Bill Bennett


Category: telecommunications

New Zealand has a unique fixed-line telecommunications market where fibre companies operate regulated local open access wholesale monopolies. It means retail telecommunications is competitive, some might say too competitive.

Spark and Vodafone dominate retail telecommunications. Vocus and 2degrees are the main challengers. Spark, Vodafone and 2degrees all have mobile networks. Chorus is the main infrastructure company.

Download Weekly – IT spending boom, Amazon’s LEOs

New Zealand tech spending is set to climb ten percent in 2022 – Amazon moves on LEO satellite network plans. 

Gartner: IT spending to hit NZ$15.9 billion this year

Gartner’s latest forecast for the New Zealand information technology sector projects spending to reach NZ$15.9 billion in 2022. That’s up almost ten (9.7) percent on last year.

IT Services will be the largest spending category, accounting for $4.6 billion. It will up ten percent from $4.2 billion in 2021.

Until last year, Communications Services was the largest sector, but it has experienced low growth relative to the wider IT sector in recent years. Gartner forecasts a 2.4 percent rise in 2022 taking the total to $4.3 billion.

Software will be the fastest growing sector. Gartner forecasts spending will increase 15 percent to $3.7 billion.

In 2021, New Zealand spending on information technology climbed 9.7 percent which was in line with worldwide growth of 9.5 percent. This year spending here will rise by the same amount, 9.7 percent, while growth in the worldwide spend will fall back to four percent.

Gartner says the war in Ukraine is not expected to have a direct impact on worldwide IT spending. The areas of activity that are seeing the clearest international growth include analytics, cloud computing, security and creating a seamless customer experience.

New Zealand IT Spending Forecast (Millions of New Zealand Dollars)


2021 Spending


Growth (%)

2022 Spending


Growth (%)

Data Center Systems















IT Services





Communications Services





Overall IT





Source: Gartner (April 2022)

Amazon readies Project Kuiper LEO satellite launches

Amazon has signed agreements with three aerospace companies as prepares to launch its constellation of 3236 LEO satellites.

Project Kuiper is Amazon’s plan to deliver fast, affordable broadband to rural areas underserved by existing networks. A document on Amazon’s website suggests the network will focus on customers in the US.

The network is running about four years behind its rival SpaceX and its Starlink service. That started commercial operations last year and now serves customers in rural New Zealand.

Although there are plans for other LEO networks, they will be even further behind. SpaceX has its own launch capacity and an ability to launch more often than any other space company.

Project Kuiper has earmarked almost all remaining non-SpaceX launch capacity for the next three or four years leaving any rival with limited options to get satellites into orbit. One potential LEO operator, OneWeb, has a launch agreement with SpaceX.

Amazon says it will have two prototype satellites in orbit later this year. It will talk about operational dates after testing its technology.

Aussie regulator examines mobile tower sell-offs

Later this year The Australian Competition and Consumer Commission will hold two consultations on that country’s mobile tower market. The watchdog will examine how a change of tower ownership alters access questions. While Australia is further along the path of tower sell-offs than New Zealand, the ACCC’s move hints at issues the Commerce Commission may consider examining in the future.

Trustpower retail business to join Mercury Energy in May

In a statement to the NZX, Trustpower says it has now met all the substantial conditions for the sale of its retail operation including the telecoms business to Mercury Energy. It expects settlement to take place on May 1. The retail operation has around 234,000 customers.

Worldwide telecom capex boom is slowing

Dell’Oro Group’s latest report says there are signs the boom in telecommunications capex for both wireless and fixed line networks is coming to an end. Last year saw a nine percent year on year growth compared with the previous year. In 2022 the report forecasts capex will increase three percent before “tapering off” in 2023 and 2024.

In other news…

IDC reports spending on compute and storage infrastructure products for cloud infrastructure, including dedicated and shared environments, increased 13.5 percent year over year in the fourth quarter of 2021.

It doesn’t sound plausible, but US investment bank Piper Sandler says 72 percent of US teens own Apple AirPods. The same report claims 87 percent own iPhones and 30 percent have an Apple Watch. It may pay to take that company’s research with a pinch of salt.


The Download 2.0 is a free weekly wrap up of New Zealand telecommunications news stories published every Friday.

All it requires is an email address. Your address is only used to send out the newsletter. I won’t sell it to anyone.

