Internet access is widely available in New Zealand. Like Australia, it first became accessible to university students in the country in 1989. As of October 2015, there are 1,926,000 broadband connections and 53,000 dialup connections in New Zealand, of which 1,661,000 are residential and 316,000 are business or government. (For reference, there are 1,679,800 households in New Zealand as of September 2013.)
Digital subscriber line (DSL) over phone lines provides two-thirds of broadband access in New Zealand. ADSL2+ is available in most parts of the country, with VDSL2 available in some areas. Fibre to the home cover over half of the main towns and cities. The phone and fibre networks are mostly owned by network company Chorus Limited, which wholesale services to retail ISPs. Parts of Wellington, Kapiti and Christchurch have cable internet access. Nearly all of the population is covered by 3G mobile broadband, with 4G available to the majority. Satellite internet is available throughout the country.
As of May 2015, Ookla reports the average download speed for fixed broadband as 27.4 Mbit/s (ranked 42nd in the world) and the average upload speed as 13.2 Mbit/s (35th). As of 2014 3rd quarter, Akamai reports an average peak download speed of 32.2Mbit/s (50th). For mobile broadband, as of November 2014, Ookla reports the average speed as 25.1Mbit/s, the fastest in the world. Broadband pricing is at, or above the OECD average, and most connections have a fixed data cap. There are more than 80 ISPs, with two of them having three-quarters of the market. The New Zealand Government is funding two broadband expansion initiatives, with the aim of providing fibre to the home of 80% of the population and bringing broadband to 97.8% of the population by 2019. International connectivity is mainly provided by the Southern Cross Cable.
Retail services
As of October 2015, there are 1,335,000 DSL connections, comprising 69% of the total broadband connections. There are also 485,000 (25%) cellular, satellite, cable and fixed wireless connections, and 105,000 (5%) fibre connections.
DSL
Most of the telephone infrastructure is owned by Chorus. Chorus provides ADSL (up to 8/1 Mbit/s), ADSL2+ (up to 24/1 Mbit/s) and VDSL2 (up to 70/30 Mbit/s) services over the copper phone network.
Contrary to the usual practice overseas, most connections are at full speed, instead plans differ in the amount of data included. As DSL is sensitive to distance, the closer the customer is to the equipment, the faster the connections. Chorus has implemented a fibre-to-the-node (also known as "cabinetisation") project to bring the equipment closer to the user, so 91% of the population is able to access a DSL connection of 10Mbit/s or more. As of January 2014, 97.3% of phone lines are capable of accessing ADSL and 62.4% are capable of VDSL2.
As of December 2014, Chorus has about 1.717 million copper connections, of which 1.133 million (66%) has broadband service provided using Chorus equipment. 1.040 million (92%) are using ADSL1/2+ and 93,000 (8%) are using VDSL2. DSL is usually sold with a phoneline service (called "clothed DSL"), but is also available without the phoneline (called "naked DSL"). 113,000 (11%) of the ADSL(2+) connections, and 23,000 (25%) of the VDSL2 connections are naked.
Chorus cannot sell services directly to customers, instead, they wholesale services to internet retailers at regulated prices. The copper loop is unbundled, so operators like Vodafone, Compass and CallPlus(Slingshot/Orcon) can install their own equipment at telephone exchanges and rent just the copper line from Chorus. As of December 2013, 131,000 (8%) lines are unbundled.
Fibre
Fibre to the home is being rolled out to the urban areas of the country via the Ultra-Fast Broadband scheme (see below). The network is being constructed using Grouped Passive Optical Networks (GPON) technology, which is reliable, comparatively low-cost and has been used in projects such as Google Fibre.
As of June 2015, the project project is 54% complete, with fibre available to 724,253 users, of which 106,025 have signed up. Residential plans are between 30/10 Mbit/s and 200/200 Mbit/s, with 1000 Mbit/s (gigabit) services available in selected areas. As of June 2015, there are 87 retailers of UFB services.
P2P fibre is available in business areas of the cities from several companies, including Chorus, Vodafone, CityLink and Vector.
