Where will new telco competition arise in ANZ?

Market disruption is increasingly driven by established brands with existing distribution networks and sub-brands.

David Kennedy · Venture Insights9 August 2024Period: August 20244 min read

Last updated 6 May 2026

84%↑

Market share held by the largest three NZ retail telcos (2022)

1.3%↓

New Zealand MVNO market share following Vocus/2degrees merger

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Abstract

This report analyses the shifting competitive landscape in the Australia and New Zealand telecommunications markets. While consolidation has seen major operators grow larger, new activity is emerging from smaller MVNOs and fixed broadband providers. The analysis suggests that future disruption will likely stem from established brands with existing distribution networks rather than new full-service operators, as high fixed costs and price competition make standalone mass-market operations increasingly difficult to sustain.

Key Takeaways

Consolidation has increased the dominance of major players, with the top three NZ telcos now controlling 84% of the market.
New competition is shifting from full-service startups to established brands like supermarkets and utilities using telco services as an adjacency.
High fixed costs make standalone mass-market operations vulnerable; Amaysim needed 600,000 users to turn a profit in 2015.

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Frequently Asked Questions

Standalone entry is increasingly difficult due to massive scale requirements; for context, Amaysim required a base of 600,000 users to achieve profitability in 2015. In New Zealand, the MVNO sector remains marginal, accounting for just 1.3% of the market following the Vocus/2degrees merger.

The primary threat is shifting to established non-telco brands like Woolworths, which uses its retail footprint to offer 10% plan discounts to Everyday Rewards members. These players leverage white-label NBN infrastructure to enter the market with minimal capital expenditure compared to traditional carriers.

Market concentration is high, particularly in New Zealand where the three largest retail telcos control 84% of the market. This leaves only 16% of the broadband market for all other operators, significantly raising the barrier to entry for new full-service competitors.

Incumbents are aggressively deploying internal sub-brands such as 'Buddy' and 'Belong' to segment the market and protect their core margins. This strategy allows them to compete for the 16% of the market held by smaller operators without diluting their primary brand's premium positioning.

Abstract

Key Takeaways

Consolidation has increased the dominance of major players, with the top three NZ telcos now controlling 84% of the market.

New competition is shifting from full-service startups to established brands like supermarkets and utilities using telco services as an adjacency.

High fixed costs make standalone mass-market operations vulnerable; Amaysim needed 600,000 users to turn a profit in 2015.

Frequently Asked Questions

Abstract

Key Takeaways

Frequently Asked Questions

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