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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
• OECD Basket Comparisons of Residential and Business Telephone Service Charges
• OECD Basket of Mobile Service 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
• 3.6.2 List of Interconnect Agreements
• 3.7 Pricing and Tariffs
• 3.7.1 Local Telephone Service Pricing and Service Availability
• 3.7.2 National (Toll) Call Pricing
• 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 Lines⁶

*estimated

Cellular Connections⁸

National Call Minute Volumes¹⁰

International Outward Call Minute Volumes¹¹

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 rates"¹³ (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.

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 standard OECD telephone service tariff basket models. According to the November 1999 results New Zealand is ranked 14^th in residential and 22^nd in business, out of 29 countries.

37. The standard OECD residential telephone service tariff basket model is representative of a user who makes about 400 call-minutes of local and national calls per month. New Zealand residential telephone service users' average per monthly local call use is understood to be in excess of 600 call-minutes per month. Average national call usage averages about 90 call-minutes per month. Average residential Internet service use using dial up connections is about 23.5 hours per month which equates to an average local call use of about 1400 minutes per month. Internet service use is increasing rapidly. In June 1999 Telecom said that that it handled 14.2 billion originated residential call minutes which equates to an average of about 810 residential call minutes per month. Clearly the standard OECD residential telephone service model (400 call-minutes) is not representative of average New Zealand residential telephone service user call demand.

38. A simple way of assessing New Zealand's relative performance at higher calling rates is to increase the use component of the standard OECD residential telephone service model. This has been done in the following graphical result where the use component has been doubled. This model result is representative of users with an average demand of about 790 call minutes per month. Using the November 1999 OECD results New Zealand's ranking using this approach was 6^th out of the 29 OECD countries.

OECD Basket of Mobile Service Tariff Comparisons

39. The following chart shows the comparative ranking of mobile telephone tariffs for OECD countries based on the OECD/Taligen digital mobile tariff basket model. New Zealand is 17^th out of 27 countries.

3.4 New Zealand Telecommunications Consumer Price Indexes

40. 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.

41. Notable features are:

• Long distance call prices have declined significantly. Statistics New Zealand's residential telephone services consumer price index indicates that since the establishment of long distance calls competition in March 1991, real long distance call prices have reduced on average by about 10% per annum (pa). In recent times it is apparent that price reductions are increasing. the last three years the average real price of long distance calls has reduced by about 15.9% pa which can probably be attributed to substantial entry in that time (for this period there have been more than five operators providing long distance calls on a nation wide basis);
• The price of residential local telephone service and long distance calls declined on average by about 4% pa since March 1991;

3.5 Telecommunications Capital Expenditure Statistics

42. 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.

43. 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 service (now discontinued).

3.6 Interconnection

3.6.1 Brief Summary of Main Interconnection Charges in New Zealand

(Note: All charges are GST exclusive)

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.

Typical Local Telephone Call Interconnection Charges

Telecom Charges for Providing Local Telephone Call Interconnection Service to Other Service Providers

3.0 cents per minute or part of a minute (c/m)- peak, everyday 7am - 10 pm

1.5 cents per minute or part of a minute (c/m)- off-peak, everyday 10pm - 7am

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)

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).

Calling Party Number Information (CPNI) Charge

1 cent for CPNI supplied.

3.6.2 List of Interconnect Agreements

44. The following table lists the more significant telecommunications network interconnect agreements from 1991 to December1999.

Interconnect Agreement & [effective start date]	Main services supported	Expiry
Clear-Telecom long distance calls[March 1991]	Clear national and international calls 14 TNZ PSTN (some 85% coverage of TNZ originating)	Dec 1995
BellSouth-Telecom [August 1993]15	BS Cellular TNZ PSTN BS Cellular TNZ Cellular	Dec1996 (In dispute)
TeamTalk-Telecom [March 1994]	TeamTalk Fleet Mobile TNZ PSTN	[March 1996] (Rolled over)
Clear-Telecom [May 1994]	Clear national and international calls TNZ PSTN (Extension to all new Zealand) TNZ PSTN Clear's 0800 service Telecom PSTN DDI provided to Clear using 9XX local numbers	Dec 1995
Global One - Telecom [29 March 1995]	TNZ PSTN Sprint (International calls only)	March 1998
Clear-Telecom [18 March 1996] (Effective, 1 Jan 1996)	C PSTN TNZ PSTN 0800 interconnection, both ways Clear TNZ Cellular TNZ PSTN Clear national and international	31 Dec 2000
Telecom-Telstra [25 June 1996]	TNZ PSTN Telstra
Telecom-Telstra [Nov 1996]	TNZ PSTN Telstra (National call flat rate charge carriage $0.09 c/m)
TeamTalk-Telecom [Dec 1996]	TeamTalk Fleet Mobile TNZ PSTN
BellSouth-Telecom [February 1997]	Supply of calling party number information for use with CLI	Interim agreement
Telecom-Telstra [May 1997]	PSTN Number Portability
Telecom-Saturn [June 1997]	Saturn PSTN TNZ PSTN Saturn TNZ Cellular (Note: Saturn will also require BellSouth and Clear network access)
Telecom-Telstra [November 1997]	TNZ PSTN - Telstra intl, nat, local
Telecom- BellSouth [February 1998]	TNZ PSTN- BellSouth cellular, nat, intl
Telecom -Newcall [May 1998]	TNZ PSTN - Newcall intl, nat
Telecom-Worldxchange [September 1998]	TNZ PSTN - Worldxchange local, nat, intl and PSTN number portability
Telecom- Compass [September 1998]	Telecom PSTN - Compass international/national
Telecom- Superway [October 1998]	TNZ PSTN- Superway local, nat, intl, mobile 0800
Telecom- Internet Group [December 1998]	TNZ PSTN- Internet Group local, nat, intl (may be IP PSTN based)
Telecom-Saturn [October 1999]	Saturn PSTN TNZ 0867 for ISP access TNZ PSTN Saturn 0867 for ISP access

