Broadband deficit grows bigger

Broadband deficit grows bigger

Media Release – InternetNZ – 13 April 2006

New Zealand's broadband deficit compared to the rest of the world has got worse. The latest OECD statistics have shown that it will be next to impossible for the Government's goal to see New Zealand’s uptake reach that of the OECD's top half by 2007 and top quarter by 2010.

"Our projection, based on the OECD data, is that the Government looks set to fall around 900,000 subscribers short of its broadband target. This broadband deficit can only be tackled by a serious commitment to reform," said Keith Davidson, Executive Director of InternetNZ.

"Worse, our nearest neighbours have begun to move ahead – Australia has risen from 21st in the OECD a year ago to 17th place. New Zealand remains stuck at 22nd.

"Obviously local loop unbundling on its own cannot resolve this issue. InternetNZ has already outlined a broad set of proposed changes: all of them need to be pursued to make sure the target becomes viable.

New Zealand currently has 330,000, or 8.1% of the population, on broadband. A simple linear trend analysis based on the 2003, 2004 and 2005 data projects that to make the top half of the OECD by 2007, New Zealand will need around 980,000 broadband subscribers. And to make the top quarter by 2010 the projection is that half of New Zealand, or just over two million residents will need to be on broadband.

Applying the same analysis to New Zealand's broadband growth over the last three years, the 2010 projection is for NZ to have only 1.1 million broadband subscribers - leaving a 900,000 connection deficit.

"The economic ramifications of such a deficit are extremely serious. If New Zealand does not resolve this broadband uptake problem, our economy will slide. Useful broadband is a vital baseline technology for future economic development.

"The consequences of no action will be to leave New Zealand down the bottom of the developed world with Mexico, Turkey and Eastern Europe. That will be a loss for business, a loss for consumers and a loss for New Zealand," said Mr Davidson.

"Many might blame Telecom for this situation, but it is not Telecom's responsibility to deliver better broadband. That company is simply pursuing its shareholders interests in the current regulatory environment. The regulatory environment is what needs to change, and that is Government's responsibility – and the onus is on the government to ensure that the results of the stocktake process underway now allow for a more competitive environment for all players," Keith Davidson said.

ENDS

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