Mobile phone and internet company 2Degrees is starting to make its presence felt in the New Zealand market, although its market share has remained static for the 12 months ended December.
The company's owner, Trilogy International Partners, has filed its quarterly update which provides new insights into the operations of 2Degrees.
Mobile numbers for 2Degrees were up 75,000 for the 12 months, giving 2Degrees an unchanged 23% market share. Its broadband connections were up 28,000 to 58,000 in the same period, as it started pushing its Snap brand in markets outside Christchurch, particularly in Auckland.
Forsyth Barr broker Suzanne Kinnaird said with the data now available quarterly, she would be able to accurately compare the relative success of the three mobile providers in the market.
Spark was top for 2016 but quality was a factor, she said.
''If you look purely at subscriber numbers, Spark clearly took the prize, adding 141,000 mobile customers in the 12 months to December.''
However, mobile postpaid customers were key. ARPU's (average revenue per user) was about 2.5 times the level of prepaid customers, Ms Kinnaird said.
Spark's historical corporate business focus had always given it the lead in postpaid customers, just as 2Degrees' value focus had drawn a strong prepaid customer base.
If only postpaid customers added in the last 12 months were considered, Vodafone NZ was on top with 69,000, 2Degrees was second with 59,000 and Spark was third with 49,000.
As noted in Spark's first-half result, a significant portion of its mobile subscriber growth came from lower-value prepaid customers, she said.
Among the key risks for Spark was continuing price erosion. Spark had noted the impact of continued pressure in the prepaid mobile market, along with competition from Trustpower in the fixed broadband market.
Further competition following the merger of M2 and Vocus, and from Sky TV and Vodafone should be expected this year, Ms Kinnaird said.
Regarding the Vodafone-Sky TV commercial relationship, following the Commerce Commission decision not to consent to the proposed merger of the two companies, they now had incentives to look at the commercial options available to each party, she said.
Forsyth Barr had an underperform rating on Spark and a target share price of $3.40. The shares last traded at $3.40.
