Scoop has an Ethical Paywall
Telco levy shows competition creeping up
Nothing illustrates the shifting shape of New Zealand's telecommunications sector better than the Commerce Commission's latest stab at deciding who gets to pay what for the 2013 Telecommunications Development Levy.
The levy or TDL is effectively a tax on telcos to help pay for rural services. It's a hangover from when the government privatised Telecom NZ.
When Telecom NZ was government-owned, there was a social obligation for people living in towns where providing telecommunications services is relatively cheap to subsidise those living in rural areas where stringing wires between buildings is more expensive. This was not a bad deal for city customers, a bigger, inclusive network is more valuable for everyone.
Companies above a certain size pay TDL contributions depending on their share of the total telecommunications business. There's a question over what part of their business counts, but it's a good first approximation of the relative size of New Zealand's telecommunications companies.
In 2014 Telecom NZ, soon to be Spark, accounts for around 40 percent of market revenue. That's down from 70 percent share of revenue in 2007. Some of the change is because of the Chorus demerger. But even if you add today's Chorus share, there's still a sizeable 10 percent fall in Telecom's market power.
Vodafone, which now includes TelstraClear is still in second place with a roughly 30 percent share. I added the Commerce Commission numbers for Vodafone NZ and Vodafone fixed to reach this number. In 2007 Vodafone was around 24 percent of the market and TelstraClear accounted for 5.5 percent. The collective market share has barely changed in seven years.
Chorus, now totally separate from Telecom NZ is in third spot with about 20 percent.
The remainder are still relative minnows, collectively they add up to less than 10 percent. This might not sound much, but the 2007 also-rans were barely one percent of the total. So this is where the change has been greatest.
Bill Bennett
Freelance journalist.
Auckland-based Bill Bennett writes technology and business stories that are directly relevant to New Zealand readers.
His emphasis is on telecommunications, but he also covers other aspects of technology and business. You can find his features in the New Zealand Herald and hear him regularly on RNZ Nine to Noon and the NZ Tech Podcast.
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