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UFB hits 100,000 premises-past milestone – but connection numbers grimmer reading

There are now more than 100,000 urban homes, business and schools able to connect to the Ultrafast Broadband (UFB) project, ICT Minister Amy Adams said in a statement this afternoon.

The UFB, backed by $1.35 billion in taxpayer funding, officially kicked off 16 months ago, but has been under way in earnest since June.

At its annual meeting last week Chorus – which holds close to 80% of the project by premise – said it has now laid fibre past 72,000 premises.

However, only 700 premises have taken advantage of the opportunity to connect fibre from the kerb to their home or business.

Yesterday, Enable, the council-owned company that won the Christchurch UFB contract, told NBR ONLINE it had 1021 fibre connections, or 471 more than June 2011 (the company has rolled in its existing fibre connections to its total).

Last Thursday, the government announced a deal with the four UFB companies (Chorus, Enable, Ultrafast Fibre and Northpower) to provide free residential connections until the end of of 2015.

It is hoped the deal will accelearate the so far sluggish fibre adoption, and encourage the big two retail ISPs Telecom and Vodafone (now including TelstraClear), to launch residential fibre plans.

Telecom has said it will launch early next year. Vodafone has yet to set a date. CEO Russell Stanners has told NBR that the UFB install experience is far from ready for prime time.

RAW DATA: Statement from ICT Minister Amy Adams statement

Ultra-Fast Broadband milestone reached

More than 100,000 end users in urban areas are now able to connect to the Ultra-Fast Broadband network, only 16 months after the project started.

Communications and Information Technology Minister Amy Adams today released the latest quarterly report on the government’s Ultra-Fast Broadband (UFB) and Rural Broadband (RBI) programmes.

The report shows good progress continues to be made on a project that will ultimately transform New Zealand’s connectivity.

More than 1000 schools have access to fibre under both the UFB and RBI programmes. Furthermore, 14 of New Zealand’s most remote schools have been connected to faster broadband.

In addition to the UFB numbers, under the government’s RBI programme a further 55,000 rural homes and businesses have access to improved fixed wireless broadband through Vodafone, and 23,000 users through Chorus have enhanced fixed-line services.

Ms Adams says more than 2400 customers have already made the decision to subscribe to a fibre-based service under the UFB programme, which is in line with government expectations and overseas experiences.

“This indicates gradual early stage uptake, which is to be expected at this phase of the build, with only a few retail products so far on offer. We expect uptake to increase markedly as the build reaches greater completion,” Ms Adams says.

“The deployment of this digital technology is one of the largest and transformative infrastructure projects ever to be undertaken in New Zealand. UFB covers 33 towns and cities, and involves thousands of kilometres of fibre being laid over an eight-year period.

“Taking fibre direct to businesses, schools, hospitals and households will bring significant gains for productivity, innovation and global reach.”

With the combined efforts of the UFB and RBI programmes, 97.8 per cent of New Zealanders will have access to faster broadband.

Comments and questions

congratulations to the skoda driving walkshort wearing cardy brigade in Wellington who thought this was a great idea. The market has spoken and it is a stinker.. Now what???

To be fair it will pick up once the main ISPs start offering fibre products. At the moment the choice of ISP is limited to ones that I wouldn't use (and hence why I haven't signed up!).

Agree. WIthout Telecom and (now) Vodafone, it isn't really a true indication.

UFB is a crock. It will not work. CFH needs to renegotiate access pricing and RSP arrangements. The failure of Pacific Fibre and the inability to drive international bandwidth prices down to around $10/Mbps/month in volume are the final nails in the coffin.

Don't forget the huawei nail in the coffin. People are sick of paying a fortune for NZ style broadband aka fast dialup and they don't want the Key government telling them that China's government should be allowed to watch what you do with you internet connection

I won't be connected to UFB until 2016

It's hardly surprising that uptake is low and I think the headline is unnecessarily sensational and not justified by any of the material in the body text. And what about journalism and thoughtful comment on the content of the excerpt from Amy Adams' statement.

