New Zealand shows Australia how to do FTTP

Australia’s politicians continue wrangling over that country’s FTTP (fibre-to-the-premises) project. Meanwhile New Zealand’s is progressing. Yet New Zealand’s low fibre uptake could influence Australia’s FTTP debate.

Figures released yesterday by communications minister Amy Adams show 134,000 homes and businesses can now connect to the UFB network. Building is taking place in 24 of the 33 towns and cities that will be on the government’s network.

Meanwhile 89,000 rural homes and businesses can connect to the Rural Broadband Initiative through fixed wireless connections. A further 36,000 rural users can now use fixed-line services.

Low take up rate so far

To date only 3800 customers have signed for UFB fibre services. That’s a low take-up rate – less than three percent.

The priority at this stage is to sign businesses, schools and medical facilities. Yet the fibre companies started their residential build in areas where they expected the highest uptake.

Given that a fibre subscription is no more expensive than existing copper broadband, this suggests there could be problems persuading consumers to switch.

There are two reasons why more haven’t moved. First, the big ISPs, who account for the overwhelming majority of the market, have yet to begin selling fibre services. That’s likely to happen in the coming months – having more people on the UFB will give them more incentive to move into the fibre market.

Second, the government and the people boosting fibre have done a poor job selling its advantages to consumers. Instead of telling people fibre is fast and reliable, they focus on ridiculous and, to most people, irrelevant, high-end applications. Telecom and Vodafone are likely to do a far better sales job than the government.