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It'll be 2020 before half of us have fibre - IDC

Updatake of fibre offered under the government-backed Ultrafast Fibre (UFB) project has been ultraslow to date. 

Recently the government said UFB fibre now passes 100,000 premises. But reports from wholesalers and retailers indicate only around 1000 (or 1%) of those within fibre have chosen to connect.

A new report from market researcher says uptake will continue to be slow for the first three to five years of the project (which has been officially underway for 18 months, but in earnest since June).

IDC used analysis of the past NZ adoption rates of mobile and DSL technology as the basis for its 11-year forecast (2012-2023) for customer uptake of the new UFB network.

Between 2015 and 2017, a four year period of rapid takeoff will then begin that will see fibre take-up increase from 10% to approximately 50%  penetration (or 600,000 fibre connections) by 2020.

It will take at least nine years before fibre takes over from copper as the dominant broadband access method in NZ, IDC says.

The research company also looked at what drives fibre uptake.

"In other countries fibre rollouts have tended to arise either on a small scale or as a result of competitive pressure, for instance from cable TV players," says IDC research manager Peter Wise.

"Potentially some regulation of content rights in NZ will also be necessary." IDC notes the Commerce Commission is investigating Sky TV's content acquisition deals and ISP partnerships. 

Cloud services are seen as a factor for business.

More education was need. For example, that fibre is a lot more reliable than DSL broadband, as well as faster.

IDC's review of overseas fibre rollouts found a combination of cost, performance, available content and social factors drove much of fibre demand.

In terms of immediate obstacles, a robust and consistent installation process is required, IDC says.  Local fibre companies are busy trialing these but early reports indicate that one installation can take longer than a day and cause a lot of disruption for the householder.
 
Larger retail service providers will not want to risk their brands, until there is a consistent, positive installation experience for customers, IDC notes. The heads of Vodafone and Telecom have both recently told NBR the fibre install process is "no where near prime time." Together they hold around 75% of the retail market. Vodafone says it won't launch its first plans until early next year. Telecom says the second quarter next year.
 
IDC says there needs to be incentives for retail service providers (like Telecom, Vodafone/TelstraClear, CallPlus/Slingshot and Orcon) to embrace fibre.

"At present many are still recouping investments from the copper network which was unbundled in 2007. Unlike in Australia where Telstra and Optus have signed agreements to migrate customers to fibre and decommission their old networks, there are no similar provisions for retail service providers such as Telecom and Vodafone to migrate customers to fibre in NZ."

In Australia under the National Broadband Network (NBN) rollout, copper is ripped out at the same time fibre is laid - guaranteeing 100% uptake in quick time as fibre is rolled through towns and suburbs. 

Comments and questions

I've been waiting for them to do an install for months. My house is in the UFB year one area so should have been available to install by 30 Juen 2012. Even now after months when I chekc the address is still says 'available soon'. Wish I understood what the word soon means in the Chorus dictionary. They put the cable into the street so long ago nobody can remember but Chorus has yet to complete the infrastructure. Bloody ridiculous. Six houses down can get it as can one street either way including my neighbour over the back fence.
They should only be paid by install not kilometre then they'd connect people. Who knows how long it'll take them to do later years when they are almost 5 months late on the first and still counting.

"Recently the government said UFB fibre now passes 100,000 premises. But reports from wholesalers and retailers indicate only around 1000 (or 1%) of those within fibre have chosen to connect."

I'm not surprised since few of those areas where UFB has been rolled out are in affluent areas. What sort of possible business sense does it make to roll out UFB in non-affluent areas first, and leave the rich areas to last? This roll out has political interference written all over it. Surely the first priority is to roll it out in areas that can afford to buy it, and who have the cyber sophistication and need to use it, and then you roll it out in the less affluent areas, where its uptake and need is likely to be a lot less. The priority with such and expensive investment should be to get the cash flows rolling in asap. But we forget, this is the Socialist Workers 100% Pure Paradise of Beautiful New Zulland, and the minister must look good when he big notes him/herself Parliament!

Utter nonsense.

If you look at the Chorus Rollout map (http://www.chorus.co.nz/network-upgrade-map) for the first few years it is mostly a combination of wealthy suburbs (remuera and grey lynn/herne bay for example) and commercial areas (east tamaki and rosebank).

