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Running an ISP in NZ vs. Australia – Key Differences

Running an ISP that operates in both Australia and NZ puts me in a fairly unique position, one that should allow me to give a bit of an insight into the differences in service delivery on each side of the ditch.

One of the most obvious differences has always been that there is no distinction between national and international traffic in Australia. At a wholesale IP transit level the distinction just doesn’t exist, so the charge distinction doesn’t apply at a retail level. In NZ we purchase access to Telecom and TelstraClear (the only two ISP’s that don’t peer with the rest of the industry in an effective low cost manner), and international transit separately, but a long standing model of free national traffic in the business market applies so that cost is not directly passed on in the retail space.

In Australia we have access to direct peering with major CDN’s, whereas in NZ we rely on caches to offset the cost of international transit. Read this for more info on whether Pacific Fibre would alleviate this issue.

IP transit in Australia has traditionally been much cheaper for us than has been the case in NZ, but that is starting to come closer to parity. This is a tricky number to match directly however, because 1Mbps of transit in Aus is shared between what would be considered national and international in NZ. But given the ability to directly peer at low cost with major CDN’s and the lower per unit cost of IP Transit we do see cheaper retail data pricing in Australia, but again, this if offset by more expensive tail circuits in the business space. For the price of a 50Mbps fibre circuit in a major NZ city, you would be lucky to get 4Mbps Ethernet over copper in many Australian cities.

NZ has more open access fibre providers (although their future is certainly far from certain given UFB progression) and these providers offer a far more streamlined provisioning process than their Australian counterparts. Copper is still widely used in Australia for symmetrical access, and that requires cooperation between Telstra, AAPT and DTS to get a service going.

This point is flipped on its head where ADSL2+ is on offer as Australian ISP’s have a churn program that easily enables end users to effectively transition to a new ISP with minimal downtime.

National backhaul is comparatively more expensive in Australia, perhaps as a direct result of the greater distances involved, but we certainly find that intelligent network design and effective capacity planning are all the more critical to the bottom line in Australia.

Differences in circuit costs will come down as the UFB and NBN rollouts (both state sponsored fibre initiatives) continue, but they are not running with symmetrical time frames, so it is likely that the difference will be accentuated in the short term as the UFB kicks into gear in NZ, and come into line in the medium to long term when the NBN rollout starts to be felt.

So there are a few snapshots of some key differences I find in running our operation in different jurisdictions, happy to answer any questions you may have as always.

This post originally appeared on he DTS blog, click here to visit it for yourself.