New Zealand Institute for the study of competition and regulation inc.

Abstract

This paper compares the Australian and New Zealand Internet market. It draws heavily on Enright (2000) which reports the short history of Internet Service Providers (ISPs) in New Zealand since the inception of the Internet in 1994. It also provides a review of the prices and market shares and strategic motivations for entry to this market.

The Internet phenomenon is worldwide. Thus although the New Zealand market has experienced rapid price declines and growing market penetration, its performance in delivering benefits to consumers should be judged relative to that of ISP markets elsewhere. International comparisons are fraught with difficulties that make for very cautious interpretation of cross-country price studies.  Nevertheless, some consideration of the Australian ISP market does help place the New Zealand market in perspective. The purpose of this paper is to build on the evidence of Enright op cit, and place it in a wider context by comparing the Australian and New Zealand ISP markets in 1999. The comparison suggests that Internet service provision in New Zealand was cheaper in 1999 than in Australia and that penetration and usage in New Zealand was at least that of Australia.