Fixed and mobile comms in New Zealand show diverse growth trends

A buoyant 5G market is to drive overall mobile services revenue growth in New Zealand, with a compound annual growth rate (CAGR) of 2.5% from $1.5bn in 2024 to $1.7bn in 2029, whereas its fixed communication services market is poised for more modest growth, with revenue expected to rise from $1.3bn in 2024 to $1.4bn by 2029, according to a report from data and analytics company GlobalData.

The analyst’s New Zealand mobile broadband forecast (Q2-2024) shows the key driver in the mobile data services segment will be rising adoption of 5G services.

Mobile voice services revenue is forecast to decline at a 1.8% CAGR over the forecast period owing to the increasing consumer preference for over-the-top (OTT) communications platforms and reduced voice average revenue per user (ARPU) levels due to telcos offering unlimited voice minutes with their mobile service plans.

By contrast, mobile data services revenue will increase at a CAGR of 5.8% between 2024 and 2029, expected to be driven by the steady growth in the consumption of mobile data services over 4G and 5G networks, and most importantly increasing adoption of higher-ARPU-yielding 5G services.

Overall, 4G will remain the leading mobile technology in terms of subscriptions through 2029 as operators continue to upgrade and expand their LTE networks. However, 5G subscriptions are estimated to increase at the fastest rate over the forecast period and are expected to account for about 46% of the total mobile subscriptions by the end of 2029 as operators accelerate their 5G roll-outs to more locations in the country.

An example cited in the report shows that as of July 2024, Spark 5G network coverage spanned 103 locations in New Zealand, with the operator having further plans to extend connectivity to all towns with a population exceeding 1,500 by 2026.

“The average monthly data usage over mobile networks is forecast to increase from 7.6GB in 2024 to 13.7GB in 2029, driven by the growing consumption of online video and social media content over smartphones, on the back data-centric packages offered by telcos,” commented Hrushikesh Mahananda, telecom research analyst at GlobalData. “One New Zealand will lead the mobile services market in terms of subscriptions through 2029, given its strong focus on 4G and 5G network developments and expansion across the country, and its various affordable prepaid and postpaid plans with unlimited calls and data.”

Meanwhile, the analyst’s New Zealand fixed communications forecast (Q2 2024) states that wired sector growth is being driven by increasing demand for fixed broadband, particularly fibre-to-the-home/business (FTTH/B) connections, while investments in fibre infrastructure continue to advance the country’s high-speed broadband capabilities.

GlobalData calculates that fixed voice services revenue will witness a marginal CAGR of 0.9% between 2024 and 2029, given the steady decline in circuit-switched subscriptions and sluggish growth in packet switched (VoIP) subscriptions.

Fixed broadband service revenue is expected to increase at a CAGR of 1.6% over the forecast period, mainly supported by the growth in fixed wireless and FTTH/B subscriptions on the back of government efforts to expand broadband connectivity in New Zealand.

The standout wired broadband player in the report was wholesale fixed line provider Chorus, which launched a fibre build programme in February 2024 to expand fibre internet coverage to 10,000 additional homes and businesses, encompassing 59 communities across the country. Vector Communications was found to lead the fixed voice services market by subscription share. Spark was top dog in the fixed broadband service market in terms of subscription share, supported by its strong position in the FTTH service segment and its promotional plans with fibre broadband and exclusive deals on music, films and sports.

“Fibre lines accounted for about 70% share of total fixed broadband lines in 2023 and will remain the leading broadband technology through to 2029. This growth in fibre lines will be driven by growing demand for high-speed broadband connectivity coupled with continued improvements in fibre broadband infrastructure in the country,” remarked GlobalData telecom analyst Sarwat Zeeshan.

“The ongoing shift towards fibre broadband is reshaping New Zealand’s fixed communication landscape, with FTTH/B becoming the backbone of high-speed internet access. As consumer demand for faster and more reliable connectivity intensifies, telecom providers must prioritise expanding fibre networks and innovating service offerings to maintain competitive advantage and meet the evolving needs of both residential and business users.”