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Closing the Trans-Tasman Broadband Gap

Closing the Trans-Tasman Broadband Gap

Posted by Shara Evans in Press Releases 13 Sep 2011

Kiwi ISPs catching up with Australia

SYDNEY, 13 September 2011: Savvy New Zealand Internet users can get far better value than a year ago – but only if they’re prepared to shop around.

According to a new analysis published today by Market Clarity, the New Zealand broadband market has become more competitive over the last year, and in one case is even offering better value (in terms of price per GB) than is available in the larger Australian market.

“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.”

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.

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 $AU29.99 per month, an Australian customer is offered a monthly allowance of 20 GB, while a New Zealand customer paying $NZ20 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 $NZ315 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.

 

About Market Clarity

Market Clarity is an award-winning telecommunications analyst firm founded in January 2006 by leading Australian telecommunications researcher and strategic consultant, Shara Evans. The firm covers all aspects of telecommunications, including traditional and converged services and technologies. Market Clarity’s extensive databases of technical and market information cover a wide range of facts and figures on the technologies and services that are shaping the Australian telecommunications market. Market Clarity’s GIS tools and research databases enable the correlation and presentation of highly complex information in an intuitive geographic (map) format.

Market Clarity’s insights are derived from a deep understanding of technology, coupled with comprehensive research, which examines each segment of a service’s value chain as well as underlying population demographics. By leveraging its engineering knowledge with an ongoing primary research program, Market Clarity provides insight, intelligence and advice on all aspects of the Australian telecommunications market including traditional, converged and future technologies. Market Clarity’s unparalleled market knowledge and research databases are brought to all consulting engagements.

Market Clarity’s contribution to telecommunications in Australia was recognised by the telecommunications industry’s peak body, the Communications Alliance, which awarded the company its 2007 ACOMMS award for Services to the Industry – Professional Services.

Market Clarity is headquartered in Sydney, Australia.

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