COVID-19 experience highlights the importance of NZ’s world-class telecommunications networks

Aug 6, 2020

TCF CEO Geoff Thorn said the lockdown experience was a great reminder of the importance of fair industry profitability, as telecommunications companies need to be in good financial shape so they can continue to make the huge investments required in new services and technologies.

The TCF, which represents the majority of telecommunications providers in New Zealand, has today published its 2020 Industry Report. Using data collated by an independent research company (Network Strategies), the report assesses the state of the industry across a range of parameters. The TCF periodically publishes these industry reports, the previous being in 2017.

The report says that during the lockdown, digital activity surged as business operations moved from the office to the home, and education shifted from the classroom to the living room.  Daytime broadband traffic jumped by as much as 85%, while traditional voice calling was up 70%.

“It was a significant test for the telecommunications sector, and collectively the industry stepped up to meet unprecedented levels of demand. The importance of what the industry does gave new meaning to the phrase ‘essential services’ and cemented widespread recognition that telecommunications is vital to the nation’s wellbeing,” Thorn said.

Thorn said previous investment totalling about $15 billion over the past decade meant the country had the telecommunications capacity and resilience to serve New Zealanders well in this time of crisis.

The Ultra-Fast Broadband (UFB) programme in partnership with Government means 82% of homes and businesses now have access to fibre, rising to 87% by end 2022. In addition, the Rural Broadband Initiative (RBI) is extending mobile and high-speed wireless broadband coverage to 99.8% of the population by 2023. New Zealand currently ranks third in the world for mobile connectivity[1] and 12th for the impact of communications technology on a nation’s economy, digital competitiveness and future growth[2]

However, the lockdown also reinforced how those who don’t have the necessary access to affordable broadband – and the skills and devices to best use that access – are at a real disadvantage in today’s world.  TCF members are working with community groups on various subsidised broadband initiatives as well as supporting Government efforts such as the Ministry of Education’s distance learning package.

The TCF also recognises the economic impact of COVID-19 means more New Zealanders will struggle to pay their bills, including for their broadband and mobile plans. The industry overall is committed to being socially responsible when addressing financial hardship among customers. For market competition reasons, each telco retailer must each take their own approach to dealing with their customers. 

In recent years, New Zealanders have benefited from a significant fall in the cost of telecommunications services, with average prices now lower than ever. Consumer Price Index data showed telco prices have fallen markedly over the past decade, at a time when costs have risen steadily for other key services such as electricity, gas and local authority rates.

“While this has been great news for consumers, the current industry economics are challenging the ability of the industry to keep investing at the rates required to ensure New Zealand can benefit quickly from the best technology the world has to offer,” Thorn commented.

“We’ve seen how technologies like fibre and 4G have transformed the way New Zealanders use telecommunications – with the adoption by consumers and businesses often exceeding initial expectations.  We can expect the same to happen with the next wave of technologies – 5G, the Internet of Things, gigabit and 10 gigabit broadband, or whatever is around the next corner. The telecommunications sector is keen to ensure New Zealanders continue to reap the benefits of world-class networks and services in the years ahead.” 

To view a copy of the 2020 Telecommunications Industry Report, click here
To view a summary of the report, click here

[1] GSMA, 2019 rankings.

[2] Global Connectivity Index, 2019.

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Paul Brislen.

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