NZ lagging behind in broadband uptake

By CHRIS BARTON

New statistics on fast internet takeup show New Zealand falling further behind Australia in the race to get broadband telecommunications.

Both countries are laggards in broadband uptake compared to the powerhouses of South Korea, Taiwan and Japan, but growth figures from the DSL Forum show Australia is about to leave New Zealand in its wake.

Australia's growth from the second to fourth quarter of last year in DSL broadband (fast internet over existing copper lines) was 62 per cent compared to New Zealand's 21 per cent. For the year, Australia's DSL line numbers surged 174 per cent while in New Zealand growth was 55 per cent.

The difference is illustrated in the accompanying graph, which shows close to exponential growth in DSL line usage over a two-year period in Australia compared to steady but unspectacular growth in New Zealand.

One explanation is that Australia's growth in DSL is due to increased competition and a result of the decision in 2000 to open up (unbundle) Telstra's lines monopoly.

However, Telecom enjoys monopoly control and can afford a more managed approach to DSL demand.

Looking at the global picture on broadband uptake, neither country is a stand-out performer.

At the end of last September, Australia had 610, 800 broadband connections with just over half of those (333,000) as DSL lines and the rest mainly cable services. That gives just 3.1 broadband connections for every 100 Australians.

The New Zealand numbers are worse. At the end of last year there were 87,000 Telecom DSL lines and an estimated 8000 additional broadband connections - the bulk of which are TelstraClear cable customers. That means only 2.4 broadband connections for every 100 New Zealanders.

Japan, which fast-tracked unbundling, has 8 per cent penetration per head of population for DSL lines alone. Taiwan is at 12 per cent and South Korea 13 per cent, not counting cable services.

For DSL connections, Telecom fares slightly better than Telstra with 4.9 per cent of its 1.765 million available lines used for DSL compared to 4.4 per cent (466,700) of Australia's 10.59 million. But the Telecom figure includes at least 30,000 Jetstart customers which operate at a sub-broadband speed of 128Kbps over DSL lines.

Other factors that may explain the low adoption of broadband Downunder are the relatively high costs of the services in both countries - although both Telecom and Telstra have in the past month introduced price reductions.

Both include monthly download caps on most of their services, which is likely to have a chilling effect on consumer uptake.

Graeme Samuel, chairman of Australian consumer watchdog ACCC, said he was concerned about internet providers advertising "unlimited" broadband services.

" The ACCC wants to ensure that consumers are not misled by claims that services are 'unlimited' when in fact there are limitations, such as time limits, download limits and excess download costs," he said.