The reason uptake is slow is because ADSL2+ is good enough, and fibre is just a tax payer subsidised white elephant that the market didn't want. Think Big for a modern generation.

Au contraire, I think it is you who needs to go and check the map!! By year 3, nothing in Mission Bay, Kohimarama, Epsom, St Heliers, Meadowbank, Glendowie, Mt Eden, Bucklands Beach, Howick, Botany Downs, Pt Chevalier, Devonport, or the commercial area of Parnell, shall I go on? But hey, Otara and Mangere are covered, so is Henderson. That’ll bring the money in!

And let’s not forget this is not just about Auckland either. Many other affluent parts of the country will not be covered by year 3 either.

Completely agree!

I had a Telecon first media turret at my gate in Pakuranga over 10 years ago, till they decided to stop fibre and go adsl as it was cheaper.
With NZ paying through the nose for pitiful amounts of data why would you bother to have it installed.
I currently use the Best ISP in NZ, Snap.net.NZ who deliver 1.3MegS 24X7 and have a 1TB data plan - It is simply the best bar none.
(Tuanz ISP of the year for last 3 years) - I'm not on there payroll just a very happy client:-)

First media wasn't fibre - it has a HFC network using the same architecture as TelatraClear's HFC network. Fibre to the node and then coax to the home.

Why continue spending money on old technology..

All Internet and telecommunications will all end up being satellite based soon enough...

Wireless is how it is going so you would be better off spending the funds there.

ANY broadband would be nice, but since I'm one of those rural folk with only dial-up, I get to put the kettle on and make a cup of tea in the time it takes my browser to load. Perhaps it would be an idea to get the whole population connected first, before rolling out something there seems little demand for.

So if fibre ran by my house, what would be the (average) cost to run a cable to the house and switch the modem - and what would b the benefits?

Isn't the slow roll-out simply recognition that this was another government "national cycle trail" ? And how far has that got?
Fibre was laid past FB's gate over five years ago; not a single connection to date.

Yes, but that fibre was fibre for national transport – not capable of being used for connections to premises.

What a ridiculous waste of money. Whoever said white elephant was right...

Seems like the Emperor's New Clothes. Just because someone said we need faster internet, everyone assumes it to be vital for our country's well-being.

I have been in the IT industry for 15 years as a software developer. I can see no economic advantage whatsoever to faster internet. What we have now is ample. The only people who will benefit are pirates who will be able to increase their downloads of movies, etc (which is already extremely fast).

I just shake my head when I see grass verges and footpaths being ripped up in my town for fibre. Given the state our country is in, it absolutely flummoxes me to see this misdirection of government money.

I think a lot of people are confused about cause and effect. They see wealthy countries (or growing economies) with fast broadband, and assume through some failed logic that faster broadband led to economic growth. I would argue that the correlation is the other way...

Dumb.

Using the uptake of DSL is probably inappropriate to model the update of fibre. Fibre is a completely new network / technology. DSL did change from dial-up, but there was no associated bearer network change.

Mobile may be more accurate to compare, however, this accompanied a major change of use (fixed telephony to mobile telephony) and this would be different for UFB (fixed copper network to fixed fibre network).

A better model would probably be the change from writing letters to having a phone on a unique copper line in every house, or possibly from international travel by sea changing to by air.

How long did those take?

@ #3 nice to see Snap employees trolling NBR.

I think a lot of people have yet to see any real fibre plans. Also, the reality needs to be bedded down and the hype needs to die. A good ADSL2+ connection can perform sufficiently well that most don't feel a need for fibre.

For me, it is a case of data allowance more than speed. If someone was to offer complimentary crashplan online backup/flickr and a bunch of other useful cloud-based services as part of their plan they'd probably get my business.

I believe wireless broadband access is the way to go. Using fibre cable as the infrastructure backhaul at the tower site to control centre, then using broadband wireless base station like LTE or WIMAX for access delivery to the consumer, the end user can use transceiver modem with built-in wifi or USB stick transceiver at their computer.

This way, consumers do not have to wait for fibre cable to be laid in their neighbourhood. Wireless broadband technology is already available now – 2020 to get half of the population on broadband is far too long.

Wireless is a complementary technology. It is not a replacement for fibre to the home.

The demand for internet access is a derived demand. That means individuals do not buy access to technologies, but access to the applications offered over those technologies. The average consumer does not really care what the technology is as long as it allows satisfactory access to the relevant applications. International survey data shows that over 30% of internet users have no idea at all what technology provides their (fixed) internet access.

