NZ still a straggler in broadband race

New Zealand continues to wallow near the bottom of broadband uptake rankings despite Telecom's doubling of customer numbers in 2005, OECD statistics show.

New Zealand placed 22nd out of 30 countries - unchanged from a year ago - in the rankings, which are published twice a year.

"What this shows is just how useless all the promises we've had from Telecom are at actually making any change," said InternetNZ president Colin Jackson. "We're not getting any further."

Telecom trumpeted in February that broadband customer numbers had doubled in 2005 to 279,000. Chief executive Theresa Gattung said at the time that New Zealand had a strong broadband story and that growth was outstripping the OECD average.

Telecom said yesterday the lack of improvement in the rankings was the result of strong growth in other countries.

"It shows that it's a really big challenge to get up the ladder," said Telecom spokesman John Goulter. "We put on 72 per cent growth over the year and a lot of countries did as well, so it shows that we've got a lot of work to do."

Prime Minister Helen Clark said in February that improving broadband uptake was a key economic priority. Fast internet access was swiftly transforming the economies of more advanced countries and New Zealand was falling further behind because services here were slow and inadequate, she said.

Communications Minister David Cunliffe plans to have a review of telecommunications regulation done by mid-year. He was out of the country yesterday and unable to comment.

Broadband market observers again called on the Government to immediately intervene with strong regulatory action against Telecom. They said the only way to boost broadband uptake was through opening Telecom's phone and internet network to rival service providers, stronger regulation of wholesale services, and a structural separation of the company's wholesale and retail divisions.

"If the policy framework would promote a stronger set of competitors in the market, that's the only way we'll ever get ahead, otherwise we're going to continue to just maintain our position," said Telecommunications Users Association chairman Graeme Osborne.

"We truly believe that Telecom needs to have a separation of its network operating environment and its commercial arm."

The OECD statistics measured the number of broadband subscribers per 100 inhabitants in member countries as of the end of 2005. New Zealand had 8.1, behind Portugal at 11.5 and ahead of Ireland at 6.7.

Iceland surpassed South Korea to take top position at 26.7 while Australia maintained its 17th position with 13.8. The OECD average was 11.7.

A year ago, Australia ranked just ahead of New Zealand at 21st, but has since moved up and is growing at double the pace.

Telecom rejected the need for regulation and said its recently announced ADSL2+ services, which promise speeds up to 24 megabits per second, would eventually help boost uptake.

Telecom has said it would initially invest $150 million to $170 million in the technology, but has not committed to any dates. That has led to widespread scepticism in the industry about the announcement.

"They know they're under considerable pressure," Jackson said, and were trying to announce as many things as they could. 

 
Ranking

Broadband subscribers per 100 inhabitants, with position six months ago
1. Iceland, 26.7 (4)
2. South Korea, 25.4 (1)
3. Netherlands, 25.3 (2)
4. Denmark, 25 (3)
5. Switzerland, 23.1 (5)
22. New Zealand, 8.1 (22)