NZ broadband performance rises, ISP gap widens

NZ broadband performance edges up, gap between ISPs widens

By Paul McBeth

July 3 – The quality of New Zealand’s broadband services edged higher in the first three months this year with new investment in the network by internet service providers (ISPs) in local caching or improved backhaul services. The gap between the best and worst-performing ISPs widened.

The Commerce Commission’s quarterly report on broadband quality found overall performance had improved some 4% in the first quarter, as the top ISPs injected more money into storing popular international and national content locally. Telecom’s wholesale arm increased the bandwidth available on its local backhaul routes, the links that allow the phone company’s competitors to provide landline and broadband services, which helped boost ISPs’ performances.

“Performance appears to be closely related to investment in network facilities,” the report said of the widening gap between service providers. This is in spite of “the fact that many use wholesale services infrastructure from Telecom,” it said, referring to the telecommunication company’s backhaul routes.

The survey was conducted by Eptiro analysts at IDC, who concluded that the rapid growth in broadband traffic meant ISPs will have to focus on “optimising the network and provisioning capacity for the quarters to come.”

Commerce Commission telecommunications branch director Osmond Borthwick said the report showed “some ISPs have been putting in work behind the scenes to boost broadband performance.” Still, there was a “lack of sufficient capacity” on connections which will be a “major constraint” on future improvements to network speeds, he said.

The report also said some ISPs turned interleaving, a data management setting, off as a default, which helped boost broadband performance, though at the risk of reduced stability.

The report excluded TelstraClear Ltd.’s cable and digital subscriber line, the technology that allows broadband to be delivered over a copper line, after it was found the plan being measured wasn’t what the company considered its premium offering.

Similarly, Vodafone New Zealand’s retail services through its unbundled lines aren’t measured in the survey, and the report doesn’t capture the “full impact of Vodafone’s fixed line investment in the Auckland region”

The report said Orcon Internet Ltd. had almost completed a significant network upgrade, but hadn’t started caching content, while CallPlus Services Ltd., the owner of Slingshot, had invested in caching popular national and international content locally and had left interleaving off as a default for more than a year.

Over 20% of New Zealanders have a broadband subscription, and the nation ranked 19th on the OECD’s June report into broadband uptake, and improvement from 26th place in the 2006 June report.

Last month, the regulator reiterated the sub-loop prices Telecom Corp. can charge its competitors for access to its unbundled copper service. The combined cost per customer is some 26% more than access to local loop unbundling, and sparked criticism from Vodafone and Orcon.

Shares of Telecom, the largest listed phone utility on the NZX, slipped 0.4% to NZ$2.65 today.

(BusinessWire)