Thus, the move to fibre will not be anything like the change from letter writing to telephone calls – which were underpinned by new applications (speaking over distance rather than writing over distance). At the present point in time, almost all commonly used applications work well on existing broadband. So the change will be very much like the change from dial-up to DSL. It will occur only when there is overwhelming demand for new applications that cannot operate on the existing technologies and are valued highly by users (and cannot be cost-effectively provided using other technologies). Government intervention (eg, subsidising the price, taking away the copper, etc) may speed up the process (as it has in Japan and Korea). But it does not mean that the new more expensive infrastructure is used more efficiently. Japan has only the same number of internet users per capita as New Zealand, and Korea ranks near the bottom of the OECD when it comes to measures of commercial use of broadband (eg, secure server transactions, websites per business entity, online share of marketing spend). Fast will lead to more efficient use only when the applications exist – and it is far from clear that the do – or if they ever will.

Interesting concept that UFB will not deliver new applications derived from the use of the technology. I believe one of the key arguments of delivering UFB will be the opportunity for new applications to be generated.

This counters the argument that all we will get out of UFB is faster downloads of music and movies, implied by an earlier post. I believe it is expected that "normal" current internet usage (accessing written/pictorial content, including emails) will not be recognisably quicker for residential UFB customers, so it is in the introduction of new applications where UFB will provide the benefit to the country. This is also why the government is supporting it, instead of the commercial entities simply doing it for sound return on investment.

One thing is for sure in the world of historic technological development - the implementation of new applications often occur without any forecast ahead of the conditions being right for their introduction (otherwise someone else would be doing it already), and sometimes they occur before the conditions are right.

I presume international letter writers were only aware of a change in the postal service when they got their replies a lot quicker (by air) instead of the months it took by sea... Otherwise, they were pretty unaware of how their letters got their, only that their far-flung loved ones were "closer".

Wireless broadband may well be a more optimal solution for the deployment costs, but the air waves are probably best kept for use by remote or distributed populations, mobile users and point to point trunking or large scale mass broadcast. Maintenance costs are likely more expensive for cell based, although I don't have figures to hand - distributed active transmission systems sounds more expensive to maintain vs centralised.

Deploying fibre for a cell-based transmission footprint structure may not result in much difference in cost compared to taking advantage of the supporting infrastructure for copper in the deployment of the majority of the UFB (the already deployed fibre to exchanges and the re-use of these facilities for UFB, in the case of Chorus), unless you assume the incumbent wireless providers provide the service, in which case you'd need to heavily regulate the current mobile telephony industry.

References to Japan and Korea in recent post are misleading.

From 2011 data, Japan has ~78/100 internet users per capita. NZ has 10% more at ~86/100. South Korea is in the middle with ~81 (from The World Bank, collated from various sources), although other sources vary. 2012 stats seem to indicate ~2/100 growth in each quoted country in the last year (80, 88 and 83/100 respectively).

Considering the urban/rural divide:

Japan has ~67% urban, 33% rural population split.
NZ has ~86% urban, 14% rural population split.
South Korea has 83% urban, 17% rural population.

Comparing just Japan and NZ:

Considering the urban/rural split, Japan has deployed a fantastic Internet enabled network - they have reached all urban (assuming, for simplicity, 100% of urban connected) and ~40% of their rural population (assuming the rest of the 80% in 2012 is the rural).

NZ has reached all urban population (again, for simplicity, assuming 100% of urban connected) and 14% of the rural population.

This matches anecdotal evidence from NZ - with rural users regularly featured in the media as having no connectivity, or needing to wait a number of years (or similar).

Oh, and correcting some inaccurate text: OECD business use of broadband puts South Korea at the TOP of the list at 98.6% of businesses (with 10 staff or more) in 2009... surely higher now in 2012. Possibly the poster was referring to North Korea (no stats available from the OECD on this).

Also, considering Japan from the OECD stats - they rank at 79.7% of businesses, however they only measured businesses of 100 staff or more. I expect the stats would be higher if businesses of 10 staff or higher were included.

I just want any kind of internet other than dial up. I can see the city from my house and drive there in 5 minutes...but it's no use - broadband is unobtainium. I hear these discussions about what type etc -I'd be happy with basic ADSL.

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