IDC: UFB cost "great value for consumers" as telcos partner up

IDC: UFB cost "great value for consumers" as telcos partner up

Telcos moving towards partnerships in order to thrive in a highly competitive market

The nationwide UFB rollout is delivering great value, says IDC

The nationwide UFB rollout is delivering great value, says IDC

New Zealand UFB subscribers are benefiting hugely from a hyper-competitive retail market, according to analyst firm IDC.

On average and including all benefits, the average price of a typical unlimited fibre connection is $68.40, the firm calculates, describing that as "great value for consumers".

IDC's retail price tracking shows that the average price of a typical unlimited 100Mps download/20 Mbps upload speed service has fallen to $83.25 a month.

However, with retailers such as Spark or Vodafone offering free months or account credits when customers sign up, the cost drops considerably, to $68.40 a month.

The analysis comes as the government announced a new deal for "anchor" UFB services with network provider Chorus, promising price stability over the next few years.

IDC research manager Monica Collier said fierce ongoing retail competition meant the telco industry widely expected market consolidation a year ago. Instead, telcos are now leaning towards partnerships.

"We’ve seen Vocus and Vodafone partner to unbundle fibre, while Spark, Vodafone and 2degrees formed the Rural Connectivity Group," Collier said. "Telcos are partnering at an infrastructure level to achieve goals with economy of scale, but are still competing at a retail level."

The analysis comes in IDC New Zealand's annual telecommunications market report for 2018 titled Telco Wars: A New Hope.

The report also states that New Zealand telecommunications companies are becoming true digital services providers, meaning Kiwis can expect a wider range of digital products and services from their traditional telcos.

"New Zealander's are now starting to enjoy the benefits of a new world of digital services," Collier said. "It’s a combination of the Government's investment in fibre, which provided the much-needed high-speed infrastructure, coupled with the changes in how and what the telcos provide.

"The telcos are turning to new ways of working, for example, Spark and Vodafone are flattening their management structures and moving to more collaborative team work approach, while network provider Chorus has a new tagline: "nothing happens if it's not digital."

Furthermore, Collier said 2018 has also been a watershed year for streaming content in New Zealand.

“Stuff Fibre launched Stuff Pix, Vodafone launched Vodafone TV, TVNZ streamed four channels of content during the Commonwealth Games, and next year, New Zealanders will stream the Rugby World Cup, courtesy of Spark," Collier added.

"This wouldn't be possible without our nationwide fibre connectivity and Spark's shift to a digital services focus."

By 2020, New Zealanders can expect next-gen telcos to launch high-performance 5G networks in the mobile market and to offer widespread fibre unbundling in the fixed market, Collier said.

5G and fibre unbundling, done well, are the two key enablers that will hasten the shift away from traditional connectivity towards true digital services.

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