Mobile remains the strongest telco segment but increasing competition and saturation dampens stronger revenue growth
The New Zealand mobile market had been traditionally characterised as an oligopoly that is dominated by the prepaid segment with high prices, lack of product differentiation and low usage.
However, this market is about to see a rise in competitive intensity driven by 2degrees’ move to gain share in the lucrative postpaid and business mobile segments. We believe Vodafone NZ is most at risk and could lose approximately 3% of its subscriber market share by 2022.
The emergence of utility companies offering mobile products will also increase competition and create more “sticky” consumers.
We forecast the mobile market will remain the largest segment in the telco market with NZ$3.2bn revenue by 2022.