Menu
Is the Kiwi telco landscape ripe for disruption?

Is the Kiwi telco landscape ripe for disruption?

At least one IDC analyst thinks so

Credit: Dreamstime

A slight market contraction, a focus on resiliency and at least one new potential entrant are combining to make conditions in the local telecommunications sector right for a new competitor to make a big play.

This is according to new research by industry analyst firm IDC that shows how COVID-19 has dented revenue streams in the sector, particularly roaming revenue, prepay revenue and handset sales. 

IDC's 2020 New Zealand Telecommunications Report: An Unexpected Journey suggests that the New Zealand telco market decreased 2.4 per cent in the year to June 2020, with the research forecasting a slow recovery through to 2024. 

IDC points out that, a year ago, before the pandemic hit, the country’s telcos were working on their own transformations, focusing on agility and improving enterprise digital service offerings. 

Moreover, mobile network operators had started 5G deployments and network operators had brought forward capacity improvements to cater for Spark Sport's streaming of the Rugby World Cup, according to IDC.

This year, however, the focus has been largely on collaboration and conferencing tools, security and quality connections to the home, with renewed attention being directed towards helping small to medium businesses, many of which were somewhat unprepared to participate effectively in the burgeoning digital economy accelerated by COVID-19. 

IDC’s analysis suggests that the cumulative effects of lockdowns, new ways of working, contactless business and many of the other elements resulting from a new pandemic-hewn business landscape have created the “perfect storm” for a disruptive play in the telco market.

"Market players will focus on building resiliency and agility, then seek new paths to growth," IDC A/NZ principal telecommunications analyst Jefferson King said. "The rate of transition from resiliency to growth will depend on how digitally transformed they were before the pandemic".

As such, the time is ripe for a competitor to make a big play and take advantage of an opening in the telco market while others players might still be scrambling to build resiliency or taking a conservative 'wait-and-see' approach, IDC said. 

Digging deeper into the sector, IDC said that there were a couple of key spaces to keep an eye on in terms of just how ready the market ight be for a new competitor to make a major play.

The first of these areas is how aggressively mobile network operators migrate broadband customers to 5G fixed wireless broadband to save on input costs.

Another thing to watch closely will be how pay TV provider SKY plans to launch broadband services in the next few months, starting with cross selling to its TV customer base. 

According to IDC, while the big telco retailers lament the thin broadband margins, this won't bother SKY as much, as the provider can operate broadband services on little to no margin as a way to reduce churn on its more profitable pay TV service. 

So, IDC asks, will SKY launch softly, or make a more aggressive, disruptive play for market share?

Regardless of whether a new competitive entrant ends up coming in to disrupt the loca telco industry’s status quo, resiliency will take precedence as the industry — and the market it serves — navigates its way out of the pandemic. 

"In this upcoming year, resiliency is critical and the telcos must yet again reinvent themselves,” IDC senior research manager Monica Collier said. "Success in FY21, as economic uncertainty bites, will be a testament to the transformation efforts of previous years. 

“Those that aren't well positioned will focus resources on surviving. Those well positioned will have the resources to capitalise on new opportunities to thrive,” she added.

IDC's analysis comes as Vodafone NZ reveals details of how it is banking on the rise of public cloud — and the arrival of global public cloud players in the local market — to nullify its rivals' infrastructure advantages.



Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags VodafoneTelcoNew Zealand

Featured

Slideshows

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Meet the winners of the 2020 Reseller News Innovation Awards

Meet the winners of the 2020 Reseller News Innovation Awards

Reseller News honoured the standout players of the New Zealand channel in front of more than 500 technology leaders in Auckland on 21 October, recognising the achievements of top partners, start-ups, vendors, distributors and individuals.

Meet the winners of the 2020 Reseller News Innovation Awards
Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Show Comments