Key:	PSTN= Public Switched Telephone Network; TNZ=Telecom New Zealand; BS=BellSouth; C=Clear; to and from; one way.

45. Most Telecom interconnect agreements have a comparability clause which in the event of a party to another Telecom interconnect agreement negotiating a lower rate for the same service with Telecom, would require Telecom to agree to include the new rate in other similar agreements containing the comparability clause.

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

3.7 Pricing and Tariffs

47. 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

Business Telephone Service

48. 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.

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

Residential Telephone Service

50. Standard Telecom local residential telephone service is $36.34 per month (including GST). This includes unlimited local calls. Other options are available, including HomeLine Economy which has a monthly rental of $24.75 (including GST) plus a 20c charge for each local call. Calls longer than two hours are charged an additional 20c per two hours.

51. 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

52. Many national call 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.

53. Under Telecom's Quick Call Plan, residential customers can pay a $5 a month flat fee (GST inclusive) to access the following per-minute rates.

54. Alternatively, Telecom residential direct dial national call customers can opt for $5 capped national calls at any time with the $5 Anytime Plan or $3 capped off-peak national calls at off-peak times only with the $3 Weekends & Weeknights Plan. Saturn Communications offers an equivalent capped $3 national call rate for its residential customers in the off-peak period (GST inclusive).

55. Telecom also offers two flat-fee options which provide residential customers with unlimited free calling into a neighbouring local calling area or unlimited off-peak free calling into 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 a month (GST inclusive).

3.7.3 Cellular Tariffs

56. Telecom has a wide range of cellular plans for customers. The following table briefly summarises the residential plans (GST inclusive charges).

Note: See Telecom's web site for more information.

57. Telecom charges 71c per minute (GST inclusive) for a residential telephone customer to call a Telecom cellular phone in New Zealand. IHUG offers a cheaper rate for making fixed to cellular network calls.

58. Vodafone New Zealand also offers a range of cellular rental plans. The pre-pay option prices peak period calls at $1.39 a minute and off-peak calls at 49 c/m. A base offer residential user option is priced at $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 $1.29 per minute for peak calls. Various other plans are available, refer to the Vodafone web site.

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

3.7.4 International Tariffs

60. The international market is extremely competitive, with Telecom, Clear, Telstra, Global One, Worldxchange, Telegroup, Compass and Newcall among the companies offering service. Tariffs should be requested from suppliers as prices change frequently and discounting and special deals are common, as companies react to the intense competition. Weekend international calls are currently (as at Jan 2000) capped at $5 to Australia and $10 to the US, UK, Canada and Ireland. Capped off-peak call rates to a range of other destination are available for $20 to $25.

3.8 Telecom's Kiwi Share Obligations

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

62. 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

63. 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.

64. 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.

65. 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.

66. 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:

⁶As at 31 March, excludes Centrex and ISDN lines.

⁷As at September 1999.

⁸As at 31 March.

⁹BellSouth sold to Vodafone in November 1998.

¹⁰to 31 March, includes 0800, excludes fixed to cellular.

¹¹millions in year to 31 March.

¹²Excludes 1997 abnormal items, includes Pacific Star which was classified by Telecom as a discontinued business operation.

¹³PPP exchange rates are based on comparison across countries of the cost of a representative basket of consumer goods and services - hence the term purchasing power parity.

¹⁴The arrow symbols represent in which direction of traffic the agreement applies.

¹⁵BellSouth 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.

¹⁶Note: 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.