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Marketing Analysis Vodafone

            
             New Zealand's telecommunications industry has seen signs of an upturn in 2002, and forecasts are for even better results in 2003. Telecom's dominance is coming under increasing commercial pressure from the recently merged TelstraClear and Vodafone, in the voice/data and mobile markets, respectively, as well as increasing regulatory pressure from a Telecommunications Commissioner who's already shown a willingness to favour competition. Broadband is likely to be a key area, with the government promoting and part-funding a regional expansion plan for high-speed access that will be rolled-out throughout 2003.
             Key Highlights:.
             Telecommunications services revenue growth for 2002 showed a slight increase to 5% (up from 3% in 2000). Growth for 2003 is expected to be 7.8%. .
             Telecom has been severely criticised, but we see this as a positioning manoeuvre by the incumbent as it prepares to do regulatory battle over the Kiwi Share negotiations. .
             2003 could be the year that Telecom begins to lose its grip on Local Loop Unbundling (LLU) as the rules come under serious scrutiny from the Telecommunications Commissioner. Any change here will produce dramatic changes within the industry. .
             TelstraClear posted a net loss in the six months of 2002. The company is unlikely to make a profit until 2004. .
             Telecoms share of the contestable fixed voice market has only slipped from an estimated 85.4% in 1997, to 78.8% in 2002; a further 1.2% drop is predicted for 2003. .
             With no significant infrastructure developments by TelstraClear, Telecom has been unchallenged and remains the dominant player in the all-important lucrative local loop market. .
             After last years proliferation of networks, little significant infrastructure has been added, largely as a result of regulatory uncertainty and restructuring in the market. This is decremental to the New Zealand economy as well as to its society. .
             Telecom remains a tempting international take-over target, despite its acquisition of AAPT.


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