Cable
Vodafone has a DOCSIS 3 hybrid fibre-coaxial network covering parts of Kapiti, 85% of Wellington and almost two-thirds of Christchurch, a total of 145,000 homes. There are about 60,000 customers on the cable network. It provides plans of 50/2Mbit/s and 100/10Mbit/s.
Mobile
There are three physical cellphone networks in the country. Vodafone provides 2G and 3G coverage to 97.5% of the population and LTE to 84%. Spark provides 3G coverage to 97% and LTE to "over two-thirds". 2degrees has a 2G/3G network covering 88% of the population, with users roaming to Vodafone outside that area. 2degrees has 4G coverage to "more than half" of the population.
Fixed wireless
There are a total of about 50,000 fixed wireless connections using a variety of providers.
Vodafone offers a fixed wireless service provided over LTE/HSPA+ in rural areas under the government-subsidized Rural Broadband Initiative scheme (see below). As a condition of the subsidy, Vodafone also wholesales this service to other retailers. Spark also offers a fixed wireless service over LTE in rural areas.
Woosh offers a fixed wireless service in Southland. It uses a proprietary TDD-CDMA technology by IP Wireless that is no longer supported by vendors. The maximum speed is 1.6Mbit/s.
There are smaller regional providers covering rural areas. They typically use the unlicenced 2.4 and 5.8 GHz bands.
Satellite
Satellite is available throughout the country from Farmside (using IPSTAR) and Wireless Nation (using Optus D2) for people in areas unserviced by broadband.
Dial-up
Almost every household is able to access dial-up, thanks to Chorus inheriting the formerly state-owned copper phone network. For the ten thousand most remote households, their phone lines are connected back to the exchange via a radio system called customer multi-access radio (CMAR). These households can only access 14.4 kbit/s speeds. As of October 2015, there were 53,000 dial-up connections (3% of all connections), down from 99,000 (5%) in 2013, and 127,000 (7%) in 2012.
Fastest Business Internet Video
Government broadband upgrade plan
The government has two plans to bring fast broadband to 97.8% of the population by 2019.
Ultra-Fast Broadband Initiative
The Government is spending NZ$1.35 billion on public-private partnerships with Chorus and three local electricity network companies to roll out fibre-to-the-home connection in all main towns and cities with population over 10,000. The programme aims to deliver ultra-fast broadband capable of at least 100 Mbit/s download and 50Mbit/s upload to 75% of New Zealanders by 2019. In total, 1,340,000 households will be connected.
In 2015, the Government launched a $152 million to $210 million extension of the original UFB programme, with the aim of extending UFB programme coverage from 75 per cent to 80 per cent of New Zealanders.
Rural Broadband Initiative
The government has awarded a $300 million Rural Broadband Initiative (RBI) contract to Vodafone and Chorus to bring broadband of at least 5Mbit/s to 86% of rural customers by 2016. Vodafone will install 154 new cell towers and upgrade 387 towers, adding 250,000 addresses to its 3G coverage. As of June 2015, 116 new towers have been installed and 314 towers upgraded, covering approximately 242,814 addresses. As of June 2014, there are 6064 customers on the RBI wireless network. Chorus will provide fibre to the new Vodafone towers, 1040 schools, 183 libraries and 50 health providers. Chorus will also be upgrading or installing 1215 new cabinets to increase GPON, VDSL and ADSL coverage to 100,969 lines. As of June 2015, 93,348 lines have been upgraded, with a 80% uptake rate.
In 2015, in addition to expanding the coverage of the UFB programme, the government also launched a further $100 million investment to expand the RBI, and $50 million to improve mobile coverage in black spot areas.
Data cap
As of October 2015, 67% of internet connections have a fixed data cap. The most common cap is between 20-50GB per month. On average, each household uses 45GB of data per month. Once users have exceeded their data cap, they typically have the option of having the speed limited to 64-128 kbit/s for the rest of the month or paying for any extra data used. Some ISPs (including the big ISPs Spark, Vodafone, Slingshot and Orcon) offer an 'unlimited' plan with no fixed data limit, but they may implement throttling on certain traffic.
