The rising numbers of broadband fast internet users is encouraging, although large numbers of New Zealanders still rely on "last century" dial-up internet, says InternetNZ.
At the end of March, there were 891,000 broadband subscribers, up 10.7 percent over six months, out of the more than 1.5 million internet users in New Zealand, the Internet Society of New Zealand (InternetNZ) said.
Dial-up subscribers fell 9.3 percent during the period, according to Statistics New Zealand.
New Zealand rated well against other countries for overall internet users, but many people were making do with "last century technology" while the rest of the world embraced advanced broadband, said InternetNZ executive director Keith Davidson.
However, connection speed remained a problem in New Zealand.
The most common download speed for broadband was between 2 megabits per second and 10Mbit/s, although connection speeds did not necessarily reflect achievable speeds for users.
"There may be 30 people connected to a single telco cabinet, sharing a 2Mbit/s stream back to the exchange.
"At peak use times this could mean their `broadband' may be as slow as or slower than a dial-up connection," Mr Davidson said.
Most users had a a small, five gigabyte data cap, indicating that data costs were still an issue, he said.
Strength of competition and the regulatory environment were less of a barrier to internet service provider growth than in the past.
"...the Government's regulatory changes including the operational separation of Telecom is being seen as a good thing and there seems to be an increasing willingness for new service providers to enter the market," he said.
However, the cost of international bandwidth was perceived as a barrier to growth, and a second or third fibre optic cable to New Zealand would aid competition for international bandwidth.
Currently, the Southern Cross cable, half-owned by Telecom, is the monopoly provider.
