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2009: Speed boosts and mobility
2010: Tablets & social media
2011: Ultrafast kickstart and mobile momentum
A recent growth spurt put New Zealand in the top three fastest growing OECD nations in broadband uptake, although our data caps are still seen as a major impediment to growth. While three quarters of Internet subscribers are on broadband, New Zealand remains one of four OECD nations with per megabyte charges when users exceed data caps or get shut down to dial-up speeds.
The OECD says half our broadband subscribers still have data caps of 5Gb or less, which is seen as a major impediment to future growth, although StatisticsNZ suggests we’re improving, with those expanding their ceiling to 20Gb tripling to 126,000 by June 2009. StatisticsNZ says broadband subscriptions rocketed ahead by 27 percent in the year to June, with a million New Zealanders now on broadband. This compares with 891,000 in 2008 and 475,700 in 2006. In the year to June about one fifth of users; around 220,000, were using mobile data cards, cable or satellite technology for broadband, up 53 percent on 2008.
Meanwhile New Zealand continues to inch its way up the broadband rankings to 18th place out of the 30 OECD countries, up 3.7 percent on the last survey. In the previous five years New Zealand has waltzed around the 19-20 mark.
stepped in to stimulate competition and help improve the
business case for ultra-fast broadband, when private
sector carriers decided not to invest in fibre-to-the home. The plan is
to deliver ultra-fast broadband over fibre to 75 percent of New
Zealanders within the next decade by laying fibre optic cable
as close as possible to homes and businesses. It has
committed to a regional partnership with private sector
companies bidding for the $1.5 billion business to boost
broadband speeds to a potential 100Mbit/sec In the first six
years it will prioritise fibre direct to businesses, schools and
The final ‘goodnight Kiwi’ decision on analogue broadcast frequencies will be made in 2012 or when digital uptake reaches 75 percent, whichever comes first. In fact the number of digital subscribers, those using Freeview and SkyTV, is already at 60 percent and rising. Last count Freeview, the consortium of free-to-air channels designed to ease us off analogue, had over 300,000 viewers, including 113,936 with FreeviewHD personal video recorders (PVRs), while Sky TV had more than 778,902 subscribers, including 120,000 using its MySky boxes. The speed of adoption for digital TV in New Zealand is well above average for nations who’ve made the transition.
The recent growth in Freeview is partially due to the addition of new channels. After government mediation; Sky TV and Freeview reached a compromise so access Prime — owned by Sky TV — following a deal for State channels TV6 and TV7 to be on Sky. TV1 and TV2 are also in high definition for MySkyHDi viewers, true to TVNZ’s mandate to be ‘inspiring on every screen’.
Wholesale introduced the All of New Zealand Offer
bundling broadband, phone line and backhaul
services to its wholesale customers, who would In turn offer
them to end users as ‘loyalty' incentives. These
discounts of between 20 - 30 percent locked customers into a
two-year deal, and in turn required the service providers to
retain 90 percent of current and future customers with Telecom.
Telecom raised the monthly line rental for residential fixed line phones by $1.50 from 1 April to bring it into line with inflation, making the average cost $46.35 per month, TelstraClear raised its line rental for resold Telecom lines from $49.99 to $51.65 per month,
In response to agreements with the government to try and avoid legislation for fixed to mobile termination rates Telecom lowered its residential fixed-to-mobile calling rates by two cents per minute and Vodafone lowered its calling rate by 1.2 cents per minute. This coincided with a drop in the wholesale fixed-to-mobile termination rate by one cent per minute from 16 to 15 cents per minute which the carriers were required to pass on to users. Vodafone introduced a new data plan giving mobile broadband prepaid customers half a Gb of data for $40.
Orcon entered the business fixed line market Including free local calls in areas where it had access to the unbundled Telecom network. TelstraClear completed a 40 Gbit/sec second link between Wellington and Christchurch offering one path by land and another by sea delivering a full back-up capability for its customers and increased capacity to meet broadband demand. The company claimed to have signed up 41 percent of all new fixed line broadband connections in the six months to 31 December 2008. CallPlus announced it would become a mobile virtual network operator (MVNO) in August using Vodafone’s network.