All mobile phone data plans have set caps, with any excess paid for per MB (although extra data blocks can be purchased to avoid the expensive casual data pricing). As there are no unlimited plans in New Zealand, its cellular data network is the fastest in the world, with downloads of 5 to 20 Mbit/s on 3G and 20 to 75 Mbit/s on LTE 4G being usually available.
Internet service providers
As of October 2015, there are about 80 internet service providers. 16% have fewer than 100 customers, 41% have 101 to 1000 customers, 28% have between 1001 and 10,000 customers, 7% have 10,001 and 100,000 customers and 4% have more than 100,000 customers. 28% of ISPs wholesale bandwidth to other ISPs and 24% sell packages to other ISPs for resale.
As of 2015, the top ten ISPs are (with market share in brackets): Spark (41%), Vodafone (28%), CallPlus (16%), Snap (2.2%), Trustpower (1.2%), Megatel (.67%), Woosh (.66%), Compass (.56%), WorldxChange (.49%) and Actrix (.43%).
Pricing
As of February 2015, an unlimited UFB plan can be purchased. For $79/month for 100/20 and $129 for 200/200.
The Commerce Commission, which is responsible for telecommunications regulation, performed a comparison of broadband prices in New Zealand with prices in OECD and OECD-like countries. The data used is from June 2013.
98% of New Zealanders has access to affordable broadband, according to the ITU's measure of broadband costing less than 5% of average income.
History
Early days
By 1978 a nascent internet had been established at the then Department of Scientific and Industrial Research (DSIR). This was a network linking the disparate campus "mainframes" around the country via PDP/11 and LSI/11 machines linked together over 9600bit/s "S2" circuits leased from the New Zealand Post Office. Due to the Telecommunications Act, the DSIR was not able to link all the research institutions together (MAF Research, the universities and other non-DSIR research institutions). However, by the mid-1980s, with the advent of the Post Office's X-25 based packet switching network, and a degree of de-regulation, it became possible to link the various institutions together at a cost. In 1985 and 1986 a number of meetings were held by the various research institutions to plan for a broad-based research network that would provide basic research electronic communication (mail, file sharing and remote access). It was agreed to base this on the UK's Joint Academic NETwork (JANET) "Blue Book" standard rather than the US's ARPANET standard.
The push for the development came from the DSIR (especially, the newly formed Division of Information Technology in 1985, Dr's Crouch, March, Nield and Whimp) and the Universities, in particular the University of Waikato and John Houlker.
By 1987 everything was in place other than the last key component - international traffic. The controllers of funding were steadfast in refusing to fund the $250,000 estimate for the link up the Pacific to the United States.
John Houlker did not let up. Due to his efforts New Zealand's first international internet connection was established in 1989 from Waikato University through IBM. The capacity went from 64 kbit/s to 128 kbit/s between February 1993 and February 1994.
Free ISPs
At the start of the millennium, there were a number of ISPs offering free dial-up internet to users. Unlike free ISPs overseas, these did not survive on advertising or e-commerce revenue, instead, they were funded by interconnecting charges.
In 1996, Telecom and Clear signed an interconnecting agreement, where Telecom would pay 1-2 cents/minute for calls from Telecom customers to Clear customers. When the agreement was signed, the potential of the internet was not fully understood.
The first company to take advantage of this situation was Compass Communications, which set up Freenet in February 2000. Several companies followed: i4free (by CallPlus), surf4nix, Zfree (by Clear), Splurge (by Quicksilver).
When users make a modem call from their Telecom phone line to their free ISP on Clear, Telecom had to pay the interconnection fee to Clear, which ranged up to tens of millions each year. The free ISPs had quite an impact on the New Zealand ISP market, dropping Xtra's market share by 10% during the time they were operative.
