Commission releases research on business mobile market

Issued 31 March 2016
Release no. 103

Commission releases research on business mobile market

The Commerce Commission has today released independent research aimed at providing greater insight into the factors affecting competition in the high value business segment of the mobile market.

Part of the Commission’s role under the Telecommunications Act 2001 is to monitor the performance and development of telecommunications markets. New Zealand currently has three mobile network operators – Vodafone, Spark and 2Degrees. Spark and Vodafone serve around 95 percent of the business mobile market.

Telecommunications Commissioner Dr Stephen Gale said the study, undertaken by UMR Research, was aimed at improving the Commission’s understanding of any factors potentially inhibiting competitive dynamics of the business mobile segment.

UMR surveyed businesses in New Zealand to gain more detail on whether there are any barriers impeding competition for market share, including impediments to customers switching providers and perceptions of mobile provider quality such as service delivery.

UMR found that respondents believed the business mobile market was competitive compared to other industries. The majority of businesses surveyed were satisfied with their main mobile provider and only a small proportion (fewer than 15 percent) was actively looking to switch or would consider doing so when their contract was up. When selecting a mobile provider, respondents said reliable coverage, good customer service and price were the most important factors.

“The majority of respondents don’t consider their mobile costs to be significant and say switching is not overly difficult, which means perceptions of network coverage and customer service become key factors in their choice of provider,” Dr Gale said.

“Some businesses noted they were open to being persuaded to switch but had not been approached. It is also possible that misconceptions about network coverage contribute to businesses’ decision not to switch providers.

“Overall, the study does not suggest that there is any anti-competitive behaviour or structural, legal or systemic factors existing in the market that are inhibiting competition. Instead, most businesses appear to be sticking to their providers as they are largely satisfied with the service they receive.”

A copy of the UMR report Competition for Business Customers in the Mobile Industry: A Report for the Commerce Commission, is available online.

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