24 Jan 2013

Warning of capacity constraints for mobile data

7:03 am on 24 January 2013

A telecommunications expert says the growing popularity of smartphones and tablets will spur greater demand for mobile data in New Zealand this year, but capacity constraints are building.

Paul Budde of Sydney said the sharp rise in growth in use of broadband data is only the start.

He said New Zealand has been lagging behind, but mobile broadband is taking off and there will be a further uptake and greater use of it once prices become lower.

But carriers globally are struggling to cope with the extra demand, stretching the available capacity.

Mr Budde said there's an enormous shortage of broadband capacity and the more people who are using mobile broadband in a particular area the slower the system is.

Vodafone in Australia is struggling because it miscalculated changes that are happening with the smartphone and its network is not up to scratch.

Mr Budde said the mobile network is also under pressure in places like Japan and Europe and there is simply not enough capacity.

In New Zealand, the market will be dominated by the two heavyweights, Telecom and Vodafone, now that TelstraClear has been subsumed into Vodafone, as well as Chorus's battle with the Commerce Commission over prices it can charge to use its network.

Mr Budde said the limited competition in New Zealand due to its small size means the Commerce Commission's role is crucial to keep the main players honest.

"New Zealand is a very small market, it's highly unlikely that competition will increase and therefore you do need to have a strong regulator keeping an eye on anti-competitive behaviour," he said.