Telco analyst Paul Budde has predicted the financial crisis will result in a drop in Telco consumer demand, putting additional pressure on telco service prices next year. According to Buddle New Zealand’s telco sector will fare better than that of Australia due to the existance of the framework for rolling out its national telco infrastructure aimed at leveling the playing field for seccond tier telcos.
Budde predicts a growth rate of between to 2% to 3% for the telco services market in 2009, depending on the severity of the local economic downturn.
With Vodafone gaining a solid foothold in the fixed line market, Telecom is under increasing pressure in both fixed line calling and broadband and predicted to overtake TelstraClear as Telecoms main rival.
Vodafone has historically held an edge over Telecom in mobile services and Budde predicts the gap will continue to widen. However, Telecoms more competitive 850MHz 3G HSPA network, due for rollout by mid 2009, will help to slow the gain. As more small competitors secure more attractive wholesale agreements, further pressure on prices will be inevitable.
However, outside of the pricing issue one can reasonably expect a further consolidation in the market, especially among smaller fixed-line telcos and ISPs.
TelstraClear has failed to gain any significant gain in market and with investment dollars now under scrutiny, we can expect Telstra to be tight with funds for the New Zealand subsidiary.