Interesting article on use of mobiles in New Zealand - apparently the
Kiwis have more mobile market penetration than Australians, but use
them half as much.

And apparently they pay $40/month fixed-line rental (about A$35), and
get unlimited 'local' calls.

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http://www.computerworld.co.nz/cw.nsf/0/661A5CEE1B234C4DCC256E760080BDBE?OpenDocument

Mobiles aplenty but they're not ringing
Paul Brislen, Auckland
19 April 2004

Hands up all of you who don't have a cellphone. Both of you, see me
after class.

IDC has just released a report looking at the New Zealand cellular
market and it seems we're pretty much at saturation point. By 2008
around 82% of the population will have a phone and that will be that.

But there's a catch, of course. Here in New Zealand we all have the
beasts but we don't use them terribly much. On top of that, most of
those cellphones are on the prepay service rather than contract or
post-pay. New Zealand has a higher percentage of prepay services than
any other country IDC looked at (among them the UK, Hong Kong and
Australia). Prepay customers, according to IDC, spend on average five
times less than their post-pay counterparts.

Another analyst, Australian-based Paul Budde, earlier this month
claimed that only 7% of New Zealand's phone calls go via the mobile
networks, compared with more than 50% of calls in places like the US
and Scandinavia. Even Australia has double New Zealand's rate of
mobile usage with less market penetration.

So why is this? If we're all carrying the damned things, why aren't we
using them?

There have to be two reasons. First, local calls on land lines are
free, and it's hard to compete with a free service. They're not really
free, of course; you pay your $40 a month to Telecom for the privilege
of as many local calls as you want. Also "local" varies from place to
place. I have a free local calling area of at least half a million
people; your mileage may vary. Cellphone companies offer contract
deals that give users so many free minutes each month, but when you're
offering 100 minutes versus unlimited minutes it starts to look a bit
silly.

Then, of course, there are the call termination charges that TUANZ has
been so vocal about. These are the charges the phone companies slap on
each other for terminating calls on their networks. It's said they're
artificially high and kept that way so as to keep the cash flowing
between the two. A US Trade Representatives Office report that came
out this month lambasts New Zealand and several other countries,
including Australia, China and Korea, for having high termination
charges. However, as Vodafone tells me, the Americans aren't comparing
apples with apples. Over there, you pay to receive a call, meaning the
network providers get half their money from a source that's simply not
available to operators in the rest of the world. Of course New Zealand
and Australian termination charges look high -- they're double what
the Americans charge.

Telecom argues that neither its mobile division nor Vodafone have yet
made a huge return on their enormous investments in New Zealand and
that, despite finally being profitable, it'll be years before that
happens. So for unbundling, Telecom argues competition between
networks is the only way forward.

All of which makes it fascinating to see what happens when the
third-generation networks on the drawing board become reality.
Vodafone is close to signing a partner to build its 3G network and
TelstraClear is also talking about building one. But does the country
need three new cellphone networks when we don't make much use of the
ones we've got?