The end of copper: New Zealand retires its old phone network

Portugal Telecom says it will start closing copper switches next year. By 2020 that nation’s copper network will be history.

The telco says being fibre-only will help it sell services in a competitive telecommunications market.

Analyst Benoit Felten notes removing copper means Portugal Telecom will no longer have the cost overheads of running two networks in parallel.

Copper: In New Zealand it’s complicated

Removing copper is more complicated in New Zealand. Even so it is still a good idea.

It will lower costs and simplify the telecommunications market. Pulling out copper will reduce regulatory tensions. It will take the political heat out of the market and force service providers to focus on future technologies. It will spur further innovation.

A decision is overdue.

There are barriers:

Regional New Zealand needs copper for years to come

The first stage of New Zealand’s nationwide urban UFB fibre roll-out finishes in 2020. It will reach the 75 per cent of the population living in cities and larger towns. Stage two will take the total to around 80 per cent of New Zealanders.

Some customers not covered by UFB will be able to get fixed wireless broadband from the Rural Broadband Initiative. Vodafone is building new RBI towers outside of the main population areas.

Most are now built. More towers are on the way. The RBI can be extended.

At first, RBI customers found performance unsatisfactory. That was when the fixed wireless broadband service used 3G cellular technology.

Rural fixed wireless improving

With 4G cellular, rural users are getting fibre-like speeds. I spoke to one farmer buying fixed wireless from Spark who had 80 Mbps. That’s good by any standard.

Fixed wireless is now possible on other cellular towers. It is also available in cities thanks to Skinny Broadband. Other fixed wireless services will start soon. Expect competition. There are also specialist providers servicing rural markets with other innovative wireless products.

There may be further UFB and RBI extensions later. For now around 10 percent of the nation falls into the gap between the two programmes. All things being equal, copper could serve these customers well into next decade. Their copper lines will have to remain intact for now. But swapping them out is possible.

Chorus owns the copper network

Chorus still owns the nationwide copper network. That’s not a problem in the areas where Chorus also owns the new UFB fibre network. In those areas Chorus has a clear financial incentive to move customers to fibre.

In places where other fibre companies — that’s Northpower, UFF and Enable — operate, the Chorus copper network competes with fibre. It remains a lucrative source of revenue for the company.

Over time that revenue will drop as users switch, but for now it is important.

Should the government decides to close the copper network in these areas, Chorus may have a case for compensation. That could lead to drawn-out negotiations or even litigation.

Either way, it is a problem that needs solving before closing the copper network.

Dramatic change in the cost of supporting copper lines

The cost of maintaining the copper network is averaged across urban and rural areas. It’s not a huge figure, nor is it negligable.

On the whole, maintaining copper networks is cheaper in towns than in rural areas. As more and more inexpensive-to-support urban customers drop off the copper net, the maintenance cost of each remaining copper line will rise.

If this doesn’t make sense. Think of what happens when there is one last copper customer in a street or on a cabinet loop.

As some point, supporting the remaining copper customers will be prohibitive.

Opportunities in closing copper network early

On the positive side, this last barrier is also an opportunity. It gives government and the telecommunications industry an incentive to modernise connections for those users left in the gap between UFB and RBI.

Number crunchers can revisit their models and provide details. With the way cellular technology is evolving, wireless broadband services providers will soon be able to offer most users in that gap a superior, cost-effective alternative to copper.

By the time any change comes we’ll be looking at 5G mobile. This promises gigabit wireless connection speeds and thousands of simultaeous connections. It means users will have fast broadband links that are cheaper to install than fibre and cheaper to maintain than copper.

Shared tower access would help

The attraction of providing those customers with 5G broadband will be so tempting, carriers will want to invest in towers serving any sizable community. It would help if regulators could ease the burden by allowing or even regulating for shared access to cellular towers in the same way this already works with the RBI.

Sooner or later all the users in the gap between UFB and RBI will come into the fast broadband, post-copper fold. Ten years would be a pessimistic deadline. Setting a date to drop copper networks in the cities will bring that day forward.

In his post, Felten mentions unbundled copper exchanges where ISPs have DSLAMs. This also applies in New Zealand, but by the time copper is removed from our cities those unbundled ISPs will have recovered the cost of any investment and, in theory, at least, will have moved most of their business to fibre.

One network good, two networks not so good

Putting an end date on the copper network will focus minds on what’s needed to make this work best for everyone. It will also give telecommunications investors something they often ask for: certainty.

Knowing, say, ten years out, Chorus will rip out copper in a suburb or town will help everyone plan. It’s inevitable anyway, so let’s admit that now and move on.

If the government had moved sooner to name a copper shutdown date, it could have avoided much of the fuss over the so-called copper tax.

Asking telcos and consumers to pay a dollar or two over the odds (from their point of view) for access doesn’t sound so bad when everyone knows it is for a limited time only.

