CDMA network helps Telecom offset falling share of GSM market

19 Nov 2003

A 27% rise in CDMA subscribers during the third quarter of 2003 has helped Telecom New Zealand stem the loss of mobile market share to rival Vodafone, despite falling further behind in the race to sign GSM customers. In the three months to the end of September Telecom’s CDMA customer base rose from 320,000 to 407,000, whilst the operator’s GSM subscribers increased by just 20,000 to 1.27 million. This gave Telecom an overall 54% share of the market, up from 53.8% at the end of June 2003. During the same period Vodafone New Zealand connected 80,000 new GSM customers to take its total to 1.43 million, equal to 46% of the total market, down slightly from 46.2% three months previously. Telecom, which is desperate to retain its market lead over Vodafone, said it offered cheaper CDMA-compatible handsets and discounts on text messaging in a bid to drive growth on its high speed network during the quarter. Commenting on the results, Chief Operating Officer Simon Moutter said ‘We are hell-bent on retaining half the market and will do whatever it takes, including sacrificing bottom line’.

The launch of CDMA services in July 2001 allowed Telecom to expand its product range in a bid to entice customers. In July 2002 it launched a mobile version of its ADSL internet access service – Jetstream – over its CDMA 1xRTT network, and during the year to the end of June 2003 added 84,000 new mobile Jetstream connections. In 2003 Telecom launched enhanced CDMA services in Wellington, Waikato, Paraparaumu Beach, Southland, the Ruapehu District, and Counties Manukau and Castlepoint.

Vodafone New Zealand was established in November 1998 when the Vodafone Group acquired BellSouth New Zealand from parent companies BellSouth and Singapore Technologies Telemedia. At that date the cellco had a market share of around 21%, having been unable to break Telecom’s dominance, but following the takeover this changed dramatically. Like its rival, Vodafone has introduced a number of new services recently. In April 2003 it launched its multimedia messaging service (MMS) Vodafone Live!, giving users access to a range of innovative services including picture messaging, arcade style games, news, sport and local information, and in August it introduced the ‘mobile tool box’, a service which allows customers to choose what promotional text messages they receive on their mobile. In October 2003 Vodafone teamed up with IBM to provide a comprehensive connectivity solution. Under the agreement, users will be able to purchase an IBM ThinkPad combined with a Vodafone Mobile Connect Card and GPRS data connection.

PriMetrica’s GlobalComms Database

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