Australian telco analyst Paul Budde says Telecom's target of 100,000 broadband customers by the end of next year is "a complete disgrace" and to maintain parity with similar nations in Europe the aim should be 1 million customers.
Budde was in New Zealand earlier this month and met with Telecom's chief operating officer Simon Moutter to discuss the issue. Moutter set the 100,000 residential broadband user target in April of this year. Telecom claims to have over 50,000 broadband residential customers, but let slip last month that the vast majority of those, 73%, are only using JetStream Starter, Telecom's non-broadband 128 Kbit/s service.
Budde says New Zealand is slipping behind badly in the broadband stakes.
"If New Zealand were on a par with broadband penetration levels in average European countries like Belgium, Austria, Spain and The Netherlands, it should now have 500,000 users. These aren't countries that are leading the world, these are middle-of-the-road in terms of broadband uptake."
Australia is also lagging behind in the broadband stakes, says Budde, but has recently begun to catch up.
"We have uncapped DSL now and we have between 500,000 and 600,000 broadband users."
Budde says three factors make up broadband's appeal to users.
"They are affordability, unlimited traffic and speed. Traffic caps simply do not work. The ITU [International Telecommunications Union] holds up Australia and New Zealand as examples of how not to introduce broadband."
Budde says early adopters of broadband are technically savvy and know what speed they want.
"The first guys that want broadband know what they want and if they hear 128 then they don't get thrilled."
Bill shock also plays a large part in the equation.
"People know their bills will be much more than Telecom claims and they don't want to spend that much."
Budde is confident the Telecommunications Commissioner will recommend New Zealand unbundle the local loop and disagrees vehemently with the wireless network operators, in particular BCL and Woosh, which claim unbundling will stifle their market.
"There's a window of about three to four years now where they can get in and get established before Telecom gets its act together. To say they are opposed to unbundling is ridiculous - it tells the world they don't know their market and they need protectionism to survive."
Telecom spokesman John Goulter says Telecom is the first to acknowledge that more needs to be done to increase broadband users in New Zealand. However, he is confident the telco will reach its 100,000 user target (even without counting JetStream Starters customers) by the end of 2004.