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UFB average speed closes on 400 Mbps

Crown Infrastructure Partners’ latest quarterly report shows a leap in UFB download speeds and significant rural broadband progress. 

Average UFB speed nears 400 Mbps as uptake hits 68 percent

Chorus’ move to lift standard plan fibre speeds from 100 Mbps to 300 Mbps late last year has paid off. In its latest quarterly connectivity report Crown Infrastructure Partners says the average fibre speed in New Zealand is now 398 Mbps. That’s 121 Mbps higher than in the previous report.  

CIP says 48 percent of fibre customers are on 300 Mbps, two percent are on 500 Mbps and 21 percent, or a total of 256,053 connections, are on gigabit or higher speeds.

Fibre uptake across New Zealand is now at 68 percent. Growth has slowed as many customers have opted for the fixed wireless broadband alternative. There are places where more than nine out of ten premises now have fibre. The leading area is Whatawhata in the Waikato where 98 percent of connected premises have taken a fibre service.

Rural connectivity

The last quarter of 2021 saw progress with rural connectivity projects. A further 19 towns were connected to the UFB network bringing the total to 346. Ten more tourism sites were added to the broadband network. A further 12,688 rural homes and businesses now have access to improved broadband, lifting the total to 70,911.

In the quarter 38 new mobile towers were added to the RCG network – there are now 310. A further 70 towers were upgraded.

Uptake on RCG towers reached 40 percent in the quarter and an additional 37 Marae were connected to the network.

Announcing these figures, Minister for the Digital Economy and Communications, David Clark said: “The COVID-19 pandemic has demonstrated how reliable internet is vital to being able to work, learn and socialise from our homes. Access to a good connection should not be a postcode lottery.”

Comment: It’s been a hell of a ride since Steven Joyce first announced the plan to build a fibre network in 2008. Now, 14 years later the pieces are almost all in place and we are seeing the benefits. It is an important technology and one where New Zealand has done extremely well. We are a world leader at providing broadband.

At times I feel more like a cheerleader than a journalist writing about our broadband network. But as the next story shows, building New Zealand’s communications infrastructure doesn’t always run as smooth as the UFB project.

Transmission Gully mobile black spots back in the news

Writing at The New Zealand Herald Chris Keall reports on the numerous mobile coverage blackspots on the Transmission Gully motorway which opened this week. The story suggests the new motorway may need to be dug up to install new cell towers.

He quotes Telecommunications Forum boss Paul Brislen: “The mobile network operators produced a design plan to provide coverage on Transmission Gully back in 2020. Since then, mobile operators have not been able to gain access to the area in order to build any mobile infrastructure prior to the road opening.”

The problem has been known about for some time. Last September Stuff reported on the blackspots days before the planned motorway opening date.

Waka Kotahi, the NZ Transport Agency says the motorway will not need to be dug because there are built-in ducts which can handle the power and data cables needed for a new cell tower.

Trilogy sees 2degrees sale to complete this quarter

2degrees parent company Trilogy International Partners says the business saw revenue grow seven percent in the fourth quarter of 2021.

In a statement outlining the 2021 results Trilogy says fixed broadband subscribers increased 13 percent and postpaid mobile subscriber numbers were up 8 percent. Business post subscribers were up 24 percent compared with a year earlier.

CEO Brad Horwitz says the $1.3 billion sale of 2degrees to Vocus Group Limited “crystallises value for our shareholders at a valuation which reflects the accomplishments of our team in New Zealand”.

He says: “The sale process continues to advance as expected and was recently approved by Trilogy shareholders as well as the New Zealand Commerce Commission and the New Zealand Government Communications Security Bureau. One additional government approval remains, the Overseas Investment Office, which is expected in the second quarter.”

Vodafone leverages RCG sites for IoT reach

Vodafone says it is working with the Rural Connectivity Group to extend its Narrowband Internet of Things network. In the next few years it expects the network to cover 60 percent of the country.

Tuatahi notes Fortnite surge

Hamilton-based Tuatahi says it saw a 20 percent surge in data on the company’s wholesale fibre network on March 20. That was the day Fortnite Chapter 3 Season 2 was released. CEO John Hanna says it was the highest spike on Tuatahi’s network to date, but there were no bottlenecks for customers.

Chorus submits price path statement

Chorus published an announcement to the NZX on Thursday saying the company was submitting its first price-path compliance statement to the Commerce Commission.

