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NZ business mobile market looking rosy, according to Commerce Commission

31 Mar 2016

The New Zealand business mobile market is being viewed as competitive, with most business happy with their providers and costs.

That’s according to the Commerce Commission’s latest research, aimed at providing greater insight into the factors affecting competition in the high value business segment of the mobile market. Part of the Commission’s role under the Telecommunications Act 2001 is to monitor the performance and development of telecommunications markets.

New Zealand currently has three mobile network operators – Vodafone, Spark and 2Degrees. Spark and Vodafone serve around 95% of the business mobile market.  Telecommunications Commissioner Dr Stephen Gale says the study, undertaken by UMR Research, was aimed at improving the Commission’s understanding of any factors potentially inhibiting competitive dynamics of the business mobile segment.  For the study, UMR surveyed businesses in New Zealand to gain more detail on whether there are any barriers impeding competition for market share, including impediments to customers switching providers and perceptions of mobile provider quality such as service delivery. UMR found that respondents believed the business mobile market was competitive compared to other industries. The majority of businesses surveyed were satisfied with their main mobile provider and only a small proportion (fewer than 15%) was actively looking to switch or would consider doing so when their contract was up.

When selecting a mobile provider, respondents said reliable coverage, good customer service and price were the most important factors.  “The majority of respondents don’t consider their mobile costs to be significant and say switching is not overly difficult, which means perceptions of network coverage and customer service become key factors in their choice of provider,” Gale explains. “Some businesses noted they were open to being persuaded to switch but had not been approached,” he says.

“It is also possible that misconceptions about network coverage contribute to businesses’ decision not to switch providers.  “Overall, the study does not suggest that there is any anti-competitive behaviour or structural, legal or systemic factors existing in the market that are inhibiting competition,” Gale adds.

“Instead, most businesses appear to be sticking to their providers as they are largely satisfied with the service they receive.”   

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