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2degrees arrival harder on Vodafone, report suggests

Fuseworks Media
Fuseworks Media

Wellington, April 23 NZPA - The entry of company 2degrees into the mobile telecommunications market last year appeared to take a bigger toll on Vodafone than rival incumbent Telecom.

The Commerce Commission's 2009 telecommunications monitoring report, published today, estimated 2degrees had 3.8 percent of the mobile market share at December 31.

Vodafone was estimated to have 49.6 percent, down from 52.1 percent at December 31 2008, while Telecom had 46.6 percent in the latest year, down from 47.9 percent.

The commission said it based its estimate on information from 2degrees in February that 206,000 customers were actively using its services. It puts 2degrees' estimated market share at January 31 at more than 4 percent.

Following the entry of 2degrees into the market last August, the number of mobile numbers switched to different networks each month had risen significantly, peaking at 17,313 in September.

Switching to 2degrees was relatively easy for Vodafone customers because it was just a SIM card swap, whereas users of Telecom's CDMA network would need to buy new phones to change to 2degrees, the report said.

It also raised the issue of the significant difference in prices between calls made to a mobile phone on the same network, known as on-net, than to a mobile phone on another network, which is off-net.

The low average price per minute for on-net calls was due to the introduction of restricted on-net pricing plans such as Vodafone BestMates and Telecom My Favourites, the commission said.

Competition concerns associated with significant on-net price discounting had been highlighted in a commission investigation, and pricing and usage trends in the mobile market would be closely monitored.

Overall, today's report said indicators suggested that competition in telecommunications markets had increased between 2006 and 2009, with consumer choice and service quality improving while prices fell.

Despite the increased competition, a few large firms still had significant market shares.

Total telecommunications industry investment had continued to rise since 2006, while retail revenues had been declining, the report said.

Alternative providers of broadband services on Telecom's network had increased their market share from 24 percent to 37 percent in the past three years. Over the same period, broadband uptake had doubled and was now around the OECD average.

Broadband speed, availability and quality had improved significantly.

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