Download Weekly: Chorus rural fibre a national priority

Infrastructure Commission prioritises Chorus fibre extension

Chorus’ plan to extend the fibre network further into rural areas has made it on to the Infrastructure Priorities Programme. This is a list of projects that the Te Waihanga, the Infrastructure Commission, believes will further New Zealand’s strategic objectives.

It means official recognition that getting first class communications to rural New Zealand is a critical national issue. This marks a change in government thinking.

When Cyclone Gabrielle hit in early 2023, it was clear that officials still considered communications less of a priority than power, water or roads.

Essential infrastructure

Yet it quickly became clear that the nation’s digital infrastructure is every bit as essential as other infrastructure. It underpins the economy.

Services like education and healthcare struggle without it. Even shops find it difficult to operate when the data lines connecting terminals to banks are down. We’ve largely moved on from a cash-based economy.

This week the Infrastructure Commission announced its draft National Infrastructure Plan in Wellington. It includes Chorus’ proposal along with other projects.

95 percent target

Chorus would like to extend the UFB fibre network which currently reaches about 87 percent of the country to around 95 percent coverage. This is broadly in line with what is happening in Europe and other advanced economies.

Some countries aim to go further, Spain is shooting for 99 percent. Yet for New Zealand conditions, 95 percent is a sensible cut off point. Beyond that, connecting each extra premise becomes prohibitively expensive.

Estimates vary, but extending the network could cost between $2 and $3 billion. Chorus is willing to finance some of this, but new sources of funding are needed. This can include public-private partnerships and creative thinking is called for.

$17 billion in benefits

To put the cost in perspective, two years ago an NZIER report found extending fibre could deliver around $17 billion in benefits. From a government point of view, this makes fibre a far better investment than roads. Deloitte's Unleashing the power of digital fibre infrastructure in New Zealand makes another strong case for more fibre investment.

Government planners use Benefit-Cost Ratio (BCR) to compare the economic viability of infrastructure investments. Fibre has a BCR of around 5 or 6. That is, for every dollar invested, you get six back. Some proposed road projects have a BCR below 1 and none come close to fibre.

Infrastructure projects have a nasty habit of running over time or over budget. Recent high profile road projects have done both. In comparison, the UFB fibre network build has been one of the most successful infrastructure projects of modern times. It came in on time and on budget.

High uptake

When the UFB plans were first drawn up almost 20 years ago, the government thought somewhere between one in five and one in four homes might connect to the network. Today about four out of five homes able to connect are using it. There’s some evidence that uptake is higher in rural areas than in the main centres.

Chorus CEO Mark Aue says if there’s solid government backing, there’s nothing to stop his company from starting the build almost immediately.

There are numerous existing small scale fibre networks in a handful of rural areas. Independent service providers like Primo and Amuri among others have invested in their own networks. Yet large areas of the country and many people remain off the fibre map.

One byproduct of the Infrastructure Commission process is that it uncovered that New Zealand doesn’t have a rural communications strategy. Aue says: “Our proposal was marked down for not aligning with a strategy that doesn’t exist.” He wants the government to fix that, develop a strategy and make sure it is integrated into national planning.

Facilities standards to get long overdue revision

New Zealand’s National Environmental Standards for  Telecommunication Facilities (NESTF) are critical to the nation’s networks.

NESTF are a set of rules that allow engineers to install telecommunications cabinets, antennae and masts without needing individual resource consent.

The rules were first introduced in 2008 under the Resource Management Act. In 2016, updated regulations were drafted and they came into force in 2017.

Missed updates

Telecommunications Forum CEO Paul Brislen explains that the plan was to update NESTF every three years. But that didn’t happen.

The 2020 update was derailed by the Covid pandemic. The next revision was cancelled because the then-Labour government was in the process of replacing the Resource Management Act.

Brislen says the NESTF overhaul is long overdue.

Higher towers, bigger cabinets

The original rules allowed mobile towers up to a certain height, but those limits are no longer sufficient.

Brislen says the past decade has seen higher buildings go up in New Zealand’s cities and towns. These interfere with mobile signals which means more towers are needed to cover the same area. That’s something that comes at a high cost and is not popular with the public.

Brislen says: “The standard needs to allow for taller towers.”

Gabrielle showed need for new rules

At the same time, existing rules limit the size of roadside cabinets. Cabinet size wasn’t seen as an issue in 2016. That was before the experience of Cyclone Gabrielle and other natural disasters.

“You can't have more batteries or more cooling systems in place in a cabinet because the footprint is too small”, says Brislen. Which means the rules need to allow larger cabinets.

NESTF rules are automatically applied to all councils throughout New Zealand. This standardisation greatly simplifies matters for network engineers who know an installation in one location can be used across the nation.

Stats and Spark working on price index system

Spark is working with Stats NZ on a project to build a better system for producing New Zealand’s price indices. Government has asked Stats NZ to produce a monthly Consumer Price Index from the start of 2027. Unlike many other economies, New Zealand currently produces a quarterly CPI.

Mark Beder, Spark’s customer director for enterprise and government, says the new system is being developed with the flexibility that will allow it to handle other data and produce other statistical outputs in future.

Ericsson: World moving to speed-based 5G FWA plans

In its June 2025 Mobility Report Ericsson says more than half the carriers it surveyed around the world now offer speed-based plans for 5G fixed wireless access (FWA) services.

In New Zealand, fibre plans are typically based on speed tiers and some Mobile Virtual Network Operators divide up their offerings by speed, but, so far, fixed wireless broadband plans have not been sold that way.

Elsewhere in the report Ericsson says by the end of this year there will be 2.9 billion 5G subscriptions. That’s about a third of all mobile subscriptions.

In other news...

Spark bags $47m after accepting low ball offer for Hutchison shares
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Tait Communications wants Vital to fast-track growth
You’ll need a BusinessDesk subscription to read this Gregor Thompson story looking at the strategic thinking behind Tait’s takeover plan.

What's going on in NZ telecoms?
Hear me on RNZ Nine to Noon, where I talk about the possible fibre network extension and the current state of the NZ telecoms market.