Weak competition caps data

Broadband data caps may be more generous in Australia than New Zealand because of stronger competition between Australia's "much larger number" of internet providers, says Sydney-based analyst Market Clarity.

It found from a survey of 'second and third tier' internet providers - smaller players - that the average traffic cap they offered was 115 gigabytes per month in Australia and 25Gb in New Zealand.

That ties in with a claim by Telecommunications Users Association chief executive Paul Brislen that data caps in Australia are typically about four times more generous than in New Zealand.

Consumer groups have at times blamed Southern Cross Cable's near monopoly on international bandwidth to and from New Zealand, but Market Clarity said national and international bandwidth costs were comparable between the two countries and might even be lower for Kiwi carriers.

The study found that Australian providers devoted more of their revenues to purchasing capacity than their New Zealand counterparts.

After all network costs were taken into account, the Australian retail broadband providers surveyed made a median profit margin of 26.3 per cent of revenues, while the New Zealand internet providers had a margin of 38.8 per cent, the company said.

The president of New Zealand's Internet Providers Association, Dave Mill, said it had decided not to comment on issues that it had not been heavily involved in, but would be happy to seek feedback from its members.

"The results are surprising," Market Clarity chief executive Shara Evans said.

"There is a widespread perception, particularly in New Zealand, that the costs of international services drive the difference between the allowances offered to Australian and New Zealand broadband customers.

"However, our research suggests that other factors are more significant."

Evans said no external party had funded or sponsored the survey and Market Clarity had published it purely to raise its profile and better understand the market.

The Dominion Post