• Home
• ICT
• Telecommunications
• Benchmarking
• Mid-2006 Report
• Broadband Internet Access ...

• Telecommunications

• Benchmarking

• Mid-2006 Report
• Comment on NZIER Report
• Media Statements
• Archive

Overall Uptake of Broadband Service

30. New Zealand has good terrestrial based broadband access availability to ~95% of dwellings. This compares favourably with other OECD countries. Most broadband access in New Zealand is through DSL on the existing copper local loop.

31. The following table reports broadband connections in OECD as at June 2006. Broadband Internet access service uptake in New Zealand was 11.7% per 100 people. New Zealand's overall relative ranking remains 22nd out of 30.

OECD Country Broadband Subscribers Per 100 Inhabitants, by Technology, June 2006

32. Residential broadband household uptake will in general follow the well known s curve. On this measure the leading OECD countries are approaching saturation while others are still in take-up phase. From the residential user perspective, household take-up of broadband service is a more meaningful residential user measure than broadband subscribers per 100 population that also includes both residential and business users.

Household Take Up (Percent over Time)

Business Broadband Service Pricing

33. In the absence of an internationally agreed business broadband benchmarking methodology, the Ministry commissioned a consultant to develop an appropriate business broadband service benchmark specification taking into account typical small business needs and seek comments from ISPs on the draft recommended specification. The consultant also sough industry comment on the proposed benchmark.

34. Two specifications were recommended for benchmarking small business broadband services.

Asymmetric Small Business Internet Service

35. The first is a small business Internet service for general use:

36. The first definition was used to compile the following relative performance rankings for small business Internet for suitable for general use.

Prices of Small Business Internet Access Service Per Annum (Excluding Tax)

Larger version of "Prices of Small Business Internet Access Service Per Annum (Excluding Tax)" [27 kB PDF]

37. The price of business broadband service in New Zealand was ranked 15th across OECD countries, close to the median OECD value and ~77% of the OECD average. It would need to reduce by ~52% to rank in the top quartile.

38. There has been a significant improvement in relative performance since 2005 when the ranking was 27th out of 28 OECD countries.

Symmetric (or Equivalent) Small Business Internet Access Service

39. The second definition is a small business Internet access service where there are high outgoing speed and volume requirements (i.e. use of symmetrical DSL technology or similar to maintain a web site etc.)

40. At present this type of SDSL based service offering is available in about 13 of the 30 OECD countries.

41. The nearest available Telecom New Zealand equivalent is a One-Office service option. However, the price for such an option was not available (because One-Office provides a range of different services for a bundled price and identifying the price of an individual component was not possible).

42. The Ministry intends to further develop this benchmark in future years in conjunction with the IP based data service replacement benchmark requirements (see leased line data services benchmark section of this report).

Residential Broadband Internet Access Service Pricing

43. In the absence of an internationally agreed residential broadband benchmarking methodology, the Ministry also commissioned a consultant to develop an appropriate residential broadband service benchmark specification. Two specifications were recommended for benchmarking residential broadband services, the first one an Internet access service the second was the progressive development of a "multiplay" broadband service specification. The consultant also sough industry comment on the first benchmark.

Residential Broadband Internet Access Service Benchmark

44. The following benchmark specification was recommended:

45. The results for this benchmark specification across OECD countries are presented in the following graph. The results were based mainly on the Point-topic data base.

Prices of Residential Internet Access Service Per Annum (Excluding Tax)

Larger version of "Prices of Residential Internet Access Service Per Annum (Excluding Tax)" [24 kB PDF]

46. Upstream speed issues aside (at the time of the survey New Zealand did not meet the 256 kbps requirement³), the pricing performance of residential broadband services ranked second in the OECD, at ~36% of the OECD country average, for this New Zealand specific benchmark comparison specification.

47. In general, most mid-range DSL-based residential user broadband plans in other OECD countries provide an upstream speed capability of 512 kbps.

Residential Multiplay Broadband Service Offerings

What Is a "Multiplay" Service

48. So called "multiplay" broadband services are now available in a number of OECD countries. These types of broadband services provide two or more of the following services over the single broadband connection:

• Internet access;
• a PSTN grade VoIP (voice over IP) calling service;
• real time video programmes (IPTV);
• WiFi based mobile to fixed network calls over compatible broadband enabled connections.

