NZ telco market catching up to Australia: report

Competition driving down NZ broadband prices says Market Clarity

The New Zealand telco market is giving Australia a run for its money with news that local ISPs are catching up to their Aussie counterparts.

A new report, published by Market Clarity, found that New Zealand telcos are becoming increasingly competitive.

However, the Trans-Tasman Broadband Value Gap: Comparing Prices in Australia and New Zealand report found that the maximum cost of broadband per gigabyte (GB) is still much higher in New Zealand - $43.23 - compared to the Australian average of $24.98.

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

"The price of broadband services reflects the many and complex cost inputs to an ISP's business model," Evans said. "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."

The report was based on the analysis of some 200 broadband plans offered by 11 ISPs in Australia and New Zealand, including TPG, iiNet and Telecom New Zealand, with Evans saying that the results indicate affordability is increasing.

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