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Internet Providers Concerned About Telecom Result

Media release FOR IMMEDIATE RELEASE 4 November 2005

Internet Providers Concerned About Latest Telecom Results

The Internet Service Providers Association of New Zealand says the latest broadband results announced by Telecom today are cause for concern.

"Telecom is claiming that their latest broadband result is a success but I doubt that anyone will be fooled by the optimistic picture they paint," says David Diprose, President of ISPANZ.

Telecom has been set two targets by the government - to have 250,000 residential broadband users by December 31st; 33% of which must come from internet providers wholesaling Telecom's broadband service.

Diprose says that although Telecom has achieved the first target, it's unlikely that the wholesale target for sales from competitors will be met. Currently only 23% of broadband users have their service with a provider other than Telecom.

"The wholesale environment isn't working and something significant needs to happen if things are going to improve. In New Zealand 77% of residential broadband is sold directly by Telecom with the remaining 23% coming from competitors through Telecom's wholesale. In Australia, where access to the local loop is a viable option, the majority of broadband is being sold by competitors with only around 45% coming from Telstra - the Australian equivalent of Telecom NZ," continues Diprose.

Diprose says the target of 250,000 broadband users was too low.

"The latest OECD figures show that New Zealand is firmly stuck near the bottom of the rankings with only 6.9% of inhabitants having broadband. Telecom claims to have "powered past" 250,000 connections but unfortunately the rest of the world powered past Telecom and New Zealand long ago," he says.

ISPANZ says that it's clear that Telecom is not going to meet the wholesale target and that New Zealand will continue to suffer unless something is done about the current wholesale regime in order to create a more competitive market.

"The Minister has promised action if Telecom fail to meet the wholesale target. So we're keen to see some significant consequences that will genuinely improve competition for the benefit of all New Zealanders," says Diprose.

ABOUT ISPANZ

ISPANZ is a group of highly experienced and savvy Internet technologists and entrepreneurs who are committed to encouraging innovation and the development of information and communication technology to benefit New Zealand consumers. For more information please visit http://ispanz.org.nz.

ENDS

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