly. Since the establishment of long distance calls competition in March 1991, real prices have reduced on average by some 9% per annum (pa). In recent times it is apparent that price reductions are increasing. Over the last two years the average real price has reduced by about 14.5% pa which can probably be attributed to substantial entry in that time (at least five new nation wide service providers entered);
• The price of residential local telephone service and long distance calls declined on average by about 3.6% pa;
• The data indicates that the average real telephone access line rental and installation costs increased slightly but has declined progressively since late 1993.

(However, it should be noted that the real price of standard residential telephone service has not exceeded the November 1989 level, as required by Telecom's Kiwi Share obligations.)

3.5 Telecommunications Capital Expenditure Statistics

41. The graph below shows Telecom's real average investment per telephone access line per annum on a relative basis. The base year for comparison is the financial year ended March 1988.

42. Telecom substantially updated many aspects of its core network infrastructure and associated services in the early 1990s. In recent times Telecom has invested substantially in expansion of its cellular network, information systems to support improved services and reduce operational costs, internet service access and cable TV roll out (now discontinued).

3.6 Interconnection

3.6.1 Brief Summary of Main Interconnection Charges in New Zealand

(Note: All charges are GST exclusive)

3.6.1.1 Typical Toll Bypass Interconnection Charges

• Telecom Charges for providing Toll Bypass service to Other Service Providers
  
  Call origination and call termination (to and from the local point of interconnection)
  
  2.8 cents per minute or part of a minute (c/m) - peak (7am to 10pm everyday)
  
  1.3 c/m - off-peak (10pm to 7am everyday).
  
  Automatic Number Information (ANI)
  
  1 cent for ANI supplied.
  
• Other Interconnection Charge Options
  
  Interconnection with Telecom's network for national call origination and termination. The following charges apply in some cases.

• Other Network Service Providers Typical Charges For Providing Toll Bypass service to Telecom
  
  Call origination and call termination (to and from the local point of interconnection)
  
  2.8 cents per minute or part of a minute (c/m) - peak (7am to 10pm everyday)
  
  1.3 c/m - off-peak (10pm to 7am everyday).
  
  Automatic Number Information (ANI)
  
  1 cent for ANI supplied.

3.6.1.2 Typical Local Telephone Call Interconnection Charges

• Telecom charges for providing local telephone call interconnection service to Other service providers
  
  2.0 cents per minute or part of a minute (c/m)- peak, everyday 7am - 10 pm
  
  0.5 cents per minute or part of a minute (c/m)- off-peak, everyday 10pm - 7am
  
  Additional charge for each call, 1.0 cents per minute or part of a minute (c/m)
  
• Other Interconnect Service Providers charges for providing local telephone call interconnection service to Telecom
  

Note: Some interconnect agreements are for shorter terms, i.e. less than 5 years.

(Peak period - everyday 7am - 10 pm, off-peak everyday 10pm - 7am)

3.6.1.3 Telephone Number Portability Charges

Set-up fee $17.50

Call conveyance fee for calls to numbers ported between networks, 0.5 cents per minute or part of a minute. (This is additional to any call interconnection charges).

3.6.1.4 Calling Party Number Information (CPNI) Charge

1 cent for CPNI supplied.

3.6.2 List of Interconnect Agreements

43. The following table lists all the significant telecommunications network interconnect agreements or in cases where no interconnect agreement was required the market entry date, from 1991 to December1998:

PSTN= Public Switched Telephone Network; TNZ=Telecom New Zealand; BS=BellSouth; C=Clear;

<= => to and from; => one way.

44. Copies of Telecom's interconnection agreements are available from Telecom New Zealand. These are required to be made publicly available under the Telecommunications (Disclosure) Regulations 1990. Interconnection agreements between other carriers are not required to be disclosed.

3.7 Pricing and Tariffs

45. This section provides examples of pricing for some key telecommunications services in New Zealand for illustrative purposes.

3.7.1 Local Telephone Service Pricing and Service Availability

3.7.1.1 Business Telephone Service

46. Telecom's standard rates are in the following table. Some business telecommunications services users can typically qualify for up to a 10% discount on business telephone line rentals and call usage charges under Telecom's premier plan. Discounts of 10% or over must be disclosed under New Zealand's telecommunications information disclosure regulations.

47. Saturn Communications offers business line rental for $599.40 per annum (exc. GST).

3.7.1.2 Residential Telephone Service

48. Standard Telecom local residential telephone service is $36.34 per month (including GST). This includes unlimited local calls. Other options are available.

49. Saturn Communications offers a local residential telephone service for $29.95 per month (includes unlimited local calls), available in Saturn's service areas in Wellington and the Kapiti Coast. Saturn offers a $10 per month discount for subscriber who also take up their cable TV service (prices include GST at 12.5%).

3.7.2 National (Toll) Call Pricing

50. All service providers offer various specials to customers on a regular basis. The rates below are only intended to give an indication of pricing for direct dial national calls for residential customers.

