Telecom New Zealand
From Free net encyclopedia
Telecom New Zealand Template:Nzx Template:Asx Template:Nyse is a Wellington-based telephone company formed after the privatisation of the New Zealand Post Office in 1990 and is also New Zealand's second largest mobile operator. Telecom is the largest company by value on the New Zealand Exchange (NZX) and movements in its share price have a great influence on the index of movements in the top fifty companies.
Telecom was formed in 1987 from a division of the New Zealand Post Office and privatised in 1990. The selling price is considered by many to be extremely low, given that Telecom had a monopoly of all phone lines in New Zealand at the time. Others consider that the capital requirements to modernise the network were better provided by private enterprise than the government.
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History
1987
- The New Zealand Post Office divests itself of the newly created Telecom which was created as a State Owned Enterprise (SOE) on March 31st.
- The Government-owned Telecom Corporation is to have a commercial focus. It purchases the assets of the old Post Office for $3.2 billion and work begins on improving the services and network.
- Telecom launches its 025 mobile network and CDPD mobile data network The New Zealand telecommunications market is progressively deregulated.
1990
- Just four years after the company was formed, Telecom is sold to two United States-based telecommunications companies: Bell Atlantic and Ameritech for $NZ4,250 million. The two companies today still have part-ownership of the company.
- Clear Communications (now known as TelstraClear), begins the first network to compete with Telecom.
1991
- Telecom lists on the New Zealand, Australian and New York stock exchanges.
1992
- Telecom implements a NZ$200 million dollar fibre optic cable connection between Australia and New Zealand.
1993
- Ameritech and Bell Atlantic reduce their Telecom shareholding to a combined 49.6%.
- BellSouth sets up the first mobile network to compete with Telecom.
1995
- Clear Communications (now known as TelstraClear) reach an agreement on local service interconnection.
- Telecom creates First Media Ltd to develop a cable television network across Auckland and Wellington called First TV
1996
- Telecom establishes a telephone exchange in the United States for international traffic.
- Telstra New Zealand Limited (now known as TelstraClear) sets up operations in the New Zealand business market.
- Telecom launches an Internet Service Provider, Xtra, which is New Zealand's largest internet service provider today.
1997
- Saturn Communications Limited (now known as TelstraClear) enters the residential phone market in Wellington.
- Telecom buys back NZ$1 million of its shares.
1998
- Ameritech sells down its 24.8% shareholding in an international public offering.
- Bell Atlantic issues exchangeable notes that are convertible into the Telecom shares that it owns.
- Telecom celebrates 500,000 mobile customers connected to its mobile network.
- Southern Cross Cables Limited, half owned by Telecom, announces plans to build a fibre optic cable linking New Zealand with Australia and North America.
- Vodafone New Zealand buys BellSouth and starts a campaign to attract Telecom customers to their network.
1999
- Telecom establishes a presence in Australia, buying 78% of AAPT, Australia's third largest telecommunication company.
- Telecom upgrades its nationwide payphone network to smart card technology.
- Telecom's fast Internet service based on ADSL technology, called JetStream, is launched and rolled-out progressively in local exchanges.
- Telstra merges New Zealand operations with Saturn to form TelstraSaturn Limited.
2000
- Xtra signs up its 300,000th customer.
- Telecom Mobile, the mobile division of Telecom celebrates 1,000,000 customers connected to its mobile network.
- The New Zealand Government conducts a comprehensive review of the regulatory regime.
- Telecom raises its AAPT shareholding to 100 percent.
2001
- The Government passes the Telecommunications Act, setting up a Telecommunications Commissioner.
- TelstraSaturn buys Clear Communications to form TelstraClear.
2005
- Telecom releases Bitstream, a 256kbit ADSL service sold at wholesale prices (at approximately 10% discount off the retail price) to other ISP's.
