WELLINGTON -(Dow Jones)- Telecom Corp. of New Zealand's (NYSE:NZT) (TEL.NZ) broadband Internet services have been ranked lower than a number of smaller providers in a report commissioned by the Commerce Commission.
In its first quarterly report of high speed broadband services the Commission found leading Internet service providers Telecom, Vodafone (NYSE:VOD) (VOD) and Slingshot scored average to below average outcomes on key performance measures, including time-to-connect, e-mail round trip times and download speeds.
Telecom, New Zealand's largest fixed line phone company by revenue and subscribers, scored lowest in the three largest cities, Auckland, Wellington and Christchurch, but above average in the smaller centers of Hamilton and Dunedin.
In contrast, smaller, second-tier providers including MaxNet, Snap and Compass consistently delivered above average results in their core markets.
The report, released Monday, is the first undertaken by the competition watchdog and measured the performance of 13 service providers. It follows new regulation that forced former state-owned monopoly Telecom to unbundle its network and allow rivals access to its exchanges earlier this year.
The report found that Telstra Clear, the local unit of Australia's Telstra Corp. (Australia:TLS) (TLS.AU), ranked above the industry average for cable and DSL services, with strong results in the three main cities. However, its DSL performance was low in Hamilton and Dunedin, where it resold Telecom services.
Orcon also achieved consistently good results, particularly in measures that affect Internet browsing, such as synchronization speed, time taken to access local and international content and retrieving web addresses.
Epitiro Technologies and IDC, which compiled the report, said the results portray a "market in transition," where recent infrastructure investment has yet to be reflected in the user's experience.
It said larger providers with the strongest subscriber growth had experienced network congestion that contributed to poorer services than smaller providers focused on a "dedicated, technology-savvy market."
Telecom dominates the local retail broadband market with an estimated 65% subscriber market share among the top five ISPs and over 60% revenue market share. TelstraClear and Vodafone (NYSE:VOD) hold an estimated 11.5% and 9.7% subscriber market share respectively, followed by Orcon with 7.2% and Slingshot with 6.5%.
New Zealand's broadband market continues to grow strongly but subscriber numbers relative to the population are still below the Organization for Economic Co-operation and Development average, the report said.
Hamilton had the best overall broadband ranking, while Christchurch ranked last among the five cities monitored.
-By Symon Ross, Dow Jones Newswires; 64-4-471-5990; symon.ross@dowjones.com
(END) Dow Jones Newswires 06-15-08 1907 Copyright (c) 2008 Dow Jones & Company, Inc.