3.7.2.1 Telecom Standard Residential Direct Dial National Call Rates (GST exclusive)

51. Clear and Telecom NZ offer $5 capped weekend and weeknight rates available only to their respective residential direct dial national call customers. Saturn Communications offers a capped $4.50 national call rate for its residential customers, for both peak and off-peak periods.

52. Telecom has also introduced two flat-fee options which provide residential customers with free off-peak calling into either a neighbouring local calling area or a more remote local calling area. The first, Favourite Place - Neighbouring Area, costs $19.95 a month. The second, Favourite Place - New Zealand, costs $29.95 a month

3.7.2.2 WorldxChange Basic Residential Tariff Structure

53. Direct dial residential customers. Peak rate (Monday-Friday 8.00am-4.00pm) 20c-30c per minute. Off Peak rate (Mon-Fri 4.00pm-8.00am, all weekends) 16c-20c per minute.

3.7.3 Cellular Tariffs

54. Telecom has a wide range of cellular plans for customers. The basic plan aimed at residential customers is $15 per month access with call rates ranging from 20c-40c per minute for off-peak and $1.79 peak (GST inclusive). See Telecom's web site for more information.

55. Telecom charges 71c per minute (GST inclusive) for a residential telephone customer to call a Telecom cellular phone in New Zealand.

56. Vodafone New Zealand also offers a range of cellular rental plans. A base offer offer is $29.95 per month, which includes 200 minutes of off-peak calls (7pm-7am weekdays, all weekends and public holidays) calls anywhere in New Zealand. Other calls cost 20c per minute and $1.79 per minute for peak calls. Various other plans are available, refer to the Vodafone web site.

57. In New Zealand, cellular phone subscribers do not pay for calls received, only calls made.

3.7.4 International Tariffs

58. The international market is extremely competitive, with Telecom, Clear, Telstra, Global One, Worldxchange, Telegroup, Compass and Newcall among the companies offering service. No tariffs are supplied as prices change frequently and discounting and special deals are common, as companies react to the intense competition. Contact carriers for latest information on tariffs by route and special deals available (e.g. capped off peak rates for calling Australia $10 and the US, UK, Canada and Ireland $15 were offered by Telecom from late 1998).

3.8 Telecom's Kiwi Share Obligations

59. Since 1 November 1989, eight increases to residential rentals have been implemented. The telephone rentals (not including GST) are set out below.

60. The graph below shows that the real price of Telecom's standard residential telephone service rental (not including GST), has meet the requirements of the Kiwi Share obligations, as the real price has not exceeded the level charged on 1 November 1989.

3.9 Residential Telephone Service Quality Indicators

61. When Telecom was privatised in 1990 and the price of residential telephone service was capped by the Kiwi Share requirements, there was some concern that residential telephone service standards might not be maintained. To address this concern Telecom agreed in May 1990 to a request from the Minister of Consumer Affairs, to voluntarily publish indicators of the quality of the residential telephone service, on a half yearly basis, via media releases and in company reports.

62. Ten telephone service indicators were initially agreed upon which included service connection times, fault incidence, operator response times, SPC exchange availability, payphone availability and billing disputes. The objective was to provide residential customers with a clear understanding of Telecom's telephone service performance, and provide a safeguard against declining service standards.

63. These initial indicators showed improved performance from 1990 up to about 1993. There was then a small decline in fault clearance times. Telecom attributed the decline to one-off factors, including unusually high rainfall and associated flooding, along with severe electrical storms in some areas and problems arising with the centralisation of all Telecom telephone service fault reporting in the Auckland area.

64. In 1995 the Ministry of Consumer Affairs, in conjunction with Telecom, reviewed the adequacy of the quality of service indicators and a set of new indicators was agreed. The new set of indicators and recent performance follow:

(Residential telephone service requests = SRs)

65. The residential telephone service quality of service indicators generally indicate that service quality has improved.

5 As at 31 March.

6 As at September 98.

7 As at 31 March.

8 millions in year to 31 March, excluding interconnect.

9 millions in year to 31 March.

10 Total access lines = number of main lines + cellular connections.

11 Excluding 1993 abnormal costs.

12 Including abnormal restructuring item of $493 million for period 1993-97 in 1993 result with consequent affect in following years.

13 Excludes 1997 abnormal items.

14 Excludes 1997 abnormal items, includes Pacific Star which is now classified by Telecom as a discontinued business operation.

15 PPP exchange rates are based on comparison across countries of the cost of a representative basket of goods and services - hence the term purchasing power parity.

16 The arrow symbols represent in which direction of traffic the agreement applies.

17 BellSouth says it terminated the 1993 Agreement as of March 1996, but continues to pay the rates set out in that agreement while negotiating towards a new agreement. Telecom says the agreement is still in force as it was not validly terminated. Both parties are presently negotiating a new interconnect agreement.

18 Note: In August 1997, after obtaining the Government's agreement, Telecom reduced the standard residential telephone service option by $1.25 (GST inclusive) in exchange for the withdrawal of the free directory service component and the introduction of a $0.50 charge per residential user directory service inquiry.