The maximum revenue for 2022 is $692 million. This includes pass through costs of around $16 million. In its statement Chorus forecasts its regulated fibre revenue will be $657 million.

Price-path compliance statements are part of the new regulatory framework for fibre services. The statement aims to confirm that revenues will stay below an agreed level for a set period.

NZME in revenue talks with Meta, Google

New Zealand Herald publisher NZME looks to be the first local media company to negotiate a commercial deal with Meta and Google. The deals compensate media companies when tech companies publish their material online.

Jarden analyst Arie Decker says: “The increasing likelihood of a deal with Google and potentially Meta would provide another important source of new revenue for NZME.” He estimates the deal will be worth between $2.5 and 3.5 million a year in the first five years growing eventually to nearer $5 million.

In other news

Rob O’Neill reports for Reseller News on plans for yet another large scale data centre. Like Datagrid, T4 Group aims to build in Southland where it can take advantage of a cooler climate and access to hydro power. Speaking of Datagrid; Stuff reports the company has called for expressions of interest to build its Southland data centre. The Domain Name Commission has launched its online dispute resolution pilot to help .nz domain name holders resolve .nz domain disputes in a more time-efficient and cost-effective manner.


The Download 2.0 is a free weekly wrap up of New Zealand telecommunications news stories published every Friday.

All it requires is an email address. Your address is only used to send out the newsletter. I won’t sell it to anyone.

I’m not collecting the data for anything other than sending out the newsletter. You name isn’t going to be sold anywhere.

MBNZ records leap on 300 Mbps upgrade

Last year’s fibre speed upgrade from 100 Mbps to 300 Mbps has paid dividends. Starlink has increased prices overseas with local changes expected to follow soon. 

MBNZ records leap as popular fibre speeds triple

In its latest Measuring Broadband New Zealand report, the Commerce Commission says the average download speed is now 314 Mbps.

This is a result of moves by fibre wholesalers to boost speeds on 100 Mbps plans to 300 Mbps at no extra cost. The initiative was first pushed by Chorus as a way of meeting competition from fixed wireless broadband and taken up by the other fibre wholesalers.

All the benefits of this upgrade have been passed on to customers.

The report found average peak hour download speeds on Fibre Max plans have improved in the last three months. The average is now 841 Mbps. That’s up from 807 Mbps late last year. Almost three quarters of tests run on Fibre Max lines now show speeds above 900 Mbps.

Past surveys showed customers on Vodafone’s HFC Max plan experienced a speed decrease. This has now returned to normal.

Almost every customer (99 percent) with a Fibre 300, Fibre Max or HFC Max plan is able to stream four simultaneous UHD Netflix streams.

Telecommunications Commissioner Tristan Gilbertson says these results highlight the difference between popular fibre plans and lower speed broadband technologies – including 4G wireless broadband and copper. This is important for homes where more than one person is using the connection for high data use activities such as online gaming and video streaming.

He says: “Ensuring consumers understand the speed they can expect from different technologies is critical to them choosing the broadband plan that best suits their needs. This reinforces why we issued our marketing guidelines last year, which has led to retailers using MBNZ results in their advertising.”

Starlink hikes prices

Starlink has raised prices for customers in the US by between 10 and 20 percent. The low earth orbit satellite broadband provider says the increase is a result of inflation, which has taken off worldwide in recent months.

The US price of its antenna hardware will climb from US$500 to $600 for new customers. American customers will see the cost of a monthly connection rise from US$100 to $110.

At the time of writing Starlink has yet to communicate any changes to New Zealand users. The price of the hardware has already increased once for customers here.

When the service launched the hardware price was NZ$800. It is now $1040. If local prices increase in line with the US, customers here can expect to pay over $1200 for the hardware. Reports from overseas suggest each antenna kit costs Starlink around $3000 to make and dispatch.

Monthly charges in New Zealand are $160. Local customers can expect that to rise to around $180.

Trademe, other services block local Starlink accounts

Users on a Starlink discussion on the Geekzone site have reported problems connecting to services such as Trademe which rely on geolocation to permit traffic.

The problem was caused when Starlink moved users to a new point of presence. The company says the affected service providers have yet to update their list of allowed IP addresses.

One Geekzone poster suggests the problem also affects streaming services from Disney+ and TVNZ as well as the Lotto website.

Spark takes Adroit slice

Spark now owns close to 40 percent of Adroit, a specialist in environmental internet of things technology.