Telecom quickly remedied the situation by forcing all ISPs to use special dial-up numbers starting with 0867, which were exempted from interconnection fees. (The legality of this decision was still before the courts as of 2010.) Zfree was the last free ISP to shut down in July 2002.
First broadband
In 1999 Telecom New Zealand began providing broadband internet (ADSL) under the name JetStream. There was a progressive roll out into local exchanges. JetStream services were offered by many different ISPs, with Telecom billing for all data usage and the ISP charging for authentication and other services such as a static IP address. Home users were offered 'starter' plans at 128 kbit/s upload and download. Speeds greater than 128 kbit/s were extremely expensive and extra data (beyond the allowance) was charged at over $0.10 per MB. Telecom progressively introduced lower cost home options. Businesses were able to access 'full speed' services at up to 8 Mbit/s downstream and 800 kbit/s upstream, with data charges up to $0.20 per MB.
During March 2004 a 256 kbit/s home service was introduced with a 10 GB allowance for NZ$70.
In 2005 the government mandated Unbundled Bitstream Service (UBS) at a maximum upstream bandwidth of 128 kbit/s. This allowed ISPs to bill for their client's data usage. Telecom initially specified a 256 kbit/s downstream, but added 1 Mbit/s and 2 Mbit/s options later in the year. Telecom provided this in addition to the existing Jetstream plans.
In late 2005 Telecom cancelled its previous wholesale arrangements for JetStream and its plans with other ISPs. Only Telecom's own ISP, Xtra, could sell plans faster than the UBS options.
In February 2006 Telecom announced its intention to offer a speed upgrade on their wholesale. It was reported that some providers would likely reject the offer, though Telecom believed that negotiations were continuing well.
In April 2006, Telecom New Zealand introduced new cheaper services with download speeds up to 3.5 Mbit/s, some thought this was to avoid regulatory local loop unbundling. In May 2006 local loop unbundling was announced as part of a comprehensive telecommunications package.
Monopoly concerns
In the early 2000s, Telecom's control of telecommunications infrastructure was being criticised by lobby groups such as the Telecommunications Users' Association of New Zealand and Internet New Zealand.
In early 2006, there were growing concerns about below par broadband in New Zealand. On the whole, Telecom's upstream speeds (128 kbit/s) and data caps had resulted in New Zealand's internet connections being ranked unfavourably compared to other countries in the OECD. Competitors were making some changes such as offering higher data caps (XTRA's data caps averaged from 1 to 10 GB of data per month, while competitors such as ihug offered 40 and 60 GB options, or Xnet who offered free national data on their ADSL plans.) In mid 2006, Telecom still had control over the network including speeds and how much data they supplied each "UBS" customer.
Amidst growing pressure from the government, Telecom boosted downloads to 3.5 Mbit/s and uploads to 512 kbit/s (at high costs such as $20/month more just for increased upload speeds). Competitors and customers reported slower than expected speeds, with one ISP director criticizing Telecom's backhaul network. The new plans were also criticised for reducing the data caps on downloads.
Unleashing speeds
In May 2006, the government announced a comprehensive telecommunications package including unbundling of the local loop to allow other ISPs to compete more effectively against Telecom's DSL offerings. The New Zealand Institute think-tank has estimated that the economic benefits of competitive broadband access could be worth as much as NZ$4.4 billion a year to New Zealand's gross domestic product.
On 26 October 2006, Telecom "unleashed" the download speeds on their network, meaning download speeds went as fast as the lines could go. Additionally, there was also an unlimited download plan, which was also uncapped, however 128kb upload, and a fair usage policy which is put in place to temporarily limit the speeds for customers who have high usage or make use of peer-to-peer connections via traffic shaping - basically limiting a so-called "unlimited" plan. This plan only lasted for a few months until it became clear that Telecom were restricting all traffic (not just peer-to-peer) during all times of the day (instead of the 8 peak hours per day stated). Because of this, all subscribers on the so-called "Go Large" plan were given a refund for up to 2 months worth of service, and the plan was eventually made no longer available to new subscribers.
In March 2007, Telecom started to introduce ADSL2+ into local exchanges through their roll-out programme.
