KEY POINTS:
While local loop unbundling is cutting the cost of DSL broadband, one telecommunications company believes it has found a lucrative niche targeting businesses wanting to keep working when the cheap but sometimes unreliable copper wire-based service falls over.
Telco service provider Digital Island says demand from small-to-medium businesses for a more dependable internet service prompted it to develop a service which switches customers' connections to Telecom's mobile phone data network if the DSL connection cuts out.
Digital Island general manager Blair Stewart said small businesses typically paid about $100 a month for DSL broadband which was good value for a "cheap and cheerful" connection. But the downside was that it was a service delivered without any guarantees about its availability or quality and it had no alternatives if it stopped working.
Stewart said larger businesses could afford more reliable fibre-optic internet connections, but as it cost around $1000 a month and was only available in limited geographical areas, fibre internet access was beyond the reach of most small businesses.
Businesses that couldn't work effectively without internet access had told Digital Island they would happily pay a few hundred dollars a month for a system that provided a backup if DSL went down.
From next month Digital Island will offer a technology service it calls NetDepend for $199 plus GST to its broadband customers. A NetDepend box at a customer's business will switch their internet connection to the mobile network if their DSL link stops working.
Digital Island will foot the bill for the mobile data charges the service racks up.
Stewart said the company was not aware of any other telco company offering a similar service.
While improving the quality of New Zealand's national broadband infrastructure has become a hot political topic - with both Labour and National promising to invest hundreds of millions of dollars in fibre-optic infrastructure if they win this year's election - in the short term many businesses remain dependent on the unreliable DSL network.
"Hopefully if the Government gets all its initiatives right and we start seeing greater amounts of fibre infrastructure out there and all sorts of other initiatives, then the price of those technologies will come down and businesses will generally be better off," Stewart said.
"But in the meantime there's a bit of a void there."
