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Paull Budde: Australian Broadband And The OECD

Australian Broadband And The OECD
Paul Budde Communications

It is amazing what happens with statistics. If they agree with the government’s position they are praised and welcomed, but if they are not they are rejected.

The latest set of broadband stats from the OECD is no different from the previous figures – and there are several areas that are very questionable; but this time they work in favour of the government, so they are being applauded.

A year ago we began reporting that, in accordance with our long-term predictions, penetration in New Zealand was beginning to catch up with the rest of the world, and this, of course, was confirmed by the OECD figures. New Zealand ranked 20th out of the 30 nations survey, equating to 683,000 broadband users as at June 30th. Despite some good progress, New Zealand still has some catching up to do to bring penetration on par with Australia, which ranked 12th out of 30 nations.

We also stated that while this was happening the rest of the world was improving network quality, achieving higher speeds which allow for more video-based services including e-health (video nurses for aged people, video monitoring of patients at home), smart grids (energy savings) and entertainment.

This is where New Zealand is still very much lagging – in terms of average download speed and of cost. But this is certainly not accurately reflected in the OECD rankings.

The figures for average advertised download speed are meaningless. New Zealand ranked 5th out of the 30 nations with an average advertised broadband download speed of 13.6Mb/s, but who is actually getting that speed in New Zealand??!! It’s great that such speeds are possible, but they are only available to a very small section of the population. Without widespread ADSL2+ or fibre access true average download speeds are significantly lower than those in Europe, Japan, Korea, North America etc, where those networks are far more widely deployed.

It is unlikely that Local Loop Unbundling (LLU), which is scheduled to be rolled out in New Zealand from the beginning of 2008, is likely to have any impact at all, any time soon. You only have to take a look at Australia, which has had LLU for several years, but still has only limited availability of faster speed ADSL2+ services. Having said that, the move towards the Operational Separation of New Zealand, as outlined in the latest government reforms, should speed things up to some degree by giving more equitable wholesale access to Telecom’s network, however Telecom’s Next Generation Network is still scheduled to take another four years to complete, and even if some of Telecom’s competitors like ihug and Orcon begin offering ADSL 2+ via DSLAM rollouts in 2008, this will only be on a limited scale and it likely to take several years before Telecom will be offering ADSL2+ services on a national scale.

A further negative for New Zealand is that it is also one of the few OECD countries in which every broadband operator surveyed by the OECD was found to impose data or bit caps. This severely hampers the uptake of more interesting applications in healthcare, education and entertainment, as these applications are feature rich and do require more data capacity.

Content and service providers are reluctant to build these new innovative applications because if users go beyond their cap, they must pay additional fees or have their services slowed to a snail’s pace, which of course would defeat the whole purpose of these new services. So in this way, we do keep our users ‘dumb’ and we certainly don’t allow the country to fully utilise the many social and economic benefits that broadband has to offer.

Exhibit 1 – New Zealand rankings in global OECD broadband survey for year ending June 2007
Average monthly subscription price
NZ – (16th most expensive out of 30) USD$48.66

Average monthly price per Mb/s
NZ – (15th most expensive out of 30) USD$16.75

Average advertised broadband download speed, by country, Mb/s
NZ (ranked 5th fastest out of 30) 13.6 Mb/s

Who is actually getting that speed in NZ? Broadband penetration
NZ: ranked 20th out of 30; (16.5 inhabitants/ per 100) Penetration more than doubled in previous 12 months Equates to 683,000 users as at June 07
DSL coverage 93%
(Source: BuddeComm based on OECD broadband survey)

Exhibit 2 – Australian rankings in global OECD broadband survey for year ending June 2007
Average monthly subscription price
Australia – (12th most expensive out of 30) USD$52.26

Average monthly price per Mb/s Australia – (8th most expensive out of 30) USD$21.34

Average advertised broadband download speed, by country, Mb/s Australia (ranked 9th fastest out of 30) 12.1 Mb/s

Who is actually getting that speed in Australia? Broadband penetration
Aus: ranked 12th out of 30; (22.7 inhabitants/ per 100) Penetration more than doubled in previous 12 months Equates to 4.7 million users as at June 07
DSL coverage 81%
(Source: BuddeComm based on OECD broadband survey)

See also, separate reports:
New Zealand - Broadband - Statistics, Overview & Providers
New Zealand - Wireless Broadband - Statistics, Overview & Providers

*************


PAUL BUDDE Communication Pty Ltd,
T/As BuddeComm
http://www.budde.com.au

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