Mark Beder, Spark technology director, says it is a strategic investment reinforcing his company’s commitment to IoT. He says: “Our three-year strategy identifies IoT as a key future market, and in the last financial year we saw strong revenue growth and an 83% percent increase in connections.”

Spark issues sustainability bond

Spark’s Finance subsidiary has completed the bookbuild for a 6.5-year NZ$100m Sustainability-Linked Bond.

Sustainability bonds are a form of finance where the cost is linked to meeting goals such as carbon reduction.

In this case Spark pays an interest rate of 4.37 percent if it can reduce greenhouse gas emissions. If it fails to meet a 56 percent reduction by June 30 2026 it will pay a higher rate.

AWS: One million Kiwis need more digital skills

Cloud vendor AWS issued a report on the state of digital skills in New Zealand businesses. It says a third of workers, about a million people, will need to pick up more digital skills in the next year.

The report put it in more polite terms, but says New Zealand has one of the biggest ‘skills gaps’ of any country AWS has surveyed. In part that’s because we have embraced digital technology more than other nations.

Predictably AWS identified cloud skills as an area needing urgent attention. It also singled out cybersecurity skills.

Spark Sport adds more Netball coverage

Spark Sport has the New Zealand rights to Suncorp Super Netball, the world’s largest netball competition. Games start this weekend, the first match features the NSW Swifts against the Giants. Spark Sport also has rights to Australian international fixtures, although not games featuring the Silver Ferns.

Spark hires Beckett as strategy director

Aliza Beckett is to join Spark’s leadership team, taking on the new role of strategy director. She joins from Liberty Global London, a telco specialising in converged communications. Before that she spent time with Amazon Studios, YouTube and McKinsey. Beckett takes up the job in June.

In other news…

A cyber attack on the day Russia invaded Ukraine disrupted residential broadband services across Eastern Europe. The outage affected Viasat’s satellite operations and customers of at least six ISPs. At the time of writing, late Thursday evening, connectivity problems continue to affect users.

In related news the US Cybersecurity and Infrastructure Security Agency (CISA) issued an alert over potential threats to satellite networks as America braces for expected cyber attacks(story behind paywall).

‌Tarana Wireless a US-based wireless broadband technology company closed off a funding round as it prepares an IPO. The company offers a low-cost fast broadband technology that delivers gigabit speeds via fixed wireless networks.

Customers of Apple’s online services experience outages on two days this week. There were problems with Maps, the App Store, Apple Music and the online story. The outages were not related to cyber attacks.


First copper cabinets decomissioned

Chorus turned off the first batch of copper cabinets while the Commerce Commission cleared the Orcon-2degrees merger.

Urban copper removal underway

If everything goes to plan, by the time you read this Chorus will have turned off the power at 28 roadside cabinets serving the copper phone network. The cut off was scheduled to take place this week.

It is the start of a process to decommission cabinets on the copper network in places where people have access to fibre. The process could take up to four years.

The copper switch off comes at a time when connections on the network are plummeting. In its recent Annual Telecommunications Monitoring Report, the Commerce Commission reports that copper connections dropped 30 percent in the year to last September. At that time there were 308,000 copper connections.

The technical part of moving customers off copper may be simple, but following the Commerce Commission’s Copper Withdrawal Code is less straightforward. The code specifies the notice Chorus has to give customers before it can remove their connection.

At least six months

In normal times the process takes at least six months and involves three written notices. It took much longer to decommission the first 28 cabinets because parts of New Zealand went into lockdown after the process started making it hard to install new fibre connections. That saw the process put on hold for six months and more rounds of notification letters.

Because Chorus is a wholesale company, it doesn’t have a direct relationship with the customers using its lines. This means it has to work with retail services providers during the shut-off process – they own the customer relationship.

There’s a Commerce Commission-lead review of the withdrawal code scheduled for May which may refine the process.

Chorus plans to cut the copper connections to a further 13,500 customers this year.

There are no plans to turn off the copper network in places beyond the fibre network.

Regulator clears 2degrees – Orcon merger

The Commerce Commission says it is satisfied a planned merger between 2degrees and Orcon will not “substantially lessen competition in any New Zealand market”.

The decision means instead of four major retail telecommunications companies there will now be three.

