As the debate on broadband in New Zealand heats up, Telecom's CEO Theresa Gattung recently wanted an independent body to benchmark on the telco's newly announced DSL packages. Gattung is concerned that there is much misinformation and worries that what Telecom says won't be believed.
Business NZ, which says it is New Zealand's largest advocacy group for enterprise, commissioned Wellington consultants Azimuth to find out how well broadband customers are being served. Azimuth is responsible for the Ministry of Economic Development's (MED) broadband reports, according to Business NZ.
Phil O'Reilly, chief executive of Business NZ, says the research from Azimuth shows that Telecom's broadband offerings are among the best priced in the world, thanks to its recent price changes. Telecom's small business packages are in the top ten compared on price and O'Reilly states that residential deals are among the best in the world.
In fact, O'Reilly says the Azimuth figures show New Zealand is in most cases better off than other first world countries, a rather remarkable turnaround for a country that according to the OECD has been bumping along the bottom of the broadband stakes for the past few years.
The Azimuth research led O'Reilly and Business NZ to call for facts in the broadband debate. Computerworld decided to heed that call.
We immediately noted that Azimuth was asked to compare announced, but not yet available packages from Telecom, with existing offerings from providers in 30 countries around the world. The report's author, John Emanuel, confirmed that this was indeed his brief, but neither he nor Business NZ explain how comparing unavailable plans with ones that have been in existence for a while is a factual argument.
Emanuel, a telco industry veteran with 40 years' experience and ex-employee of both Telecom and Telstra, says he used data from researchers Point Topic which was updated wherever possible from operators' web sites.
However, the data sourced from Point-Topic's DSL Worldwide Directory was published in July 2005 and consequently gathered earlier in the year than that. Asked if he checked all the Point-Topic data, Emanuel says he only updated the entries near the Telecom plans from providers' websites.
Although Business NZ presents the Azimuth study as factual, Emanual heavily qualifies his research due to the difficulties in comparing broadband service offerings in a fast-moving industry with one another. Service bundles and quality differences are limit the relative accuracy of benchmarking, Emanuel says, and adds that some services may not be directly comparable. The point of his research, Emanuel says, was to show that in general terms, New Zealand offerings have improved over the past year. It wasn't meant to be an exhaustive and exact study of broadband services around the world.
Furthermore, throughout 2005 local loop unbundling has taken off in other countries than New Zealand, leading to a large number of new providers offering national coverage. Due to the vast increase in service offerings elsewhere, it probably won't be possible to conduct another benchmarking comparison in the future, Emanuel adds. For the BusinessNZ study, Emanuel chose to go with mainly the incumbent providers that offer nationwide coverage in the countries surveyed. Only first-generation DSL was covered, even though other countries offer fast ADSL2+, cable, wireless and optical fibre connections currently.
Computerworld checked the price and service details given for the Basic residential offering by comparing the entries in the Azimuth study to what the providers actually announce on their websites. The difference was astounding: out of 30 entries, 21 were reported as having higher prices, lower speeds and smaller data caps than are currently available. The two other tables for residential and business services presented in the Azimuth research show a similar pattern of inaccuracies.
In some cases, the plans listed were no longer available, having been replaced by substantially upgraded versions for less money. Azimuth used the old schilling currency for Austria as well, even though the country uses Euros and the United States broadband offerings are simply given as a national average with only a price and no service description. Emanuel doesn't say how he worked out the average for US broadband.
Telecom's Basic broadband service will have 256kbit/s downstream and 128kbit/s upstream speed, with a 200MB monthly cap, with a 2c per megabyte charge if customer use more data. How does this compare to what's available overseas?
Not too well: the updated figures show that Telecom's offering is the worst in the world when it comes data usage. Out of 30 providers listed, 15 now offer unlimited data; those that use monthly caps offer 1GB or more as a norm. The next-worst providers are Ozemail in Australia, with 300MB for its Budget plan, and Telekom Austria with the 400MB AoN Speed. Both of these are faster than Telecom's offering, and Telekom Austria's is also cheaper.
When it comes to speeds, only Sonera in Finland and SAPO in Portugal sell DSL with 256kbit/s downloads. Double the speed is the norm, with 1Mbit/s and faster being common overseas. Telecom's 128kbit/s upload speed is quite common for starter packages, however.
According to Azimuth, Telecom's pricing for the Basic package is so keen that it rates number six in the 30-country survey. However, updating the prices drops Telecom down to 12th place. We did use Azimuth's purchasing power parity adjusted exchange rate for the updated price calculations, however, and cannot vouch for how accurate it is.
We contacted Business NZ for comment on the inaccuracies, but Phil O'Reilly would not talk to us. Kathryn Asare, who handles Business NZ communications, expressed surprise when told that the Azimuth figures didn't seem to tally, and referred us to the report's author.
When shown a sample of updated data compared to that in the Azimuth report, InternetNZ president Colin Jackson says he's saddened that Business NZ would publish such poor quality information. Comparing outdated overseas prices to New Zealand ones for yet to be released broadband plans is simply wrong, and Jackson says he's sure Business NZ realises that.
Business NZ's report in brief:
- Outdated or inaccurate information in 21 of the 30 countries listed;
- 15 of the 30 countries now offer uncapped services;
- 512kbit/s plans are the typical minimum;
- Report only looks at incumbent telcos' plans, not new offerings;
- Report doesn't include ADSL 2+ plans, only first generation ADSL
See the full chart: click here