- Telecom's mobile customers find out that their privacy and security is not safe on the Telecom network, when a phreaker named ^god releases an exploit to the media allowing access to almost anyone's voicemail.
- Telecom posts a profit of NZD 916 million.
Telecom Mobile
Telecom Mobile is New Zealand's second largest mobile operator, with about 49.5% market-share, behind Vodafone. Telecom operates AMPS, Digital D-AMPS/TDMA and CDMA, including EV-DO mobile phone systems in New Zealand. AMPS and D-AMPS service is sold under the 025 brand and CDMA services are sold under the 027 brand. Telecom is currently phasing out the older 025 network. Most of their customers have migrated over to the 027 network. Telecom is set to turn off the 025 network in 2007. The 027 CDMA EV-DO network is marketed as T3G, a 2 Mbit third generation mobile system.
Customer numbers and market share
The following is customer numbers and market share information for Telecom Mobile, which includes both 025 and 027 customers. Since Vodafone took over BellSouth in the late 1990's Telecom's market share has dropped every year.
In 2005 Telecom launched New Zealand's first 3G network using the brand name T3G. Being first into the 3G market in New Zealand, along with aggressive marketing and a $10 a month text message package has allowed Telecom to claw back some market share from Vodafone. In November 2005 Telecom reported 72,000 new mobile phone customer, compared to 27,000 for Vodafone.
| Quarter | No of customers | Market share % |
|---|---|---|
| December 1999 | 858,000 | 68.37% |
| December 2000 | 1,150,000 | 60.43% |
| December 2001 | 1,379,000 | 56.94% |
| December 2002 | 1,229,000 | 50.18% |
| December 2003 | 1,298,000 | 49.95% |
| March 2005 | 1,520,000 (approx) | 44.6% |
| November 2005 | 1,600,000 | 46% |
Recent information shows Telecom to have 1.6 million customers - against Vodafone's 1.9 million customers.
Criticism
Telecom has been criticised for using its status as a government-protected monopoly to charge high prices whilst providing poor service, as an example; on XTRA Jetstream it can cost over NZD$1200 to download 100GB of data in a month, plus monthly access fees (at residential rates, business is more expensive). While there are competitors in the cellular and toll-call markets, it has proven difficult for other companies to establish residential services due to Telecom’s control of local loop services. Telecom has also leveraged its control of residential services to establish the country’s largest ISP, Xtra.
Competitors allege that Telecom engages in unfair practices to prevent competition from arising, and resells broadband capacity to Xtra at lower prices than to other ISPs.
In July 2005, two dozen Internet service providers formally complained to New Zealand's Commerce Commission via a letter. [1] Notably absent from the list of signees were Telecom’s ISP, Xtra, and several ISPs owned by TelstraClear.
Telecom’s response
In an article published on 25 October 2005, Telecom claimed that the reason for poor broadband uptake in New Zealand was because of free local calling. Telecom stated “customers have the option of moving to faster broadband services, but free local calling creates a disincentive by allowing them to use dial-up for as long they want.” However, internet experts disagreed and even the secretary of the OECD took a shot at Telecom.
Late 2005, early 2006
More recently, Telecom has been the subject of criticism on an episode on Campbell Live, during which Teresa Gattung was grilled by the show’s host, and an episode of the New Zealand edition of Sunday. Critical articles have been published by various magazines and newspapers—among the most noticeable of these was published by the National Business Review, in which it was stated that “Far from being ‘Xtraordinary’, as its multimillion dollar advertising would have you believe, Telecom is strangling the nation’s advancement.” [2] The New Zealand Government has been investigating whether it may need force Telecom to unbundle the network, in doing so allowing other companies access, allowing almost instant improvement of broadband service for consumers.
Effects of monopoly
The New Zealand Treasury has estimated the economic loss from Telecom's monopoly to be in the region of $50–$250 million a year. Another study commissioned in 1998 by rival company Clear (now TelstraClear) estimated that the loss was $400 million a year.