Total fixed communications services revenue in New Zealand is expected to return to growth over the next four years following a marginal decline this year thanks to the impacts of the pandemic.
Indeed, the local fixed communications services market is expected to enjoy increasing revenues at a compounded annual growth rate (CAGR) of 3.8 per cent during 2020-2025, to reach US$1.3 billion in 2025.
This is according to the New Zealand Telecom Operators Country Intelligence Report by analyst firm GlobalData, which suggests that most of the forecast growth will be primarily driven by the increases in the fixed broadband segment.
However, fixed voice service revenue is expected to decline at a CAGR of 0.7 per cent over 2020-2025, largely due to falling circuit-switched subscriptions and drop in fixed voice average revenue per user (ARPU) levels.
On the upside, fixed broadband service revenue alone will increase at a CAGR of 5.8 per cent over the same period, driven by robust growth in higher ARPU generating fibre-to-the-home (FttH) subscriptions.
“Fibre lines will account for a majority share of 61.3 per cent of the total fixed broadband lines in 2020 and will continue to rise to account for 75.4 per cent of the total fixed broadband lines in 2025,” GlobalData telecom analyst Aasif Iqbal said.
Iqbal suggested this increasing market share would be backed by the rising demand for higher-speed broadband connectivity and the government's investment in extending fibre network coverage to new areas of the country under the ultra-fast broadband (UFB) and the rural broadband initiative (RBI) initiatives.
“Spark will lead the fixed voice market through 2025, supported by its strong foothold in the circuit-switched segment and growing focus on voice-over Internet protocol (VoIP) services while its leadership in the fixed-broadband segment is supported by its strong focus on fixed network modernisation,” Iqbal said.
GlobalData’s analysis suggests that mobile data revenues will increase at the fastest CAGR — 9.9 per cent — over 2020-2025, driven by increasing data ARPU, growth in smartphone subscriptions and growing consumption of mobile data services.
Meanwhile, 4G subscriptions are expected to grow at a CAGR of 4.6 per cent over 2020-2025, led by continued 4G/LTE network expansion from major operators like 2degrees and Vodafone New Zealand.
At the same time, GlobalData expects 5G’s market share to reach 11.8 per cent by year-end 2025.