A report by the Ministry of Economic Development is critical of the state of telecommunications in New Zealand, in particular the prices paid by private consumers and buinesses, and the lack of high-end broadband services.
The report finds that New Zealand has good broadband access availability, but that uptake of broadband as of June 2006 was an unchanged 22nd place out of the 30 OECD member countries.
The quality of high-end multiplay broadband, used for e.g. real time video, and advanced broadband business services cannot be compared because they are not available in NZ.
The report also shows New Zealand's fixed phone and cellphone prices are among the highest in the OECD.
Despite the dismal rankings Economic Development Minister David Cunliffe says New Zealand is making progress compared with other countries. But he does admit that it needs to move much faster.
"While New Zealand's performance, especially with broadband internet uptake, has improved in absolute terms, we are in a competitive international race and our relative performance has not improved," Cunliffe said.
Cunliffe says high end broadband is a "critical national infrastructure" needed for New Zealand's economic transformation.
The report covers the period to June 2006 so predates the December passing of the Telecommunications Amendment Act, which provides for the operational separation of Telecom and unbundling of the local telephone loop to promote competition.
It also predates the March Statistics NZ survey that showed broadband subscribers rose by nearly 30% in the six months to September 30, 2006.
Telecom, Vodafone and Telstra Clear have yet to see the report, but in a draft version they challenged the figures used by the Ministry in the price comparisons. However, they recognise the need for investment to update New Zealand's telecommunications infrastructure.
New Zealand's ageing copper wires and far-flung exchanges cannot support the sort of business tools many overseas companies take for granted.
"You can't even imagine doing what we should be able to do, like desktop video conferencing, high resolution video conferencing so we can talk to customers, talk to prospects, hire staff," says entrepreneur Rod Drury.
But the government is only pledging a fraction of what it would cost to update the country's broadband infrastucture.
"I think it would be natural to expect that the private sector puts in at least the lion's share of the investment to get that broadband capability to Kiwis, after all, they're the ones making the profit off it," says Cunliffe
However, the government is planning to push through the legislation that will help free up the market.
Meanwhile, Telecom has been reviewing its entire broadband service with the outcome due at the end of April.
TVNZ's Sunday programme (TV ONE 7:30pm March 18) examines why New Zealand is so far behind the rest of the world when it comes to broadband services.