May: Orcon cut staff numbers by 16 percent, laying off 23 employees anticipated a challenging year ahead. Woosh announced a partnership with Telecom Wholesale that will allow It to provide fixed-line home phone and broadband bundles including free voice mail and start at $69 per month with one Gb data. Vodafone and Telecom reached an out-of-court settlement in a dispute arising from interference between Telecom’s new 3G mobile network and Vodafone’s existing network. Telecom agreed to install filters, delaying its XT network launch date. Compass Communications started offering mobile phone plans from $15 per month with calls at 25 cents per minute for its residential customers.
NZ Communications Limited rebranded itself as 2degrees and announced it would launch its mobile network in August 2009. 2degrees stated that it will ultimately provide a mixture of 2G and 3G services running on 900MHz, 1800MHz and 2100MHz frequencies. Vodafone, on 28 May, completed its 3G mobile network extension to cover 97 percent of the population with the date bought forward by a year to compete with the launch of Telecom’s XT network. Vodafone claimed it had 500,000 customers using 3G handsets, which are capable of downloading music, pictures, and making use of other high-speed data services through the mobile handset.
June: TelstraClear and Vodafone raised their residential line rental. Telecom reported customers using Facebook on their mobile phones had increased by 700 percent since January 2009. Vodafone started offering Sky TV to its fixed line customers. The price is the same as charged by Sky but everything is on one bill. Telecom ceased offering discounted Sky bundles in May 2008 and existing customers of those bundles had them grandfathered. The Commerce Commission released its decision on the terms Telecom must make unbundled sub-loop services available to other telecommunications providers. The monthly rental charge set for access to the sub-loop unbundled copper local loop service was $11.99 per line in urban areas and $22.14 per line in non-urban areas. there were additional charges for sub-loop co-location and sub-loop backhaul services. While the costs were 26 percent higher than expected the commission believed service providers could provider customers higher-value services. The Commission also recommended in its draft report that mobile termination prices be regulated.
Wholesale implemented its All of NZ Offer In the main regions
with discounted wholesale broadband and phone line bundles.
TelstraClear signed a three-year MVNO agreement with
Vodafone, but it will retain its Telecom CDMA agreement
until Telecom closes that network. Telecom started
offering a $600 credit to entice Vodafone’s iPhone customers
to switch. The offer gave 240Mb of free data each month for 24
months to any user who signed up for the $79.95 a month dedal on
a 24-month contract.
The IOG reached the view that Telecom Wholesale’s loyalty offers (the All of NZ Offer and the Regions Offer) constituted a breach of Telecom’s Separation Undertakings and launched an investigation.
September: Vector will provide high speed fibre optic connections to all the new houses and buildings to be constructed at the Government's Hobsonville project in Auckland. Kordia is pleased with the progress on the development of its project to deploy a trans-Tasman submarine cable.
October: Telecom introduces fixed-to-mobile calling caps for residential customers purchasing its bundled plans - customers calling Telecom mobiles can talk for up to two hours and pay no more than $2 or $2.50. Vodafone moved over 100 customers onto HSPA+ high-speed 3G broadband which was available across multiple 3G cell sites in and around Auckland’s CBD. TelstraClear launched its nationwide local loop unbundling programme two years after Orcon and Vodafone started their rollouts, which were largely limited to Auckland. This initially gave TelstraClear access to over 220,000 homes and businesses connected to 23 exchanges in Auckland and 19 exchanges in other urban areas. A further 27 exchanges were to be added later in the year. Phone and broadband packages were priced from $79 a month.
November: TiVo set-top box for recording TV programs was launched allowing Telecom customers to download movies and shows to their TV over their broadband connection without Impacting monthly data caps.
December: Fibre only connections were being rolled out for the first time by Telecom’s network arm Chorus at a new residential subdivision in Grenada in Wellington. Customers have to buy the retail service from WorldxChange as Telecom does not yet have such a service. Unison Fibre lit the first fibre optic cable on its new Hawke’s Bay fibre route that is planned to link Napier and Hastings, and later Havelock North other areas of Hastings and central Napier as well as Rotorua and Taupo.
According to IDC Research figures for the June 2010 quarter showed local PC sales in excess of $291 million up about $50 million on the previous year. Hewlett Packard remained the leader with 36 percent market share, followed by Acer and Dell, essentially mirroring the international market. While the total PC sales grew nearly 31 percent over the 2009 year, Apple’s growth was more than 70 percent with its desktop and notebook sales accounting for 20 percent of total market growth. That was before the iPad arrived.
