Wellington, June 3 NZPA - The value of the New Zealand telecommunications market fell by 1 percent in the March quarter, despite subscriber growth in broadband and mobile, according to independent tracking of the industry.

Telcos were finding it increasingly difficult to increase revenues, market analyst Tim Shepheard of independent research and consultancy company IDC said today.

"Traditional fixed telephony revenues continue to be eroded, while the so called 'new wave' broadband and mobile revenues are not growing enough to compensate," he said.

IDC's telecommunications market tracker put the quarterly value of the New Zealand market around $1.5 billion at the end of the March quarter.

Broadband uptake grew 5.8 percent in the quarter, taking the total broadband (non-cellular) subscriber base to more than 740,000 customers, and household penetration to 46 percent. Broadband revenues grew only 2.4 percent to $103.9m.

Telecom was estimated to have 65 percent of retail customer market share, IDC said.

Competition was increasing with other ISPs capturing 52 percent of broadband subscriber growth this quarter.

Mobile services in operation were equal to 105 percent of population at the end of the March quarter, at 4.48 million. Despite subscriber growth of 2.4 percent, total mobile revenue declined 1.4 percent in the March quarter.

Vodafone retained mobile dominance recording 52.4 percent subscriber market share and 60.3 percent revenue share, IDC said.

Traditional fixed telephony revenues declined a further 2.2 percent contributing just over $700m.

Telecom's total revenue market share fell marginally to 59.9 percent, with Vodafone a clear second holding 23.5 percent and rounding off the top three was TelstraClear with 8.4 percent share.

Mr Shepheard said the New Zealand telecom's industry continued to be under incredible political and public pressure to deliver cost effective broadband and mobile services to both consumers and businesses.

"Unfortunately for service providers, subscriber growth is not being met with comparable revenue growth. The persistent concern of how to drive revenue from broadband services is an ongoing issue for telcos across the board," he said.

"The price and speed-led competition is the tool of choice in this country, which to an extent is addressing the current needs of users.

" However telcos need to attract on price but grow revenues based on services -- and a vision beyond access into rich multimedia content and value added services is unclear."

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