The challenge ahead is to ensure equitable access to fairly priced high speed internet for all citizens regardless of location. Five years ago Telecom began upgrading its backbone, concerned that it might not be able to handle the exponential growth of internet traffic. Today data traffic has significantly outpaced voice traffic on the wire-line network.

The number of internet service providers (ISPs) continues to drop as the market consolidates. About five years ago there were about 120 providers scattered about the country, after the price wars of the mid-90s the number halved and as the economics changed and users demanded more than dial-up or high speed bandwidth, takeovers and tough times thinned their numbers to about 40.

To survive everyone has had to add significant value to their bandwidth offerings through web hosting, web page development, e-commerce capabilities and specialist business technology skills. Annual ISP revenues are estimated at more than $300 million. The top ISPs remain Xtra, TelstraClear (Paradisenet and Clear.net), Ihug and Iconz, which share about 80 per cent of the market.

The cost of going on-line is now minimal – it used to be $40 a week and then you paid for either time on-line or how much you downloaded. Now flat rate access is common and available for as little as $15 per week. Further up the chain though using a high speed wireless connection, cable, satellite or Telecom’s Jetstream can cost you around $50 (plus modem and ISP charges) as long as you keep within your data limits.

According to US-based research company Global Reach, by September 2002 there were about 619 million users of the internet worldwide, 36.5 per cent were English speaking. NUA Internet Surveys claims the number is only 580.7 million with 167.8 of those in the Asia Pacific region as at May 2002. By 2004 by various projections the number could be as high as 700-950 million - regardless that’s still only about 10 per cent of the world’s population on-line.

Getting accurate statistics on internet use is almost impossible. Most PCs come bundled with a 56k dial-up modem and access account. Many subscribers use the internet at home and at work, heaps of email accounts have multiple users, use of internet cafés is on the rise and cellphone and mobile internet use is growing.

By the end of 1993 only 15,000 New Zealanders had home or business internet access - in 2002 IDC Research says about 40 per cent of homes or 1.6 million users had internet access, up from 1.4 million in 2001.

If you added business users including those who have a home office the penetration might be closer to 60 per cent. According to IDC we’re lagging behind the Australians who have a home penetration of about 52 per cent, although Kiwi home use is expected to grow exponentially to 2.6 million by 2006.

Despite dotcom downturn or tough times generally the internet will continue to grow. Businesses are using internet technology to create private and secure networks to access critical data and communication with each other across departments (intranets) and divisions and with partners in their supply chain (extranets).