It has been widely acknowledged that consumer take-up will be driven by applications rather than there just being fibre available. Most domestic premises will need some level of rewiring and packages and vendors are not currently widely available. We've all heard the term "early adopters" - this comes from the Everett Rodgers model of diffusion of innovation - the first off the rank are innovators, followed by the early adopters. The first difficult transition is that to mainstream entry - this marked by the early majority followed by the late majority and finally a few laggards. This model suggests that the rate of diffusion is driven by consumer perceptions of benefits, the immediacy of benefits, the riskiness of the purchase decision, the price, the cost and level of changes required to existing patterns, availability, trialability, price and so on. Frank Bass developed a detailed evidence based model for the rate of diffusion which broadly follows this pattern. A far more interesting and worthwhile, but far less tabloid sensational NBR report would have reported on the numbers, discussed the demographic profiles of the areas in which the 100,0000 premises passed are located, relate those to census data and explored the market opportunities which will arise as the number of premises passed increases.

Now I am not a born again fibre-ite and I do not think that it will somehow magically transport us in the direction of nirvana, but I do think that it is not surprising to see low take-up at this stage. For the first Anonymous - the market has not spoken at all - in fact the juryis still out. In my opinion your comment is uninformed. The second Anonymous blames international bandwidth, access pricing and RSP arrangements for slow uptake. International bandwidth and competitiveness is a difficult issue to really deal with although there are lots of simplistic opinions. I am not sure if using the Government's relationship as fibre investor via CFH to artificially drive uptake through access pricing and RSP conditions holds the answer either. This Anonymous misses the point that if there was a market demand for near ubiquitous coverage of fibre now more of it would have been built. The Government has made a risky long term investment in fibre, in advance of a clear business case with shorter term repayment requirements. The Government likely accept that uptake may be slow but have proceeded with the build in order to achieve policy goals in infrastructure provision, and providing a basis for economic growth across the majority of the population.

NBR, I personally think this is a more interesting story, and although its only my opinion, at least it might possibly provoke some more thoughtful comment than the Anonymous fraternity.

Is it right to expect the Government to support another cable? Should they have backed Pacific Fibre, and if so why, and if so where would the funds come from and why? Maybe we are not seeing more applications because there needs to be a critical mass of customers first to justify the investment, or do New Zealanders expect the Government to support that too until it is commercially feasible? My challenge to the Anonymous and non-Anonymous commenters is to debate these kind of issues a bit more thoughtfully. Erhrm ... well my hope anyway!

75% of internet users are with Telecom, Vodafone or TelstraClear so they haven't had the choice of fibre unless they switch providers - hang their demographic.

Confusion and conflict over who pays the kerb-to-the-premise connection cost has been a key reason the big three have stayed on the sidelines.

NBR has discussed RSP agreements, pricing and other criteria number of articles, plus Telecom and others' desire to bundle fibre with added-value applications and the controversy over pay TV and content agreements.

The gist of the article above is that fibre has been laid past a decent amount of premises in a few months, but few of those premises - whether they're occupied by innovators or some other tech demographic - have any option to commercially connect.

Chris - that first sentence should be in the article (and every future article) as it is the key.

Chris - your response is fair comment and puts it in perspective too. My main point was not to take a swing at the NBR however, since I read daily and find it always worthwhile. I have read the NBRs ongoing coverage, but of course didn't provide any bouquets, (reserved my response time for the brickbats!) I think my beef was more with the headline rather than the content. I did get the main gist of the article as you set it out of course.

The key thing I still struggle with though is that it is not enough for any of us to think that "if we build it they will come" immediately.

Commercially no-one will invest and provide the incentives for uptake, until the drivers for usage are there to ensure payback. For businesses, healthcare, e-government and education, there will be more of a business case depending on circumstances, but for consumers it simply is the case that the drivers for general adoption do not exist ... yet.

The controversy over Pay TV and content is of course a part of it as you note. Also I agree that the kerb to the premise issue has been a key element in discouraging the big 3. Consumer uptake will be slow as all these issues are solved and content and other apps become available and the kerb to the premise issue will slow it further still, particularly since the current status of that issue seems like it may be designed to stimulate enough early uptake to get the critical mass of customers on fibre needed to incentivise retail providers to solve the problem for later adopters.

I keep coming back to the point that where there isn't a commercial case, and the Government invests earlier than business seeking to achieve policy goals, its unrealistic to expect early growth in connections in relation to premises passed, especially where there is limited early commitment from the big players and other strong disincentives as you point out.