Until government names the copper shut-down date, there will always be market tensions. The regulatory framework will look muddled and investors will face higher than necessary risks.

It’s time to get on with the job. Set a date to pull out the copper.

What happened next?

The decade following this 2016 analysis saw the copper network debate evolve from political controversy to a practical reality. Rather than setting a single nationwide shutdown date, New Zealand took a phased approach that addressed urban and rural areas separately.

Urban copper retirement begins (2020-2022)

The breakthrough came in December 2020 when the Commerce Commission published the Copper Withdrawal Code, establishing the regulatory framework for disconnecting customers. The code requires:

• At least six months notice before disconnection
• Three written notices to customers and retail providers
• Free fibre connection for affected households
• Compliance with 111 Emergency Services requirements

By mid-2020, Spark had announced plans to retire PSTN (the public switched telephone network) in pilot areas like Devonport and Miramar. The company cited equipment obsolescence — manufacturers had stopped making PSTN hardware 17 years earlier — and the difficulty of finding people with the skills to maintain it.

In March 2022, Chorus decommissioned its first 28 roadside cabinets. The process took longer than expected due to Covid-19 lockdowns, which made installing replacement fibre connections difficult. By September 2021, copper connections had already dropped 30 percent year-over-year to just 308,000 connections.

Rural deregulation

As urban copper disappeared, attention shifted to rural areas. The arrival of Starlink satellite broadband and expanded fixed wireless services changed the competitive landscape — giving rural users real options and eliminating the monopoly conditions that had justified copper regulation.

In April 2024, the Commerce Commission launched an investigation into whether copper regulation outside fibre areas still made sense.

Telecommunications Commissioner Tristan Gilbertson noted that market dynamics were "changing at an unprecedented speed" with satellite and wireless providers bringing urban-level broadband performance to remote areas.

Market changes made the case for withdrawal

The case for deregulation strengthened rapidly. By July 2025, Chorus reported that copper connections had dropped 33 percent in just two years, with only 100,000 homes still using copper — 75,000 of them in rural areas.

Industry groups including One NZ, Spark and Tuatahi First Fibre all backed deregulation. So didi Rural Women New Zealand.

In March 2025, the Commerce Commission issued draft recommendations favouring rural copper deregulation. The commission noted that most rural consumers now had access to three alternative affordable technologies more reliable than copper. With only 80,000 connections remaining (down 21 percent in a single year), and Starlink and fixed wireless available throughout most of the country, the regulatory justification had evaporated.

The predictions that came true

Looking back at the 2016 analysis, several predictions proved accurate:

The maintenance cost spiral happened: As urban customers left copper, per-line support costs rose exactly as forecast. Equipment obsolescence accelerated the problem — parts became impossible to source and engineers with copper expertise retired.

Wireless filled the gaps: The prediction that 5G and improved cellular would serve the UFB-RBI gap proved correct, though low-earth orbit satellites like Starlink played an even bigger role than anticipated.

Regulatory certainty emerged: While New Zealand didn't set a single nationwide shutdown date, the Copper Withdrawal Code provided the certainty everyone needed. The phased approach worked better than a hard cutoff would have.

Political heat dissipated: Once alternatives became widely available and customer numbers plummeted, copper regulation ceased to be politically contentious. By 2025, there was broad consensus across industry, user organisations and politicians.

Where we are now (2026)

Less than 80,000 New Zealand homes still use copper connections, almost all are in rural areas. Chorus projects full copper retirement by 2030, though the pace of decline suggests it could happen sooner.

The Commerce Commission's final decision on rural deregulation is expected by the end of 2025. Once approved, the same Copper Withdrawal Code that governed urban disconnections will apply to rural areas, giving customers six months notice and ensuring free alternative connections are available.

The copper network that served New Zealand for over a century is in its final years — not through government mandate, but through market forces and technological obsolescence.

The broader story: How we got here

The copper retirement debate didn't start in 2016. For context on the earlier discussions:

2014: The debate begins

• Ovum analyst calls for forced copper shutdown to resolve regulatory tensions (Dec 2014)
• Labour's Clare Curran calls for switch-off discussion comparing it to the analogue TV shutdown (Dec 2014)
• Industry voices weigh in on whether pulling copper makes economic sense (Feb 2014)

These early discussions focused on the regulatory tensions created by running copper and fibre in parallel. The Commerce Commission's pricing decisions on copper access had created what some called a "copper tax" — wholesale prices that made fibre relatively unattractive to end users even where it was available.

The 2016 analysis above emerged from that context: arguing that setting a shutdown date would resolve regulatory tensions, provide investor certainty and force focus on future technologies. The phased approach that eventually emerged achieved similar outcomes without the political risk of a hard deadline.

This article was originally published in March 2016 and updated in February 2026 to reflect subsequent developments.