Local loop unbundling and the structural separation of Telecom
The government mandated local loop unbundling in 2006, thus allowing other ISPs to set up their own infrastructure and services, and using only Telecom's existing copper wiring and exchanges. Several countries do similarly to compete more effectively with the incumbent's offerings. They also mandated naked DSL and unconstrained UBS (which may see rapid changes in ISP offerings). The then Telecommunications Minister, David Cunliffe, expected that the market would feel the effects from 2007-2009, with policy to be enacted commencing at the Budget in May 2006. As a part of the policy, the Government was to take steps to encourage private sector investment in improving rural telecommunications services, and to further open up the marketplace to alternative delivery media, such as fibre optics, cable and satellite.
Telecom had a monopoly on the local loop until recently. There are alternatives such as CityLink in the Auckland and Wellington CBDs, TelstraClear's cable internet in Wellington and Christchurch, satellite, and wireless in some locations - but products based on Telecom/Chorus's DSL are the norm, as other networks do not have the same coverage nor pricing the DSL network has.
In December 2011, Telecom NZ was split into a retail company later renamed Spark, and Chorus, a separate infrastructure company. Chorus has completed in early 2012 a fibre to the node roll out in towns and cities with exchanges that have more than 500 lines.
Vodafone NZ became Telecom's biggest competitor after acquiring ihug in 2006 and then acquiring TelstraClear in 2012. TelstraClear invested heavily in infrastructure throughout New Zealand by laying fibre networks in areas in Wellington, Nelson, and Christchurch. Vodafone are continuing to build a fibre backbone throughout New Zealand.
Recent developments
In June 2013, Google started testing Project Loon in Canterbury, a plan to provide internet services via large helium balloons around the globe.
In mid 2015, Vodafone started upgrading its Rural Broadband Initiative network to 4G, while Spark also launched a rural 4G broadband service.
In July 2015, Woosh sold its customers in Auckland, Wellington and Christchurch to Slingshot (owned by Australian company M2), leaving only its operation in Southland.
In October 2015, the Government announced an aspirational target that 99% of New Zealanders will be able to access broadband at peak speeds of at least 50 Mbps by 2025. The remaining 1% would get at least 10Mbps.
High-speed networks
Kiwi Advanced Research and Education Network (KAREN) was set up in 2006 to link universities and Crown Research Institutes within New Zealand via fibre-optic cable, with links to Sydney and Los Angeles via the Southern Cross Cable, at speeds of up to 10 gigabits per second (or 1 gigabit per second to Los Angeles and Sydney).
Chorus ran a, now completed, "Gigatown" competition. Residents in Dunedin, the winning town, will get a 1Gbit/s connection at the price of a normal connection.
Weta Workshop, Weta Digital and Wingnut Films in Wellington have high-speed links provided by CityLink.
International connections
International connectivity is mainly provided by the Southern Cross Cable, as well as the old Tasman 2 cable.
The Southern Cross Cable is the main overseas connection for New Zealand. It connects New Zealand to Australia and the West Coast of the United States. It is majority owned by Spark (formerly Telecom).
A new company Pacific Fibre proposed another international cable between New Zealand and the United States, with claims in 2011 by one of the proponents Sam Morgan that competition would cut international capacity costs, and result in more generous internet data caps. On 1 August 2012, Pacific Fibre announced they were unable to secure sufficient investment and the planned cable was discontinued. "I think it's tragic news for the New Zealand market", said Telecommunications Users Association CEO Paul Brislen. "We've spent millions of shareholder funds trying to get this done and despite getting some good investor support we have not been able to find the level of investment required in New Zealand initially and more broadly offshore", said Pacific Fibre chairman Sam Morgan. Pacific Fibre will subsequently cease operations.
Internet exchange points
CityLink operates ExchangeNET, a network of neutral Internet exchange points throughout the country.
Censorship
The Department of Internal Affairs runs a voluntary internet censorship scheme. Both major ISPs Spark and Vodafone are members of the scheme.
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