Telecom has accredited more than 17 modems for use with its once restricted JetStream fast internet service, but vendors say the telecomms network infrastructure needs more investment for broadband applications to be effective.
The five major companies with DSL modems suitable for JetStream that have been telepermitted - Nokia, 3Com, Cisco, Alcatel and New Zealand-owned DynaLink - say the opportunity is as big as the total number of internet users as broadband gains mass market appeal and prices come down.
But they say having a choice of modems will do little to improve speed, streaming video or multiple channels of voice over internet protocol on its own.
"That requires investment in the infrastructure on someone's behalf," says 3Com New Zealand manager Patrick Carson.
"Voice over DSL - the standards are not quite there, and video is cumbersome and expensive. Telecom or someone could deploy video servers in their exchanges to manage the spread of use. Realistically, to get good video streaming in New Zealand, you'd need those in the exchanges," says Carson, who, until August, was the Telecom executive responsible for working out DSL modem distribution arrangements.
DynaLink managing director Ian Ferry says streaming video is the "killer app". "But that requires something like the Southern Cross cable. Opening up the modems won't make much difference to the technical capabilities."
Several months ago Telecom invited makers of DSL modems compliant with the International Telecommunication Union's draft standards for DSL to submit them for telepermit testing. Subscribers had been limited to hiring or buying Nokia modems as the ITU standard, which is still not yet signed off, was fleshed out.
Spokesman Glen Sowry says Telecom has been upgrading and reconfiguring its exchanges to match the DSL standard and all types of modems. The upgrade is also aimed at increasing the speed of the service, with Telecom's target between 2Mbit/s to 4Mbit/s downstream and 500Kbit/s upstream.
Sowry says JetStream can provide streaming video and multi-voice channels but the service had not been marketed this way because research showed customers were looking for fast internet.
JetStream has over 9000 subscribers, Telecom says, growing by 70 to 80 new customers a day. Over 72 exchanges are ADSL-enabled.
More infrastructure upgrades will be needed to stop JetStream getting slower as subscriber numbers boom and the network gets congested.
Both modem models aimed at the business market, often including a router, and models aimed at the home market, which are more like set-top boxes, have been permitted, as well as some internal modems. Retail costs range from about $1000 for business models to about $500 for the home.
Cisco business development manager Suzanne Hansen says while the modems may not differ much in speed and performance, differences will be features such as security. While the business market may be swayed by brands, "the consumer market is up for grabs. The people that wake up and get their marketing out there will win," Hansen says.
DynaLink expects the consumer rush to come in three to six months.