Summarised from the NZ Chapter of the Digital Review of Asia Pacific 2009-2010, written by Paua Interface Ltd's IT consultant Robyn Kamira.
There is still a fair amount of terminology in the text so be warned it is not for the faint hearted. But for those who have the very basics it should provide a useful background.
Telecom New Zealand (telecom.co.nz) owns most of our technological infrastructure. Some have said that its monopoly accounts for poor performance and a poor competitive environment. However, recent government interventions are changing the situation and competition and new services are emerging.
Backhaul is transporting traffic across to centralised sites and typically for New Zealand, that means across oceans. Backhaul allows is to connect to the rest of the world when we go online.
The only backhaul service to New Zealand is the Southern Cross Cable Network (www.southerncrosscables.com), a submarine network providing international bandwidth between Australia, New Zealand, Hawaii, and the US.
As at 2007, the cable is owned by Telecom (50 percent), SingTel Optus (40 percent), and Verizon Business (10 percent). Upgrades were said to increase the capacity from 240 Gbps to 860 Gbps by the end of 2008.
A second submarine cable network is planned for 2010 between government-owned Kordia and Pipe International, and is said to provide competition and a diversity of routes in the event of catastrophic failure of existing networks.
New Zealand’s Internet Service Provider (ISP) market is dominated by Telecom’s Xtra and TelstraClear (www.telstrac lear.co.nz). The two companies control 75 percent of the broadband and 78 percent of the dial-up markets.
In 2007, the total population was 4.26 million and there were 57 ISPs with 1,505,100 subscribers. Some more figures:
* 71.6 of 100 people have access to a computer
* 92 of 100 households have fixed line telephones
* 86.2 of 100 people are mobile phone subscribers
* 69 of 100 people are internet users
* 31,400 domain names are registered under .nz
* 35.5 broadband (high speed internet access) subscribers out of 100 people
* Internet domestic bandwidth (the rate of data transfer measured in bits per second) is 7.6 Mbit/s (maximum speed DSL download, Mar 2007), 2 Mbit/s (maximum speed DSL upload, Mar 2007)
There is little investment in fibre-to-the-home (FTTH) or premises, a high reliance on ageing copper cables (telephone lines), and performance issues with backhaul networks.
Over land terrestrial broadband access is available to 95 percent of homes, but subscriptions — 16.5 for every 100 households — are well below the OECD average, with New Zealand ranking 20th out of 24 countries.
Digital Subscriber Line (DSL) or copper is the most common connection technology for broadband, but fibre (glass or plastic fibre that carries light) speeds outshine all other technologies, including DSL, cable, and wireless, by a factor of 60. So, the high proportion of DSL services is a disadvantage if higher broadband speeds are required en masse.
Most broadband plans have data caps or allowances that restrict the amount of content that can be sent before additional charges apply. Exceeding the data allowance results in either a drop to a speed of 64 kbit per second or a charge per MB/GB over a limit. This is unique to New Zealand.
In 2008, TelstraClear (owned by Australia’s telecommunications company Telstra) has been investing heavily in infrastructure, laying fibre networks in several cities, and building a fibre backbone (like a trunk line or a core network) through the country.
At the entry level in 2008, TelstraClear offered 1 GB of data and 2 Mbit per second both up and down — five times more data, eight times faster download speed, and 16 times faster upload speed for a similar price at Telecom’s entry level.
The country’s main cellular service providers are Telecom and Vodafone (www.vodafone.co.nz). There are 4.25 million subscribers, just .01 million short of the total population of New Zealand, so the market is approaching saturation.
In 2007, Vodafone had a 53.7 percent share of the market, and Telecom had about 49 percent market share. New player NZ Communications (previously Econet) plans to offer another mobile service in 2009 but this date may be delayed.
Overall, New Zealand’s cellular service prices ranked in the third quartile of the OECD.