Internet Service Provider Survey: September 2007

Internet Service Provider Survey

The Internet Service Provider Survey provides information on the total number and nature of subscribers who use New Zealand-based Internet service providers (ISPs) to connect either permanently or regularly to the Internet. This information allows a measurement of the global connectivity of New Zealanders, which is regarded as an important determinant in accelerating economic growth. A core set of official statistics on Internet service provision results from this survey. This will help individuals, communities, businesses and government to understand how information and communication technology is changing the economy and society.

The Internet Service Provider Survey is carried out every six months by Statistics New Zealand.

Internet service provision in New Zealand

For the six months ended 30 September 2007, there were 57 ISPs operating in New Zealand, with 1,505,100 subscribers. The number of subscribers increased 2.8 percent from 31 March 2007, the lowest growth rate in the two years to September 2007.

Residential subscribers totalled 1,251,100 at the end of September 2007. They accounted for 83.1 percent of all subscribers and provided 73.9 percent of total revenue. Business and government subscribers totalled 254,000, accounting for 16.9 percent of all subscribers and providing 26.1 percent of total revenue.

Size of Internet service providers

Percentiles are a useful method for comparing ISP size over time. Percentiles are determined by sorting ISPs (by number of subscribers) from smallest to largest. The average number of subscribers within a percentile range is then calculated. At 30 September 2007, the smallest ISPs (0th–20th percentile) had 50 subscribers on average, while the largest ISPs (81st–100th) had 122,180 subscribers. The average number of subscribers in ISPs above the 80th percentile has increased 34 percent since September 2005.

ISP revenue from business and government subscribers

The proportion of revenue ISPs received from business and government subscribers at 30 September 2007 was similar to that at 31 March 2007. Twenty-six percent of ISPs received up to 20 percent of their revenue from business and government subscribers, while 32 percent received between 81 and 100 percent.

Other business activities of Internet service providers

In the six months to September 2007, 26 percent of ISPs provided wholesale of bandwidth to other ISPs, while 26 percent of ISPs sold Internet packages to other ISPs for resale. Sixty-three percent undertook none of the activities above, an increase from 56 percent at the end of September 2005.

Internet subscriber connection type

At 30 September 2007, the number of subscribers using analog (dial-up) connection technology was 675,800, down 8.6 percent since March 2007.

Non-analog became the dominant connection technology for the first time ever in the six months to September 2007. The number of non-analog (broadband) subscribers has increased by 14.4 percent from 31 March 2007, to reach 829,300 subscribers. However, this growth rate has slowed down from the previous year's growth of 28.6 percent. Of the non-analog connections, digital subscriber line (DSL) continued to be the most common connection technology, with 646,700 subscribers. The next most common non-analog connection technologies (in descending order) were: cellular, cable, wireless, satellite, and other.

There were 35.5 Internet subscribers per 100 inhabitants in New Zealand at the end of September 2007, compared with 35.1 per 100 six months earlier.

The number of broadband subscribers has doubled, to 19.6 per 100 inhabitants in the past two years ended September 2007, while the number of dial-up subscribers fell from 21.2 per 100 inhabitants to 15.9. Out of the additional 10.6 broadband subscribers per 100 inhabitants, 5.3 switched from dial-up and 5.3 were new subscribers.

Of the 19.6 non-analog subscribers per 100 inhabitants, 15.3 were using a DSL connection type and 4.3 were using other connection technologies.

Internet subscription data allowances

Of the 829,300 non-analog subscribers at 30 September 2007, 7.5 percent (62,600) had no data allowance cap (or data cap) on their subscription plan. Of subscribers who had a data cap, 61.2 percent (507,600) used plans with a data cap of less than 5GB, 24.6 percent (204,400) had a data cap between 5GB and less than 20GB, and 6.6 percent (54,700) had a data cap of 20GB or more.

Internet subscriber speeds

At 30 September 2007, 45.2 percent of all subscribers (679,900) had subscription-plan download speeds of less than 256kbps, 4.0 percent (60,600) had download speeds of 256kbps to less than 512kbps, and 50.8 percent (764,600) had download speeds of 512kbps or greater and speed unknown.

There were 81.7 percent of subscribers who had upload speeds of less than 256kbps at the end of September 2007, down from 87.5 percent six months earlier.

The download speed category of less than 64kbps remained the dominant speed in the six months to September 2007. The second most common download speed category was between 2Mbps and 10Mbps, with the number of subscribers increasing between 11 percent and 20 percent. The next most common download speed categories for non-analog subscribers (in descending order) were: 512kbps to 2Mbps, 256kbps to 512kbps, 10Mbps or greater, 128kbps to 256kbps, unknown download speed, and 64kbps to 128kbps.

During the same period, upload speeds of less than 64kbps was the most common category. The next most common upload speeds (in descending order) were: 128kbps and 256kbps, 256kbps to 512kbps, 512kbps to 2Mbps, 2Mbps to 10Mbps, 10Mbps or greater, unknown upload speed, and 64kbps to 128kbps.

Filtering services supplied by ISPs

The Internet Service Provider Survey: September 2007 measures only the uptake of filtering services which are supplied by the ISPs. There are many other alternatives available to subscribers, including purchasing and downloading software, which are outside the scope of this survey.

Email filtering

At 30 September 2007, 98.8 percent of Internet subscribers (1,487,200) had adopted an email filtering product offered by their ISPs. Eighty-four percent of ISPs provided a free email filtering service to their subscribers, 21 percent provided a charged service and 11 percent of ISPs provided both a free and charged service.

Web filtering

At 30 September 2007, 11 percent of ISPs offered their subscribers a free web filtering service, 16 percent provided a charged service and 5 percent provided both a free and charged service. Seventy-four percent of ISPs did not offer web filtering services.

Internet service provider barriers to growth

For the six months ended 30 September 2007, 63 percent of ISPs identified strength of competition as the greatest barrier to the growth of their operations. This figure remained the same as at the end of March 2007. Other common barriers recognised were the cost of international bandwidth (53 percent), the regulatory environment relating to telecommunications (47 percent), and access to financing (32 percent). Five percent of ISPs reported that there were no barriers to growth.

The proportion of ISPs citing the regulatory environment as a barrier to growth has decreased every period since September 2005 except during the last six months ended September 2007 where it increased to 47 percent from 42 percent from the previous period.

There was a 47 percent increase in the number of ISPs reporting that the cost of international bandwidth had been a barrier to growth in the past two years.

For technical information contact:
Guannan Miao
Wellington 04 931 4600
Email: info@stats.govt.nz.