Deputy Commission chair Sue Begg says: “The evidence before us indicates that the merged entity will continue to face strong competition from existing competitors, including Spark and Vodafone”.

She says: “While the transaction will result in the vertical integration of 2degrees’ mobile network with the largest mobile virtual network operator (MVNO), Vocus, we do not consider the transaction will significantly change the incentives of network operators to grant access to MVNOs.”

MVNOs make up less than one percent of the mobile phone market.

While the merger is not certain, at this point there is little to stop it completing.

Orcon CEO Mark Callander, who will head the merged business says it is the first step in the regulatory approval process.

He says: “While we await further regulatory approvals, both companies continue to drive their businesses forward, delivering quality services and support for all customers.”

Before the two companies entered merger negotiations both were planning listings. The business was part of The Australian Vocus group and until late last year was known here as Vocus NZ. The Australia parent company’s new owner was looking to float the New Zealand business on the NZX. 2degrees has also explored a local float.

Analysis: 2degrees-Orcon merger

One of the justifications for merging two telecommunications companies is the huge potential cost savings that can come from combining and simplifying internal resources and processes.

That and cross selling opportunities such as exposing former Orcon customers to 2degrees mobile network sales or 2degrees customers to Orcon’s power utility products.

It sounds good and it can be, yet New Zealand telecommunications sector mergers have been notoriously messy affairs in the past. In part this is because of difficulties consolidating back-end systems. Vodafone took years to integrate systems from ihug and TelstraClear. That was one reason Vodafone struggled with customer support for years.

Even if the new merged business can avoid the Vodafone-TelstraClear experience, it will be inwardly focused for months to come as it works through aspects of bringing two companies together.

Monitoring report shows fibre, fixed wireless progress

The Commerce Commission’s Telecommunications Monitoring report for 2021 shows fibre now accounts for 64 percent of broadband connections. In September 2021 1.78 million households were able to connect to fibre and 1.18 had made the move.

Fixed wireless climbed 25 percent in the year to September 2021 and now accounts for 15 percent of connections. The report says this means New Zealand now ranks at the fourth highest OECD nation for fixed wireless.

The report suggests that high-use broadband customers get a better deal by international standards than low-use customers. The reverse is true for mobile users. Entry level plans are cheap in New Zealand by international standards while local high use mobile plans are more expensive than overseas.

Worldwide telecom equipment market up 7 percent in 2021

Dell’Oro Group says the telecommunications equipment market grew 7 percent in 2021. It was the fourth consecutive year of growth underpinned by investment in wireless technology. The total equipment market is now worth close to US$100 billion a year.

Huawei remains the largest supplier with about a quarter of the worldwide market. However, this is in part because China is the largest single market. Taking that country out of the picture would see Nokia and Ericsson tie for top spot. Each have around a 20 percent market share. Outside China, Huawei is third with 18 percent share.

… in other news

Customers of the soon to close Vodafone TV service who bought the companies set-top boxes from retailers will get partial refunds. The move affects about 40,000 customers. Those who purchased the $179 box in the last nine months will get a full refund. Others will get a smaller amount depending on when they purchased the device.

High-tech is now a major part of New Zealand’s exports to the US. A report issued by the NZUS Council says digital services accounted for $682 million in exports to the US.

A study by security company Norton found a third of New Zealanders experienced cybercrime in the past year. On average we each spend 4.8 hours attempting to resolve the issue and there was an average loss of $135.

The Office of the Privacy Commissioner has awarded its Privacy Trust Mark to Securiti’s PrivacyOps. The product is a tool to help organisations understand the data they hold. It can link to the data allowing them to use it more efficiently.

NZ cell towers are for sale

Vodafone says it is preparing to spin out its cell tower network, Spark announced similar plans a month ago. Why is this happening? 

Cell towers on the block

Vodafone and Spark have both revealed plans to sell their networks of cell towers. Both telcos have close to 1500 towers which could unlock a billion dollars or more each.

Spark took the wraps off its plans to establish Spark TowerCo when it announced its half year result in February.

At the time Spark New Zealand Chair Justine Smyth said: “…in the second half Spark intends to establish Spark TowerCo to improve the utilisation and capital efficiency of its passive mobile assets and open up opportunities to introduce third-party capital.”

Spark CEO Jolie Hodson says establishing a TowerCo would “…improve the performance, utilisation, and capital efficiency of its passive mobile assets”.

