Assets

242. As at September 2008, retail fixed line connections totalled about 1.9 million compared to retail mobile connections of 4.6 million. The graph that follows shows how the numbers of mobile and fixed line connections have changed over the last 13 years.

Mobile Connections versus Fixed Line Connections

Source: Commerce Commission 2008 Telecommunications Market Monitoring Report

243. Broadband coverage is now universal, with fixed-line (Digital Subscriber Line-based) broadband available to approximately 93 per cent of all lines, and either wireless or satellite-based broadband available to the remainder.

244. There are now three privately owned cellular networks.

245. In Wellington and Christchurch, TelstraClear provides consumers with an alternative to the Telecom network using hybrid fibre-coaxial (HFC) cable. Both TelstraClear and Telecom have comprehensive nationwide backhaul networks which comprise the intermediate links between the core, or backbone, of the network and the small subnetworks at the "edge" of the entire hierarchical network. A number of other players provide regional and urban backhaul in various parts of the country.

Institutional arrangements

246. The New Zealand telecommunications market is one of the most liberalised in the world, with no statutory or legal barriers to entry. Telecom Corporation of New Zealand Ltd (Telecom) was established as a state-owned enterprise in 1987 after the break-up of the New Zealand Post Office, and privatised in 1990. The Kiwi Share agreement was written into Telecom’s constitution, naming the Minister of Finance as the 'Kiwi Shareholder' and safeguarding the ongoing interests of the Crown in Telecom’s assets through the various protections listed as 'Rights of the Kiwi Shareholder.' (This was at a time when there was little alternative network or technology to Telecom’s).

247. With few exceptions, the major infrastructure assets associated with each of these service areas are in private ownership. In the fixed-line telephones service market, Telecom remains the dominant provider, owning network assets throughout the country. However, competition in the broadband market has increased markedly in the last two years. Telecom currently shares the mobile market with Vodafone (which has the majority market share of 53.7 per cent), and is the largest single owner of data communications infrastructure.[63] A third mobile provider, NZ Communications (trading as 2degrees), entered the market in August 2009.

248. Multiple residential and business communications companies have been taking advantage of local loop unbundling and using Telecom infrastructure, which has resulted in more competition for land line services with cheaper prices.

249. The Commerce Commission regulates telecommunications under the Telecommunications Act 2001, which is designed to promote competition in telecommunications markets for the long-term benefit of end-users. This gives the Telecommunications Commissioner the right to make determinations on price and non-price terms for a range of designated services sold by Telecom to competitors.

Funding and Pricing

250. Recent benchmarking exercises have identified New Zealand’s broadband pricing to be highly competitive, consistently ranking in the top third of OECD pricing for all categories of broadband usage.[64] Improvements in coverage, performance and pricing are also leading to an increase in broadband uptake.

Planning

251. Apart from the Government's proposed roll-out of fibre-optic cable (worth $1.5 billion), planning is the responsibility of the various market participants.