While three quarters of Internet subscribers are now on broadband, New Zealand remains one of four OECD nations with constraints on how much data a subscriber can access before per megabyte charges kick in or users get shut down to dial-up speeds.

The OECD survey says half our broadband subscribers still have 5Gb or less as their data cap, which is seen as a major impediment to future growth. However, StatisticsNZ suggests we’re improving, with those expanding their ceiling to 20Gb tripling to 126,000 by June 2009.

StatisticsNZ says broadband subscriptions rocketed ahead by 27 percent in the year to June, with a million New Zealanders now on broadband. This compares with 891,000 in 2008 and 475,700 in 2006.

In the year to June about one fifth of users; around 220,000, were using mobile data cards, cable or satellite technology for broadband, up 53 percent on 2008.

Meanwhile New Zealand continues to inch its way up the broadband rankings to 18th place out of the 30 OECD countries, up 3.7 percent on the last survey. In the previous five years New Zealand has waltzed around the 19-20 mark.

Fibre diet recommended

Now that fibre is becoming the next big growth identifier, New Zealand has yet to find first rung on the ladder. The average OECD penetration is 10 percent, although 14 other nations are only at one percent.

The plan to deliver ultra-fast broadband to 75 percent of New Zealanders over fibre within the next decade will rapidly shift that ranking with contracts being signed and contractors about to get on with the $1.5 billion task.

The government's goal is to boost broadband speeds to a potential 100Mbit/sec by laying fibre optic cable as close as possible to homes and businesses. It has committed to a regional partnership with private sector companies bidding for the business. In the first six years it will prioritise fibre direct to businesses, schools and health services.

The government stepped in to stimulate competition and help improve the business case for ultra-fast broadband, when private sector carriers decided not to invest in fibre-to-the home. The government’s Digital Strategy 2.0 target is 80 percent of Internet users having 20Mbit/sec or higher by 2012.

"The future of broadband is in fibre, and taking it right to the home will bring significant gains for productivity, innovation and global reach," says Communications Minister Steven Joyce.

Film makers, publishers, engineers, those dealing with heavy graphics and design, interactive education, medicine and science are all expected to benefit. The move is also expected to stimulate new services to homes and small businesses including video on demand. Sky’s online service was recently terminated because of slow broadband speeds and data caps.

On top of its investment the government has also initiated a $300 million upgrade plan for rural New Zealand which could cover about 15 percent of the population. This will connect 93 percent of rural schools to a 100Mbit/sec network with the remaining 7 percent promised at least 10Mbit/sec.

The main telecommunications carriers were critical of the fibre-to-the-home roll out in a paper presented earlier this year, believing their own commercial high speed connectivity plans would meet the needs of the country for the foreseeable future.