This week Vodafone announced a similar plan. The company’s part owner Infratil told investors last month plans for a tower spin-off were at an advanced stage.

On Monday Vodafone said it has engaged Barrenjoey and UBS to advise the company on a sale. The company’s press release mentions the possibility of using shared infrastructure.

Analysis: Why telcos are selling mobile towers

New Zealand’s mobile operators are late to the tower sell-off game. Vodafone Australia sold 140 of its towers 14 years ago in 2008. Since then there have been many similar deals around the world.

The logic is straight-forward. In the fibre era, mobile phone towers represent the bulk of a telco’s capital investment.

Towers can account for a large slice of operating costs. Spinning them off and renting them from tower companies and, in some cases, from rival operators or the tower companies set up by rival operators, can cut costs.

More importantly, these deals can boost margins. That looks like delivering better value for shareholders.

The move can be a step on the path to shared infrastructure. This was controversial at one time but the success of the Rural Connectivity Group which builds shared mobile infrastructure for the three mobile companies has removed any fear from not owning towers.

While mobile operators might not want to share wholly-owned infrastructure with rivals, that is not going to worry a tower operator. Indeed, they will woo potential business.

Strategic value

It’s worth mentioning that at an earlier stage in nationwide mobile roll-outs, networks of towers had strategic value to operators. With coverage approaching 100 percent of commercially viable sites, that’s no longer the case. There is no competitive advantage in owning towers in 2022.

There’s another angle to consider. Over time higher frequency spectrum will become available for 5G networks. Higher frequencies require greater tower density, that means more towers. A lot more towers. Getting that cost off the telco balance sheet and establishing shared infrastructure now will make that a less daunting proposition for mobile company shareholders.

European mobile companies have raised billions of dollars selling their towers. There are plenty of willing buyers with large businesses building up international tower portfolios. It’s an attractive proposition for them because they have guaranteed long term tenants.

TVNZ RNZ merger to complete by next year

Broadcasting and Media Minister Kris Faafoi confirmed the government will move ahead on its plan to merge TVNZ with RNZ. He said the deal will see the two businesses fully merged by the middle of next year.

The deal will see RNZ remain commercial free. TVNZ will stay commercial but would no longer pay a dividend to the government. It appears the merged business will be a not-for-profit operation.

World phone market up 6 percent in 2021

Gartner says worldwide phone sales grew six percent in 2021 after falling in 2021. Yet the research company says the numbers would have been better were it not for component shortages and supply chain problems.

Samsung remains top brand with 19 percent market share. Apple remains in second place head of Xiaomi, Oppo and Vivo in that order. The remaining companies accounted for 32 percent of all units shipped. Their share continues to fall, last year they represented 40 percent of the market.

Rival research company IDC has similar numbers for the brands while putting the market increase at 5.7 percent.

Apple launches low-cost 5G iPhone SE

This year’s iPhone SE includes support for 5G networks. The SE is a smaller size iPhone with a 12 megapixel camera. It costs NZ$800 and will go on sale next Friday, March 18.

…in other news

US Commerce Secretary Gina Raimondo reminded China’s technology companies of the fate dealt out to Huawei. She says they could be in the same boat if they sell to Russia. Raimondo has China’s top chip maker Semiconductor Manufacturing International Corporation (SMIC) in her sights, but it could apply to others attempting to fill the gaps left by western companies.

Dell’Oro Group says the worldwide SD-Wan market grew 35 percent in 2021 as enterprise customers optimised networks for cloud services. It hit revenues of over US$2 billion. Cisco is the market leader with Fortinet in second place, VMware, Versa and HPE are the other top five brands.

At Reseller News Rob O’Neill reports on boom times for New Zealand’s tech sector. Stats NZ says sales of software and services are up 39 percent over the last two years.


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Benoit Felten on the UFB fibre upgrade

In late 2021 New Zealand’s fibre wholesale companies boosted standard speeds on their networks from 100mbps to 300mbps. In this guest post, Paris-based analyst Benoit Felton puts the move into perspective:

As an international analyst of all things broadband, I use few examples more frequently than New Zealand when discussing decisive and effective policy. I have followed the development of the structural separation plans and the fibre rollout. To see New Zealand in the top tier of every international assessment of broadband quality is thrilling.

In September, Chorus announced plans to upgrade its wholesale 100 Mbps fibre connection three-fold, at no cost to retailers. This may seem like a surprising move – few businesses upgrade their customers for free. Yet it’s an adjustment to the evolution of broadband usage in New Zealand.

