Speedtest.net’s verdict on NZ broadband speeds
One of the best broadband “speed testers” is speedtest.net.
Its slick interface provides estimates of your download and upload
speeds at a click of a button. Interestingly enough, speedtest.net
provides global statistics on the average speed of users from different
countries. Their top 10 countries, by download speed, are:
Japan leads at 9.3Mbps, followed by Sweden on 6.6Mbps. Little surprise
that neither Australia, nor New Zealand show in the top 10.
The speedtest.net statistics for the “Australian continent” shows:
TV1 Sunday: Bravo!
Sunday’s “Traffic Jam” segment this evening was spot on. For the first
time New Zealand television has actually produced insightful and
accurate coverage in regard to the state of broadband in New Zealand.
Well done TV1!
In the past, TV coverage in regard to New Zealand broadband has often
been superficial and has often showed a total lack of understanding of
the real issues. An example being Campbell Live
that in January put the blame of poor broadband performance on the
copper local loop. As we all know, the local loop is not the issue. It
is Telecom NZ’s lack of investment in its backhaul network that is to
blame. And for the first time, this came through clearly in TV1’s Sunday
My only complaint is the inclusion of Rod Drury’s insane proposal
for a government owned domestic and international fibre network. It
shows a total lack of understanding of the real issues, and would do
little to improve on the current situation. The issue is not about having sufficient amount of bandwidth between the cities, or even
to the rest of the world. There is plenty of both. The issue is about
competitive access to the end user. Until we have local loop unbundling
fully implemented, only Telecom NZ has competitive access to New Zealand
homes. Adding oodles of government owned fibre up and down the country
will not change that. It will only waste tax payers money.
The New Zealand dialup eclipse is near
It looks like dialup is finally about to be eclipsed by broadband as the
access method of choice for New Zealanders. According to research data
provided by Roy Morgan Research
the trend in overall new connections (dialup+broadband) has almost
completely flattened, indicating that the market is reaching saturation.
The kiwis that want to use the internet, are now pretty much all
connected! We are now seeing dialup slowly being superseded by
broadband. Dialup has been trending down sharply since around mid 2004,
as customers slowly, but surely, upgrade to broadband.
A simple extrapolation of the Roy Morgan research data shows that dialup may be eclipsed by broadband as early as next month:
The chart shows thousands of New Zealanders with dialup (blue) and broadband (red) connections at home. The thicker faded lines show the extrapolated trend of broadband soon eclipsing dialup.
More on the New Zealand Dialup vs. Broadband Landgrabs
Last week we contrasted the dialup landgrab against the broadband one in The New Zealand Dialup vs. Broadband Landgrabs.
The article focused on the subscriber numbers of the New Zealand tier-1
providers during the two eras. The dialup landgrab showed that a level
competitive playing field can produce a competitive market. Unfortunately, this has not yet eventuated in the broadband landgrab.
This time around, let’s have a look at it from a slightly different perspective: market share.
We will compare the dialup market shares of the New Zealand providers
at the peak of the dialup landgrab (2004) with the equivalent broadband
market shares today. Of course, the broadband landgrab has not yet
“completed”. (In our estimate we are around halfway there.)
Before we start the discussion, we will divide the providers into two
tiers, based on market share (as measured in dialup or broadband
- Tier 1: providers with more than 5% market share;
- Tier 2: providers with less than 5% market share.
Let’s start with the Tier-1 providers: The dialup landgrab culminated in 2004, and the tier-1 market was then divided as follows:
[Source: Paul Budde analyst reports.]
Badly Managed Traffic Management
has been all over the media (and the small Kiwi blogsphere) that
Telecom NZ has withdrawn its GO LARGE “unlimited usage” ADSL plan due to
the fact that their “traffic management” went horribly wrong. For good
commentary, see David Farrar, NZ Herald, and TUANZ.
According to Telecom’s own release, it appears they have not only traffic managed a small subset of traffic, such as P2P, but accidentally all of the traffic for GO LARGE customers since the 8th of December last year. Duh!
Unfortunately, it is all but impossible to actually work out what has
been going on in GO LARGE land… They key point being that there is no
explanation given by Telecom to as what “traffic management” actually
means. There are obviously a number of ways that “traffic management”
can be applied to broadband customers. The obvious ones being:
- Per application: provide a certain (smallish) bandwidth
allocation for certain applications (=ports/services), like P2P
applications. For example: limit P2P and other applications to a total
of 200Mbps for all subscribers.
- Per subscriber: provide a certain bandwidth allocation per
subscriber. For example, limit each subscriber to 2Mbps. (This is the
way that all NZ ADSL plans used to work. The new unconstrained plans
changed all that.)
- Per group of subscribers: provide a certain bandwidth
allocation per group of subscribers. For example, limit the total
bandwidth usage for all GO LARGE customers to 200Mbps.
The New Zealand Dialup vs. Broadband Landgrabs
The Internet era, from an ISP or Telco perspective, can be divided into
the dialup and broadband “landgrabs”. These are the times when the
providers attempt to grab as many customers as possible, sometimes with
loss-leading offers, with the intention of taking the profits in the
future. In New Zealand, the dialup landgrab started in the mid 90s and
peaked in 2004 as shown below:
[The graph shows total dialup and residential broadband subscribers. Source: analyst reports and industry data.]
The fascinating thing about the dialup landgrab was that the competitive playing field was relatively level.
Telecom NZ, the local loop owner, did not have any significant
advantage over the challengers. Sure, Telecom NZ had more money to spend
on building infrastructure and on marketing its services. However, the
cost of providing dialup access to customers was pretty much the same
for Telecom NZ and its competitors. And the margins for all players were
healthy. As a matter of fact, in one respect the playing field was
tilted against Telecom NZ as re-sellers could (ab-)use the old
interconnect agreements to generate revenue. This fact was used by a
number of free ISPs, such as ZFREE (TelstraClear) and i4free (Callplus).
Telecom NZ: ADSL2+ coming in March
NZ has confirmed that it will finally (!) start to roll out ADSL2+ in
March. The roll-out will start with the Pakuranga exchange and will be
extended to cover 120 exchanges by the end of 2007 in Auckland,
Wellington, Hamilton, Christchurch, and Dunedin. The deployment will
cover approximately 50% of Telecom’s broadband customer base. Telecom’s
existing ADSL1 technology has a maximum downstream speed of
approximately 7.6Mbps. ADSL2+ will triple this maximum speed to 24Mbps.
However, for customers to see a practical speed improvement, the
distance to the exchange should be less than approximately 2 kilometers.
Interestingly enough, Telecom states that the rollout will be
treated as a platform roll-out, but not a service roll-out or change. In
other words, existing UBS customers with ADSL2+ capable modems may see
speed improvements once their exchanges have been treated to the ADSL2+
fork-lift upgrade. This approach is certainly not one that we expected
Telecom NZ to take. We anticipated that the ADSL2+ upgrade would be seen
as the perfect opportunity to introduce higher-end, faster, but pricier
broadband plans. Good on you Telecom for improving the service (at
hopefully the same price-points)!