There are at least 11 major competitors in the Australian broadband space, compared to around 18 in New Zealand. Has our extra level of competition resulted in keener pricing and or better services for the local Internet surfer?
No according to a recent Australian study comparing New Zealand broadband plans with those available in Australia. Whilst the study has shown that data allowances in the broadband plans of both countries has improved over the preceeding 12 months, New Zealand plans are losing value compared to those in Australia.
The Market Clarity study showed that New Zealanders paid 5.8 times as much per GigaByte in 2011 than Australians. This is up from 4.1 times in 2010 and so represents a decline in value to us when compared to Australia.
The comparative value of our plans differs according to the plan range.
At the budget end, New Zealand plans are around the same price per month but provide significantly lower monthly data allowances, meaning that Aussie plans are much better value for money than ours.
In the middle, prices and allowances, and therefore value, are similar.
The top end is constrained in New Zealand with maximum data allowances being well short of those available to Australian’s. This is changing here as more ISPs move to offer ‘unlimited’ plans.
The roll-out of Australia’s National Broadband Network (NBN), a fibre-to-the-home network covering 90% of the country, is expanding the services offered over the Ditch.
Plans at the ‘Terabyte’ level (1,000 Gbps) are now common offerings from Australian ISPs. One of the best Terabyte plans is priced at $120 per month with speeds of 100 Mbps down and 40 Mbps up and there are ‘unlimited’ plans priced at $66 per month.
Indicative pricing for New Zealand urban fibre connections is around $65 for 30 Mbps and $105 for 100 Mbps. But again, our data caps are expected to be significantly lower than the Terabyte plans offered over the Ditch.
The high cost and/or limitation of international bandwidth has been suggested as one of the drivers of our low data caps. This has been refuted in some circles leading to the conclusion that data caps are a marketing device to force users up to more costly plans with higher data caps. It is noted that as Internet usage increases, there is no automatic revenue increases to the ISP to offset their costs in having to upgrade back-haul capacity.
Our international capacity presently relies on the Southern Cross cables which were lit in the year 2000 with usage of 40 Gbps (gigabits per second) - a capacity that anyone can have in their own home today. In 2010, the design capacity was increased 31-fold and trials earlier this year have confirmed the potential to increase that again, by a factor of ten!
These are staggering increases in themselves and reflect a 55% year-on-year growth in international data traffic. Yet two new trans-Tasman fibre cables are expected to become available by early 2014. New Zealand owned company Pacific Fibre are planning new cables and Axin, 51% owned by a China Telecom subsidiary, early this week announced a new trans-Tasman cable that will add additional capacity.
With our international data capacity expanding over 1,000 times in 15 years, international bandwidth will no longer be a constraint on the broadband services offered to us. And with ultra fast fibre to the home, competitive broadband services that we can not yet imagine will become available to us - at least if you live in an urban area!