49. The most commonly available multiplay packages are:

• Internet plus VoIP based calls bundled with a traditional cable or satellite TV package (North America).
• Internet plus IPTV bundled with either a traditional PSTN or a VoIP based calling package (Parts of Europe).

50. In the absence of an internationally recognised approach to benchmarking prices for multiplay broadband service packages the Ministry intends to progressively develop a suitable approach to track New Zealand's progress in providing such services.

51. At present such packages are not generally available to residential users in New Zealand.

52. The capability of multiplay broadband services is briefly outlined in the following summary of OECD country service developments and features.

Multiplay Broadband Service Developments

53. There are a wide range of service and pricing developments occurring in OECD countries as ISPs, new entrants, cable operators and telcos begin to bundle voice and data and voice and video services. For example, an emerging trend throughout the OECD is for operators to charge a monthly flat rate for PSTN calls. Telecommunication and cable operators have found that this is one way to keep users from dropping fixed lines in favour of mobile phones. Many of these flat-rate plans are available separately from a broadband connection while others, such as the offer from Free in France and Homechoice in the United Kingdom, must be taken with a bundle of services.

54. There are other interesting trends for voice pricing appearing in the OECD. Companies in Sweden have moved away from charging users by the minute for calls and instead charge a connection fee when a call is answered. With TeliaSonera this service costs US$3.20 (PPP) per month and users pay roughly US$0.05 (PPP) per call. Telenor in Norway and TDC in Denmark also have cheap flat-rate calling plans but restrict users to call durations of one hour.

Example of a Leading Multiplay Service Offering (Free's Service Offering)

55. Free, a LLU based provider of broadband services in France, offers a quadruple play service priced at €29.99 per month (~NZ$60) with or without the France Telecom PSTN service connection. The set top box is provided free of charge.

56. The LLU based full broadband service currently offers:

• Internet access at up to 24 Mbps download and 1 Mbps upload;
• access to Freebox TV audiovisual services (over 200 television channels, 100 of which are free-to-air channels);
• unlimited calls, using the Freebox, free of charge to fixed lines in: Germany, Austria, China, United States, Israel, Netherlands, United Kingdom, Australia, Canada, Spain, Ireland, Italy, Portugal, Singapore, including calls to mobiles in the United States and Canada;
• CanalPlay based video-on-demand service offering catalogue films at €1.99 each for 24 hour viewing and new releases at €2.99 each.
• Free directory enquiries service;
• Customisable Ring Back Tone (up to 10 distinct ring tones for different callers);
• make and receive calls from any computer connected to the Internet, anywhere in the world, using the Freebox telephone account (with any SIP-enabled equipment/software);
• make calls from a mobile/WiFi phone at the Freebox call rates (including unlimited calls to landline phones in mainland France and 14 international destinations). The mobile phone must be within the WiFi range of an HD Freebox and support either single-band WiFi, dual-band WiFi/GSM, WiFi/GPRS, WiFi/3G.

Multiplay Broadband Service Features

57. In the US a range of advanced features are being offered with broadband VoIP based call offerings as follows:

• AT&T CallVantageSM Service - converts voice into data that enables you to place and receive calls over your broadband connection. Plug in between the computer and the Cable or DSL Modem, and plug in a standard household telephone. Place and receive calls - with access to additional control through the Web browser.
• Personal Conferencing - Set up a "meeting room" with up to ten callers on the same line.
• Do Not Disturb - Receive calls only when you want. Forward calls to voicemail but let urgent calls ring in.
• Voice Mail + eFeatures - See and hear messages via the Web or through your phone and forward voice messages to your e-mail account. E-mail tells you when you have a message. Forward voicemail as an e-mail attachment.
• Call Logs - View a list of calls you placed and received, click on any number to automatically dial.
• Phone Feature Manager - Phone in to access AT&T CallVantageSM Service even when you don't have access to the Web. Follow prompts to make outbound calls or access Voice Mail + eFeatures, Locate Me, Speed Dial, and Do Not Disturb.
• Locate Me - Set your service so callers can find you at other numbers when you're not at your phone. Choose several locations and have them ring either one at a time or all at once.