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From: media@telecom-media.co.nz

Date: 11/05/04 09:11:57

To: hugh@xtra.co.nz

Subject: FIGURES SHOW IT REALLY IS THE ?YEAR OF BROADBAND?

FIGURES SHOW IT REALLY IS THE YEAR OF BROADBAND

New Zealanders have been connecting to broadband in record numbers since

the introduction of new high-speed, flat-rate plans last month.

Broadband has been selling at an unprecedented rate, Telecom Chief

Executive Theresa Gattung said today.

The new Xtra JetStream range includes plans that run on 1Mbps and 2Mbps

with no extra charge for going over the usage caps.

JetStream sales are growing rapidly. Weve been signing up around 800 new

broadband customers a day and last weekend was our best weekend yet, six

times higher than the weekend average over the last six months.

Were well on track to reach the target of broadband in 250,000 Kiwi

households by the end of 2005, Ms Gattung said.

Figures released today showed that as at 30 September 2004, before the new

plans were available, Telecom had 98,000 residential customers on

JetStream double the number of a year earlier.

With business connections added, Telecom had 139,000 JetStream connections

at 30 September 2004.

Telecom today delivered the first of its quarterly broadband reports to

the Commerce Commission. The report excludes customers on 128kbps plans

and on that basis Telecom reported 74,500 residential customers and 41,000

business customers on broadband.

Ms Gattung said the number of customers on 128kbps plans fell by 13,000 to

24,000 over the year as customers switched to higher-speed broadband

plans. Telecom is on a programme to switch all those customers to

higher-speed plans in coming months.

Were excited that broadband is starting to take off in New Zealand. In

some parts of the country such as Auckland, more than 10% of households

now have broadband. It is also great to see similar levels of uptake

occurring in some of the provincial centres such as Queenstown, Wanaka and

Kerikeri.

If you look at the experience of other innovations such as pay TV or

DVDs, thats the point where a service moves from a minority interest to a

must have in the mass market.

With the cost of switching from dial-up to high-speed broadband now just

the equivalent of three cups of coffee a month, its easy to see why so

many families are getting into it.

As broadband is now moving into that stage, were exploring extra value

we can add such as making more education content available on line.

We want to work with the Government and others to develop those services.

Project PROBE has shown that co-operation can really bring results.

PROBE was all about the Government working with suppliers to deliver

broadband to schools and their communities, particularly in rural New

Zealand. Were about to pass some important milestones in our PROBE

regions which mean that, along with the work that others have been doing,

the vast majority of New Zealand schoolchildren will start the 2005 school

year within reach of broadband.

More than half of all secondary schools are on broadband, and more than

100,000 students are benefiting from our managed, secure Internet and

video-conferencing service, SchoolZone.

Theres a revolution going on in New Zealand schools and were excited to

be part of it.

Ms Gattung said Telecom has always believed wholesale would be a

significant part of broadbands growth story in New Zealand.

Im pleased to say we have overcome the technical difficulties we

encountered with the Unbundled BitStream Service. UBS will now be

available for other ISPs to develop their own broadband plans from 8

November, allowing ISPs to switch over from the interim UBS plan weve had

in place.

We regret the problem we encountered with UBS because, as with the

wholesaling of residential and business services, we want to demonstrate

that were committed to the success of the regime.

Weve made public commitments to launch higher speed UBS plans early in

2005. And its important to note that all our JetStream plans are

available to other ISPs on a resale and wholesale basis.

Ms Gattung said it was very pleasing that the Commerce Commission has

confirmed it is satisfied that Telecom is meeting its commitment to offer

Unbundled Partial Circuits (UPC) which allows other carriers to deliver

high-end data services to their customers using Telecoms network.

ENDS

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