Download Weekly: Connecting Aotearoa Summit

This week's newsletter has a slightly different format: a report on the Tuanz Connecting Aotearoa Summit.

Getting every New Zealander connected

Speakers at Wednesday’s Connecting Aotearoa Summit were asked to tackle a big question: “Why can’t every New Zealander be connected?”.

Connecting Aotearoa is a reboot of the decade-old Tuanz Rural Connectivity Symposium.

The new name reflects an expanded view. In the past the focus was on improving access for households and businesses in rural New Zealand. Purists might disagree, but for the telecommunications sector, ‘rural’ has come to mean ‘beyond the reach of the fibre network’.

While rural access has greatly improved. It is not the only barrier keeping New Zealanders offline. This year’s summit looked at digital equity and whether people have skills needed to take part in the digital world.

Connecting Aotearoa: Progress on mobile access

Graham Mitchell says there have been substantial increase in mobile coverage in recent years. This is particularly noticeable as you drive around the nation. He says: “People are getting used to it. We’re getting fewer complaints about drivers not being able to connect.”

Mitchell is the CEO of National Infrastructure Funding and Financing (NIFF), the government agency responsible for finding money to build infrastructure. NIFF was previously Crown Infrastructure Partners and before that it was Crown Fibre, the agency that oversaw the UFB network build.

Under Mitchell’s watch, investment has been directed to where it is most urgent. He says the per capita spend on communications infrastructure is highest on the West Coast: “A lot of that was for mobile and fibre backhaul which was needed considering the earlier under investment.”

While bigger players like Chorus, the main telcos and the Rural Connectivity Group have done much of the work filling coverage gaps, Mitchell noted the contribution of New Zealand’s 20 or so wireless internet service providers or Wisps.

He says they have added 1600 towers to take coverage deeper into remote areas and are now investing in fibre.

Connecting Aotearoa: Chorus joins the BYO fibre party

Chorus CEO Mark Aue would like to extend New Zealand’s fibre network. Today it reaches around 87 percent of the population.

Many European nations are shooting to reach 99 percent of their populations before the end of this decade. Aue thinks 95 percent coverage is a reasonable target for New Zealand.

He says it would cost $3 billion to reach 95 percent. Yet, based on the performance of the existing network, that would deliver a net economic benefit of $17 billion to the nation.

This, he says, makes fibre a sound investment for any government. The return on such an investment would be far greater than the return on the road infrastructure the government has committed to.

Community funded build

That’s the macro approach to extending fibre. Chorus is also taking a micro approach with its “Community co-funded fibre build”.

This is for places that are within reasonable reach of the existing network, but are not eligible for fully funded connections.

Chorus says it will put $3500 towards each individual connection if the community can come up with the rest. In some cases that will be as simple as a community coming together with a collective business case. In others it will require them to put some of their money behind the build.

Aue acknowledges that this model won't suit every community but aims to drive efficiencies and achieve scale. It also addresses the frequently heard “fibre runs past my house, but I can’t connect” issue.

Moving on from copper

Chorus is withdrawing copper networks in areas where fibre is available.

Copper technology is barely fit for purpose in 2025. It’s expensive to maintain and, because it is being withdrawn everywhere else in the world, it’s increasingly hard to find the engineers who worked with copper are retiring.

Aue would like Chorus to withdraw all copper including rural services by 2030. There is talk of people who depend on copper for broadband and calls in rural areas; estimates shared during the conference put this at around 25,000 people. Almost all of these have viable alternatives.

Aue says 97 percent of the people using copper today have at least three alternatives to choose from, all those alternatives are superior technology.

Yet closing copper remains a politically difficult question. Aue says Chorus is not shying from the problem, but is not able to solve the issue on its own. He says: “As a group of stakeholders, we all need to work to transition customers off legacy technologies.”

Connecting Aotearoa: Local fibre

A good example of the local fibre investments mentioned by Graham Mitchell in the previous story is Amuri Net, a service provider in rural Canterbury. In a session on emerging technology, the company’s CEO Chris Roberts spoke about the challenges facing smaller providers deploying fibre in rural areas.

Roberts says it’s crucial to get community buy-in before investing in a small scale fibre roll out. Chorus and the other large fibre companies rolled out their initial fibre networks regardless of demand.

The early UFB planners anticipated modest fibre take-up rates, but had deep pockets and they could see a path to profitability. It is a much more risky investment for businesses like Amuri Net.

Before running cable down a stretch of road, Amuri Net’s team will knock on doors to determine if there is enough interest before investing in new fibre.

Connecting Aotearoa: Competing with satellites

Small service providers moved to local fibre builds as a strategy to compete with the threat of Starlink’s low Earth orbit satellite network.

In recent months Starlink has introduced a $79 deprioritised satellite broadband plan and will provide customers with a dish if they sign up for a contract. Dishes are expensive to make and in the past were sold for hundreds of dollars.

This predatory pricing echoes other strategies from well-heeled technology giants. They undercut competitors' pricing, win market share, drive out competition, create a monopoly or something approaching a monopoly and then lift prices to recover their investment.

New Zealand’s small service providers are unable to compete with Starlink on price, but they can compete on quality if they build fibre networks. Fibre technology is superior from a customer point of view and can be a profitable business even in the short term. It also creates a valuable asset for the business owner.

Connecting Aotearoa: Identifying the main issues

Nicole Oliver from Rural Women New Zealand runs a jewellery business from rural Waikato neatly summed up the big issues that remain for rural telecommunications users:

She says:

• Rural communities are worried about plans to retire the copper network.
• Priority should be given to rural healthcare providers, such as midwives and doctors and to the public safety network.
• There’s an information gap. Oliver says we need a well-funded public education campaign to help rural consumers understand new connectivity technologies and assist them in choosing the best option.
• We need to explore options beyond satellites and planners need to understand a one-size-fits-all approach doesn’t work, different communities and individuals each have different needs.

In other news...

Spark: Two private equity firms reportedly circling
This is huge news if confirmed. The NZ Herald’s Chris Keall follows up a story first published in The Australian which suggests Spark could be acquired.

‌Outsourcing deal at Spark expected to see net loss of about 80 jobs
At Stuff, Poppy Clark writes up Spark’s media release where the company says a partnership with Nokia will:

“...accelerate the use of AI and automation and contribute to reduced network operating costs”.

‌Budget 2025: Tech and digital investment pared back, but still substantial
Rob O’Neill reports in Reseller News on the technology aspect of this year’s budget.

Labour slams 'big tax breaks' for tech giants as government ditches digital levy
RNZ gave the story to Russell Palmer who is a political reporter. Strictly speaking the decision to shelve legislation that would have taxed big tech firms is not part of the budget, but the hundreds of millions of dollars from the levy could have paid a few government bills.

Dropping digital tax frees big tech to ship $4b revenues offshore
Jonathan Milne covers the same story for Newsroom. It’s behind the paywall, but the second deck on his story suggesting a climbdown might tempt readers to subscribe:

Healthy caution or running scared? The Government has to fill a hole in its balance sheet after withdrawing a bill for a ‘Google tax’ that has proved successful overseas.

Tax rebate overshadows sector-specific Budget initiatives
Peter Griffin gets into the budget numbers for the ITP tech blog and is enthusiastic about the investment boost tax incentive which allows companies to claim back spending on assets in the first year. This is on top of depreciation.