The same people moaning about low uptake now would no doubt be exactly the same people moaning in 10 years time if the Govt had done nothing.

I'm a little more cynical than you, especially with the government investing so much money is what was already, internationally, second-rate speeds, prior to the first work being done on the project.

It's been a darned expensive folly, for the infrastructure. Without a significant price-drop, significant uptake cannot be a realistic expectation.

Is the government investing in second-rate speeds? What's slowing the speeds down?

from what I can see, fibre's a pretty fast product - once you're on it.

A quick google-search shows that BT (UK) is currently offering 160Mbps down / 20Mbps up, for a measly 35 Pounds Sterling a month... and personally, my address isn't due to have this 100Mbps available for another 3+ years.
I consider that will be 3rd-rate by then.

that BT plan is only available in an extremely restricted number of addresses (a lot less than FTTH is available in NZ). Most of BT's 'Fibre' rollout is actually FTTC, something that NZ has had for several years to around 75% of households.

and the price you see there also requires a landline, which costs an extra 10 pounds. so the real price is 45 pounds, or about 90 dollars. Orcon offer unlimited UFB for $99, so it is actually fairly close.

The price is within 10%; the speed is not.

The Orcon $99 offer is only for 30Mbps up - the 100Mpbs unlimited plan is another $35, according to their website today. Their cheapest fibre plan, with 30GB data, is $110/mth, whereas that BT offer is for unlimited data at a faster speed up (the maximum down speed is lower).

From a personal perspective. We have fibre running past our home; unfortunately the contractor ran a connection to every house in the street but ours. When we rang Chorus about it they assured us there was a connection to our house. Based on this we decided to switch to fibre. It took Chorus six weeks to turn up to run fibre from the street to our house and surprise surprise there was no street connection. A month later we are still waiting for Chorus to sort it out. I am not surprised that only 700 homes have connected to UFB if this is a normal experience.

I moved into a new house in Millwater, north of Auckland. The subdivision has fibre however we are limited to one provider - World Exchange - they have some very bad plans compared to what is being offered by other companies. A call to them to discuss other plans such as Telecom or Vodafone have was met with "no plan to increase the GB limit any time soon" Not good. My next call was to Chorus to see how long World Exchange have their agreement for - guess what, no reply from them on that question.
So the Government and Chorus are saying 700 houses have signed up however in our case we had no choice - if we didn't then no phone or internet.
I think the Government have to change the rules to allow multiple suppliers into new sub divisions otherwise people will switch to mobile solutions.

I have the same issue, a rip off fibre deal with World Exchange in a new subdivision. I believe an announcement is coming very soon from Chorus regarding a change from existing BOF to UFB. Something to look forward to...a choice!

lets see it costs more, it is known to have provisioning nightmares and the main provider is gunshy on doing anything inovative... Thanks but no thanks, my existing copper is fast enough

Gosh I can't wait to use my limited data allocation even faster!

Sure we will be connecting New Zealanders to each other at greater speeds - which is good for small businesses - but we need to start thinking more globally before we will see the true benefits of this initiative.

Here's hoping something comes from Kim Dotcoms claim of kicking Pacific Fiber off again.

This is a prime example of top down supply economics from a centralised source (the government). It has consistently failed everywhere (soviet union anyone?) and is failing here. Let the laws of supply and demand drive UFB

the hypocrisy stinks. The very people moaning that they dont want want it were most likely the very same people who where demanding it not so long ago.

My home BB is pletny fast and I have already invested in a DSL router. can get unlimited data on my plan so why would I change?

At this rate it will take 5 years for one million subscribers. A great investment for our 1.3 billion dollars!!

The house I'm living in is located in a UFB neighbourhood. We decided to take up the offer from Orcon. A couple of guys came around to hook us up, spent several hours failing to locate the External Termination Point (apparently the telephone cable from the street to the house is buried) and decided that connecting us up fell into the "too hard" basket.

Once Telecom and Vodafone start offering UFB packages I think you'll see a lot more people trying to get connected - and I forecast the contractors actually doing the connecting are going to be overwhelmed, resulting in a lot of unhappy potential customers.

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