Bonus in 2.1pc take-up rate

By ADAM GIFFORD

Taranaki councils won't have to pay Telecom anything for upgrading exchanges in the region because of a better than expected take-up of its broadband services.

The New Plymouth, Stratford and South Taranaki District Councils would have faced a $566,000 bill if Telecom had not met its commercial targets.

But it has sold more than 700 new JetStream and JetStart connections since upgrades of 15 exchanges were completed last August, bringing the total connections for the region to 1300, or 2.1 per cent of those able to access the service.

Dudley Enoka, Telecom general manager regional sales, said that over the past year the cost of digital subscriber line (DSL) broadband technology had dropped sharply, meaning smaller exchanges could be upgraded relatively cheaply and DSL-based broadband pushed further out.

"That means we will probably not need underwriting agreements like we had in Taranaki, because we can now make the economics stack up."

To use JetStream or JetStart, people must buy a DSL modem, pay a monthly Telecom access charge and internet service provider fee as well as charges for any data over a pre-set monthly cap.

Enoka said the growth showed people could see the advantage broadband offered despite its price.

"The highest penetration is in the business market. In some places over half the business community have broadband connections because they can see that the advantages and cost justify the service."

Anthony Stenning, of Venture Taranaki, which is working with Telecom to promote broadband use, said the 2.1 per cent take-up was the highest broadband use for any provincial centre.

He dismissed suggestions that the service was too costly, resulting in the take-up rate being below many of New Zealand's trading partners.

"When we first got on the internet 15 years ago by going through the polytech here to the one gateway at Waikato University, we were spending $200, $300, $400 a month to ship extremely small amounts of information."

He also rejected criticism of Telecom's data limits which encourage most home users, including himself, to opt for the relatively slow JetStart option.

"Speed is not everything. There is a lot of hype about speed, but the always-on part of the connection is far more valuable than people realise."

Stenning said the broadband service was helping business growth.

"The region is seen as progressive. Just in the last couple of weeks we have had people come in who have migrated from Australia, saying their knowledge of broadband in the area brought them here," he said.

"The next stage will be wireless. Who supplies it is not so much in our hands as those running Probe."

Probe, the Government's Provincial Broadband Extension project to get broadband to schools and remote communities, should announce within the next couple of months preferred vendors to supply services in each region.

Telecom has joined state-owned BCL to bid for Probe finance.