Technology Nov 2007
Broadband barriers down
Broadband users were close to overtaking dial-up subscribers as 2007 drew to a close, with changes and challenges in the telecommunications industry clearly indicating the development of the Internet in New Zealand had reached an important watershed.
However 750,000 fast Internet subscribers was still a fat chance away from the two million needed to hit the Government’s target of entering the top half of the OECD broadband statistics by 2010.
Telecommunications Amendment Act of December 2006 had firmed up plans
for local loop unbundling (LLU) allowing competitors full access to
Telecom’s network, forcing the split of the company into network,
wholesale and retail arms. The
operational separation of Telecom was to be completed no later than 31
According to IDC Research, Telecom had migrated 605,000 or 71 percent of
its Xtra customers to broadband by the end of June, with 238,000 left on
dial up. Telecom had already opened up the throttle on wholesale
broadband for Internet service providers (ISPs), who could now offer the
maximum speeds the country’s copper cable could cope with.
Serious investment – possibly several billion dollars - was needed to get the country back on the developed world broadband map, and to achieve equitable access for the rural heartland. Two major surveys warned rapid roll out of fibre optic cabling was the only way to meet the needs of the future, keep up with international business competitiveness and deliver new services such as video-on-demand and IPTV.
Within weeks of the reports being made public, Telecom agreed to accelerate its next generation network (NGN) plans; it would invest $1.4 billion to ensure speeds of at least 10Mbit/sec to 80 percent of New Zealanders and up to 20Mbit/sec to 50 percent of the population by 2011.
The undertaking applied to all towns with 500 or more phone lines and formed part of a legally binding commitment to the Government, with Telecom facing fines of tens of millions of dollars if it failed to comply.
Meanwhile there was growing pressure on the Government to step in and take the lead by encouraging more private sector investment in fibre, including making its own billion dollar contribution to get the country out of the broadband doldrums.
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