Residential broadband take up "crucial" says cable chief

The slow take-up of broadband services by residential customers is proving to be frustrating for the director of the Southern Cross Cable Network, Ross Pfeffer.

Pfeffer says New Zealand and Australian telcos aren't making the most of the opportunity the Southern Cross Cable presents.

"The key to our ongoing growth is the broadband roll out, particularly residential roll out," says Pfeffer.

"The cable is there for people to use and most of the users are residential. Really the whole paradigm shift of the internet and the whole new level of development is about putting broadband access into people's homes."

Pfeffer says broadband is "incredibly important" to the economy of the region and points to the US where the internet is a major component of the economy these days.

"The role of residential broadband in the US is incredibly important and increasingly so as we go forward."

He says there are two main reasons for the slow residential uptake of broadband.

"Firstly the price is quite high because there are volume charges that go with [broadband], and secondly it's not substantially promoted into the residential market and most people are blissfully unaware of what they could have."

Pfeffer says New Zealand and Australia are both countries renowned for their early adoption of technologies and both have jumped onto the internet bandwagon, but both are in danger of falling behind other countries such as South Korea and Singapore unless broadband becomes more ubiquitous.

The chief executive of the Telecommunication User's Association (TUANZ), Ernie Newman, says part of the problem is the Kiwi Share Obligation (KSO) that Telecom has to support. The KSO means Telecom can't charge users for local calls and that's created a very cheap dial-up culture in New Zealand.

"The increment between dial up and broadband is simply too high for most people to be comfortable with," says Newman. He says most countries around the world need government intervention to get broadband rolled out for residential customers as most of the telcos focus on the more lucrative business market.

Pfeffer says New Zealand is better off than Australia in many respects, one of which is the upcoming regulatory regime.

"I understand Telstra [in Australia] is wholesaling its DSL flavour at the same price as it sells it, which kills it, and if someone wants to build their own they have to pay Telstra $48 a line per month for the right to use a line that Telstra already gets paid for anyway."

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