Telecommunications market enters new phase as Satellite boom reshapes competition -report

The Commerce Commission's latest Annual Telecommunications Monitoring Report shows new technologies and changing consumer behaviour are reshaping New Zealand's telecommunications market.

The sector is shifting from a decade of network build‑out to a more competitive phase driven by new technologies, particularly satellite services.

"The report highlights the strengths of the sector and the technological changes reshaping it," Telecommunications Commissioner Tristan Gilbertson says.

These changes were most notable in the rural sector with the advent of satellite broadband services led by Starlink.

The report said Starlink has grown strongly and now makes up 27 percent of rural broadband connections and is on its way to becoming the largest broadband provider as customers move of legacy copper connections.

"Satellite technologies are changing the economics of rural service provision, creating new options for consumers and intensifying competition across the market," Gilbertson said.

The commission said rural consumers can now access broadband speeds the rival urban centres, but speed is not always the primary driver of change.

"Others place greater value on local presence, on-the-ground support and knowing there is someone nearby to call when something goes wrong," Gilbertson said.

Local providers continued holding their ground against new competition, focusing on service and support, but customer satisfaction with telcos was still below the Commission's benchmark levels.

That dissatisfaction is not translating into an exodus of consumers switching providers, however, with overall satisfaction at around 69 percent and switching rates remaining low.

Gilbertson said that suggested there were still be frictions preventing consumers from changing providers, and addressing those barriers remained important.

Looking ahead, the Commission expects more satellite providers to enter the market, even as direct-to-cell services are expand mobile coverage terrestrial networks.

The report marks a shift in the market, with competition increasingly driven by technology rather than traditional providers.

"The future shape of the market is still evolving, but consumers should be the beneficiaries of the increased investment, innovation and competition that these technologies are bringing," Gilbertson said.