Wednesday, 14 September 2011 11:20

Kiwi ISPs bridging broadband gap with Australia

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New Zealand, a place where broadband prices have been even more costly than in Australia, is fast catching up to its larger neighbour in terms of data value for money and now threatens to push ahead, according to a new study.

 

A new analysis published this week by Market Clarity found that the New Zealand broadband market has become more competitive in the past year, and in one case is even offering better value (in terms of price per GB) than is available in the larger Australian market.

The Market Clarity analysis, published in Closing the Trans-Tasman Broadband Value Gap: Comparing Prices in Australia and New Zealand, identified big shifts in both markets, and emerging evidence that New Zealand ISPs are closing the gap that separates them from the Australian industry.

For example, while "Terabyte" plans were unheard-of in the New Zealand market as recently as June 2010, this year has seen the first launches of high-capacity offerings.

"Until recently, New Zealanders have had cause to complain about the value offered by ISPs," said Market Clarity CEO Shara Evans. "While plan prices were broadly in line with what's available in Australia, plan allowances have been much lower in New Zealand."

However, Ms Evans noted that in both countries, the greatest value (in terms of volume allowances) is generally only available to users paying higher monthly subscription prices.

"Customers of 'budget' plans in New Zealand still fare poorly compared to customers in Australia," Ms Evans said. "For example, for A$29.99 per month, an Australian customer is offered a monthly allowance of 20 GB, while a New Zealand customer paying NZ$20 per month receives an allowance of just 1 GB."

Moreover, "premium" plans in Australia - with very large data allowances - are generally cheaper than in New Zealand. While the most expensive plan Market Clarity identified in the Australian sample in 2011 was $139.99 (a 1.1 TB plan), New Zealand's most expensive plan cost NZ$315 per month and brought with it a data allowance of just 330 GB.

The good news is that the median price per GB of data allowance is falling in both countries, albeit more quickly in Australia.

"The price of broadband services reflects the many and complex cost inputs to an ISP's business model," Ms Evans noted. "Regulated costs, wholesale broadband prices, backhaul costs, Internet transit costs, market scale and competition all feed into the cost structures that exist in any market.

"However, I would expect that as broadband affordability continues to improve in New Zealand, higher-capacity services will become more popular among users, and competitive pressure will give users greater choice of higher-capacity services at more affordable prices."

Closing the Trans-Tasman Broadband Value Gap: Comparing Prices in Australia and New Zealand, analysed close to 200 broadband plans offered by 11 leading ISPs in Australia and New Zealand. This free report can be downloaded here.


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