More internet options coming for business

Internet NZ president Colin Jackson has seen big changes with broadband. Picture / Mark Mitchell

With so much seeming activity around broadband, businesses may well be asking how they can benefit.

"We've already seen huge shifts in the market," says Internet New Zealand president Colin Jackson.

"Since March, the price of small business DSL service has dropped down to residential levels. Upstream bandwidth has improved substantially."

Jackson says businesses will often want static IP addresses, which allow them to run their own web or mail server.

"Static IP addresses are still expensive for artificial reasons. They have always been used as way to force businesspeople to pay more."

He says the fact most businesses must rely on DSL connections, which run over copper lines, is a drawback.

"The government initiatives with the Broadband Challenge will help. We can see what happened in Wellington, where lots of small and medium businesses are hooked direct to fibre through CityLink. It is unfortunate that model was not replicated elsewhere," Jackson said.

Jackson says there has been a marked improvement in the quality of Skype Internet phone connections in recent months.

"Things are getting better, so businesses should avoid being locked into long-term contracts," he said.

Ian Cormack, TelstraClear's solution strategy manager, says most New Zealand firms prefer a 12 or 24-month contract.

He says the company tries to allow existing customers to take advantage of any price changes during the life of their contracts.

Its plans range from $26 through to $249.99 a month, down from the $499 top price of a year ago, but Cormack says most medium-sized businesses would pay between $70 and $100 a month for connectivity and services.

"Business customers should have business services. The question they need to ask is, do they want to be lumped in with residential customers," Cormack says.

"They need to ask what they want to achieve - email, a basic website, some representation on the web, or do they want more."

He says most organisations of more than 10 people would be running their own file and mail servers, even though hosting options are now widely available.

Telecom Xtra, which has more than 70 per cent of the broadband market, has unveiled seven new pricing plans to be launched October 26.

All plans offer full speed downstream and either full speed or 128kbps upstream. Volume caps range from 200 MB to unlimited.

Xtra's competitors who wholesale Telecom's services are expected to come out with competing plans.

Iconz general manager Sean Weekes says the real improvements will come after unbundling, when organisations or internet service providers are able to put their own equipment into Telecom's exchanges, giving them greater control of what they can offer customers.

"The challenge then is the backhaul. That could limit the real speeds which can be achieved," Weekes says.

"You can say you are offering 3.5MB, but the performance will be nothing like that in crowded parts of the day."

The most obvious change is likely to be the way voice services are bundled with data, giving companies an opportunity to cut down on monthly toll bills.

Weekes expects service providers to offer tiered services, so firms can pay for the quality of service which suits their business.

This will make sense if they are able to move away from some of the more expensive ways of achieving quality of service , such as frame relay.

Ihug is also looking at unbundling as the key to its growth.

Chief executive Mark Rushworth says the company plans to install MSANs (multi service access nodes) in Telecom's exchanges post bundling, which will give it full control over not just the data capacity of the lines but also the voice.

"Once you have access to that copper, and are paying Telecom for the privilege, you want to provide as many services as you can over it," Rushworth says.

Ihug has a large consumer base, but its market presence means it also gets its share of business customers.

It charges the same amount for connectivity, but an extra business pack, for $19.95 a month, throws in a domain name, website hosting, 20 email addresses, a static IP address and access to the business helpline.

"It supersizes a standard broadband connection," says Rushworth.

"Ihug has one speed, which is as fast as the line can go. The 256kbps dial-up plans are not broadband."