Over the last few years, there have been several fundamental shifts in broadband usage. Because they were gradual, they went largely unseen. Covid prevention policies acted as a catalyst and boosted these emerging trends. They are now here to stay.

The changes fall into three areas:

Working from home

Even after Covid restrictions are fully lifted, organisations will continue to rely on people working from home, at least as a part-time measure. The main consequence for customers is that their broadband connection at home has become an absolute necessity, something they rely on to earn a living.

High speeds, low latency and stability are vital for a majority of users. They no longer simply for a small group of early adopters.

Online learning

Similarly, while aspects of home schooling will disappear as restrictions lift, online learning is here to stay.

Lockdowns have taught schools, teachers, and education authorities that better online resources at home could improve education. This means interaction (between students, teachers or external contributors), video consumption, and cloud-based resources. These uses are similar to what people need to work from home. School related uses may now happen concurrently to parents’ work from home needs, meaning that a single user’s needs no longer determine the broadband requirement.

Video communication

Video-communication has become an everyday tool. During the lockdown, many people who had never made a video-call, particularly among the older segments of the population, learned to use it and realised how important and easy it was. Video-communication usage skyrocketed during lockdown and is still at its highest post-lockdown in many countries.

From a broadband service point of view, these fundamental changes have several consequences worth noting:

  • Broadband usage has gone up across the board. Users that could be considered casual pre-Covid now have similar usage patterns as heavy users. Users are more frequently saturating their connection and feeling its limitations.
  • The perceived quality of broadband is no longer solely about download speeds but also about upload speeds. As more users focus on real-time video services and cloud workspaces, the upload performance becomes a vital component of a decent broadband solution.
  • Availability and stability are becoming critical aspects of a good broadband connection. Users are more mature and understand that just because a broadband service performs well at one point in time doesn’t mean it will perform well all the time, particularly at peak viewing hours in the evening.

Fibre has few direct competitors

As an outsider looking in, it’s hard to understand why consumers would accept alternatives to fibre where it is available. Few other technology solutions can boast speeds at or above 300 Mbps consistently, and all are constrained either by limitations of the technology, lack of maturity or economics:

  • Satellite solutions such as the ones launched by Space X (Starlink) or planned by Telesat and OneWeb can deliver speeds around 100 Mbps downstream. Yet they are heavily constrained with upload speeds (around 15Mbps). At the moment, this technology comes with a heavy price tag.
  • 4G fixed wireless solutions to the home struggle to deliver download speeds above 70Mbps with the Commerce Commission reporting the average being only 32.7 Mbps. Elsewhere in the world, fixed wireless is deployed where fibre is not available, not as a competing solution. The main reason is that from a performance perspective it cannot compete with fibre to the home, on speed or stability. It’s no mystery therefore that New Zealand providers are not meeting their fixed wireless targets.
  • 5G fixed wireless access can theoretically deliver higher speeds, but over much shorter distances which means, to enhance the customer experience, many more base stations than currently exist are needed. There are concerns in the industry that there may not be a strong economic case for deploying so many, and currently no one has demonstrated its success. Japanese company Rakuten is rumoured to be the most advanced in deploying such a dense fixed wireless network, but the complicated overall financial situation of the company makes it hard to assess any success in this respect. Pushing for 5G FWA deployment when open access fibre is available to 87 percent of New Zealand seems absurd.

Leverage gigabit broadband

New Zealand should leverage its gigabit head start. Fibre to the home not only delivers the speeds needed by the evolution in usage, it’s also the simplest medium to do so. It is already largely deployed, needing only a home installation to be ready. It allows for open access competition under the structural separation regime in place in New Zealand and it has plenty of space for future upgrades in speeds, not only 1 Gbps, but way beyond: most fibre company networks are already 10 Gbps-ready in New Zealand and 25 Gbps is just a technical upgrade away.

Chorus’ free fibre upgrade is a savvy response to the evolution in usage we have seen since the pandemic. The choices made by government a decade ago made this possible. This upgrade furthers that.  In ten years, New Zealand has joined the best in the world. It offers fast and affordable broadband to its citizens. This new step up in performance will only reinforce that leadership position.

Felton refers to Chorus here. Since September the other fibre wholesale companies have rolled out similar speed upgrades