Kiwis get data-hungry as Netflix effect kicks in

nline TV and movie service Netflix launched in New Zealand in March 2015 (Reuters)
nline TV and movie service Netflix launched in New Zealand in March 2015 (Reuters)

Broadband use has skyrocketed in the past year, as more Kiwis hook up to ultra-fast broadband and feel the 'Netflix effect'.

Figures released by the Commerce Commission show households are downloading an average 48GB of data a month, up 50 percent in a year.

Online TV and movie service Netflix launched in New Zealand in March 2015. The 12 months before that saw data usage rise only 23 percent.

As of March 31, 197,000 customers had hooked up UFB out of a possible 922,000 connections.

"Our cheapest broadband services, at $75 per month, are 5 percent below OECD averages and fixed wireless broadband is available at $55 per month in 4G areas," says telecommunications commissioner Stephen Gale.

But for power users -- those spending $100 a month for UFB plans -- prices in New Zealand are 7 percent higher than the OECD average.

Unsurprisingly mobile data is booming, up 70 percent in a year to 390MB a month.

The cost of a 2GB, unlimited calls package is $59, down from $69 in 2014 and 7 percent below the OECD average.

"We are world leaders in affordable, low-user pay-as-you-go mobile plans," says Dr Gale.

In 2016, mobile is expected to generate more revenue for telcos than fixed-line offerings for the first time. Last year landline connections brought in $2.58 billion, down from $2.93 in 2007/8, while mobile revenue has risen from $2 billion to $2.54 over the same period.

But the rise in mobile isn't quite offsetting the fall in fixed line revenue, with total revenues dropping for the third year in a row to $5.11 billion.

Kiwis get data-hungry as Netflix effect kicks in

Infographic showing some of the data (Commerce Commission/supplied)

The Commerce Commission expressed surprise that copper broadband packages are actually $4 more expensive than they were in 2014, despite a drop in wholesale costs.

"We are keen to better understand the drivers behind this price rise and will keep an eye on competition in this particular market. It will pay for consumers to shop around," says Dr Gale.

Telcos warned of higher copper broadband prices last year, after the Commerce Commission raised the price Chorus could charge retailers to use its network.

Chorus charges $41.19 per retail customer, a price set by the Commerce Commission. Until December 2014 it could charge $44.98, and between then and December 2015, $34.44.

Telcos had set their prices assuming the new cost would be about $39, as previously indicated.


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