Exponential demand for high speed data including online video services is highlighting the urgent need for enhanced digital subscriber line (DSL) technology and fibre to the home, although there may be some speed bumps along the way.
Telecom planned to begin migrating from the existing public switched telephone network (PSTN) to full digital internet telephony at the end of 2010 but trials showed a range of devices would stop working. Although converters could helping some cases other legacy equipment including low end dial up modems, hundreds of thousands of fax machines, eftpos terminals, security and medical alarms and even some earlier TV set-top boxes could become useless. Telecom has asked for more time to sort out what it considers is an industry problem. The staged migration to the full next generation network will occur between 2012 and 2020.
New Zealand had 1.3 million broadband subscribers in the year to June 2010, up 15 percent on the previous year, according to Statistics NZ in its annual Internet Provider Survey. While DSL accounted for three-quarters of all broadband use, growth had slowed since 2007 with cellular, cable and satellite access up by one third.
The survey released in April 2010 said while rural homes were less likely to have broadband the gap was closing. In 2009, half of rural homes had broadband, compared with 1 in 5 in 2006. It found 60 percent of broadband subscribers had a data cap of 5Gb or more, an increase of 10 percent over 2009. New Zealand is one of the few OECD countries that still applies data caps. It showed 80 percent of New Zealanders used the internet, up from 69 percent in 2006; 43 percent had made an online purchase, up from 29 percent and 37 percent used the internet for social networking. In 2009, only 12 percent of New Zealand homes used a dial-up connection, half of them citing the cost of broadband as their main reason.
Mobile internet access grew only
percent to 18 percent between 2007 and
2009. However the market was expected to surge forward
with Vodafone, Telecom and 2degrees all on 3G networks
that can use the same phones and more affordable monthly and
pre-paid plans being offered.While Vodafone retained its 50 percent market share in the year
ending March 2010 with around 2.5 million customers, including
20,000 gained during Telecom’s XT’s technical glitches, it lost
25,000 in the six months to September. Churn from Vodafone and
Telecom was picked up by 2degrees which was thought to have
around 400,000 customers by year end.
January : Slingshot requires new broadband customers wanting a toll service to rent their phone line from it to get the $10 a month discount. Slingshot's new lower broadband prices, including a $24.95 a month 256kbps broadband service with 2Gb of data and a $49.95 a month full speed broadband service with 25Gb of data present a taste of real competiton.
February: 2degrees claims 206,000 active subscribers at the end of January 2010, over a quarter of these have come from other networks; 80 percent of these from Vodafone where the shift was simply a SIM card swap. Telecom’s CDMA users needed a new phone. The Commerce Commission's final mobile termination access services report to the Minister for Communications and Information Technology recommended accepting Telecom’s and Vodafone’s own undertakings to drop prices rather than regulate.
March: Northpower opened up its layer 2 fibre network in Whangarei to local retail internet service provider Xf Net which is offering voice and 5 Mbit/sec broadband service with 10Gb of data for $79 a month — with IP TV that's $99 a month. The company is also rolling out a $500,000 residential expansion to its Whangarei fibre network initially providing provide fibre to the home for 850 homes in the suburbs of Kensington and Regent.
May: It's five decades since New Zealand's first television broadcast.
June: Telecom’s XT mobile network launched in May 2009 has achieved 700,000 customers despite outages affecting parts of the network in late 2009 and early 2010. To June 2010 New Zealand ranked 17 place in the OECD broadband top 31 with 24.5 percent of the population on broadband ahead of Australia at 18th place.
According to Telecom’s end of financial year numbers, it provided just under one million fixed line broadband connections in a country of only 1.8 million telephone lines and Telecom Retail has more than 500,000 broadband customers. Its Chorus network business has installed close to 2100 roadside cabinets bringing fibre and electronics that support high-speed fixed and mobile broadband closer to many New Zealanders. By the end of 2011 it believes 750,000 customers will be directly connected to the faster fibre-fed cabinets.
Around half of homes connected to the new cabinets are within 500 metres of our fibre optic cable network and 90% are within 1km. This means the new fibre-fed cabinets will act as a springboard for all service providers to deploy copper-based VDSL2 broadband equipment, and fibre-to-the-homeAugust: The Minister for Communications and Information Technology, Steven Joyce, accepted the Commerce Commission’s recommendation to amend the Telecommunications Act 2001 to allow the regulation of mobile termination access services. The changes are effective from 24 September 2010 and set terms for access and services can be supplied.
September: Telecom-owned Chorus had laid over 3000 km of fibre enabling download speeds of at least 10Mbit/s to 84 percent of households as part of a $500 million four-year project to deliver fibre to roadside cabinets to improve broadband performance.
A ‘server glitch’ resulted in texts form both Telecom and Vodafone being delivered up to 30-hours late. This resulted in people getting out of context messages arriving often in the middle of the night. The blame was put on the server which connected the two networks texting systems.
October: The need to migrate from IPv4 to IPv6 is becoming a pressing problem as an endless array of possible uses for internet connected devices pushes the boundaries of the addresses that are available. IPv6 provides trillions of addresses but a reluctance to upgrade has left the internet industry in a quandary. The two numbering systems are incompatible so everything needs to move up a level, including communications software and networking equipment.
InternetNZ and the IPv6 Task Force are concerned the message isn’t getting through with too many large businesses in particular having no plans to address the problem. There may be a communications breakdown between customers, business partners or general internet users unless there’s widespread compliance. The benefits of adopting IPv6 however will make way for the growing number of existing and new devices and the multitude of uses that have not yet been invented as part of what InternetNZ describes as the incoming 'Internet of Things'.
According to InternetNZ and StatisticsNZ there were 1.5 million broadband subscribers, an increase of 14% in the year to June 2011. In addition to broadband, there were 1.9 million mobile phone type internet connections, not including those using data dongles on their laptops.
While many still remained on dial-up and appeared content to
remain there for the time being, all up we had
million Internet connections, which according to
InternetNZ makes us a very connected and mobile nation.
There’s been a jump in the number with plans that include 20Gb
plus data caps and increasing pressure on internet providers
to bolster or completely remote their data caps as video on
demand, replay TV and other rich content services vie for our
Some welcome competition in the undersea cable business is expected once Pacific Fibre builds its proposed $505 million undersea communications cable. It’s already signed the Crown-owned Reanz research and education network which connects local and international universities and research institutions. Reannz hoped to increase its 1Gbit/sec capacity to 40Gbit/sec and ultimately 160Gbit/sec. It would invest its own money plus $15 million from the government. Pacific Fibre hopes to make sufficient backbone capacity available to reduce international connection costs to businesses and all New Zealanders.
According to the
PricewaterhouseCoopers Media Outlook 2011 report,
State-owned TVNZ (TV1, TV2, TV7) has 45 percent viewer
market share, MediaWorks (TV3, TV4) has 18 percent and
Sky TV attracts about 26 percent of the total TV audience
through its subscription based channels and about six percent
through its free-to-air channel Prime.
February: The 70-page supplementary order paper to the Telecommunications Bill attempted to add a clause suggesting the Commerce Commission wouldn't be allowed to regulate the companies that win the Ultra Fast Broadband project for nearly a decade. That raised some serious eyebrow after years of battling to get a regulator with some teeth to ensure fair play in the industry.
March: Telecommunications Commissioner Ross Patterson told a select committee that the Telecommunications Amendment Bill, as currently worded, could make it very difficult for the Commerce Commission to police an existing requirement for the fibre-optic network to be "open access".
April: TUANZ CEO Paul Brislen and his team and others including InternetNZ weighed in at horror at the thought the Ultrafast Broadband Network would be virtually unregulated for close to a decade. Ultimately the Government backed off and allowed the Commerce Commission to continue keeping a watchful eye on proceedings. It is also now clear that those building network will have provide access to tens of thousands of kilometres of fibre-optic cable to all-comers on the same terms.
The decision came amid growing speculation that Telecom was likely to become the main contender for the UFB business as there had been a distinct lack of negotiations with alternative contenders bidding for the ‘open access’ fire roll out. Meanwhile, instead of the openly contested approach to delivering enhanced broadband to outlying areas the Government decides to hand the business for its Rural Broadband Initiative to Telecom and Vodafone.
claims prices of electronic
equipment including computers and television
sets had dropped by around 17 percent in the year to March and
judging by the frequency of sales at the big chain stores and
prices offered, that downward trend is continuing.
Connecting the Clouds - The Internet in New Zealand
are available from the author
Special discount offered on bulk copies on inquiry.
Tracking global trends in Internet use :WIP Project
Speedtest broadband comparisons: www.speedtest.net
Fibre to the home budget
InternetNZ study on the cost of fibre to the home
The KAREN academic research and education network