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New Zealand’s UFB fibre network now passes 177,886 premises. Of these only 5133 or 2.9% have connected to the services. As with the earlier roll-out reports, what some observers see as a relatively low take-up of fibre services triggered hand-wringing in the media and elsewhere online.

Some perspective: 2.9% isn’t a bad number at this stage.

Telecom NZ, the largest ISP, has just started selling fibre connections. Vodafone, the second largest, has yet to begin.  Some houses, passed but not connected, are still sitting on waiting lists – a lag is inevitable.

Fibre marketing is still in its infancy. And, anyway, people don’t have to jump and buy right away. I’d be more worried if New Zealanders unthinkingly immediately plonked down cash for every new gee-gaw that comes on the market.

Another point to consider; what would be the ideal take-up rate?

Fixed line telephones never reached every single NZ premise even when dial-up was the only option. Today’s consumers have other choices. There’s ADSL and mobile broadband.

Then there are the measly data caps. Consumers on low-end UFB plans could chew through a month’s data in an hour or so.

Finally, there is still no compelling reason for an ordinary New Zealand household to buy fibre. The government effectively killed consumer demand for fibre by enacting Section 92A of the Copyright (New Technologies) Amendment Act and allowing Sky TV to have an effective monopoly on entertainment content.

Until these matters are fixed, it’s a wonder anyone – other than gamers – buys UFB.

11 thoughts on “NZ fibre uptake: not bad

  1. I’ve mentioned it before, but it’s worth mentioning again.

    Much of Wellington and CHristchurch have had high speed cable for up to 15 years. That’s enough time for almost all of the people who are interested in fast internet to move to places served by cable.

    UFB appears to be DELIBERATELY not being deployed in places that have TelstraClear (now Vodafone) cable. And hence the people who have shown they are interested in fast internet.

    • A good point. So in those two cities – which I guess would account for about a quarter of the UFB build – the people in the UFB areas have already defined themselves as being less like to buy fibre. That would skew the numbers down.

  2. I wouldn’t pay much attention to the latest figures, it’ll be the Apr-May-Jun quarter that will give some good telltale

    1) January is a quiet time when service providers and customers alike are on holiday

    2) Telecom made no impact on Q1

    3) The marketing engines are starting to rumble now (at least in our city, Tauranga with four local ISPs along with the national players going after business.

  3. hi bill, nice article. i agree with @ufb that sales and marketing will improve things sharply (and i note that the ozzies report takeup rates amongst customers who were passed more than 12 months ago, which seems a more sensible way to proceed).

    i am not sure about your comment that section 92A killed demand for fibre (i guess by reducing pirating as a competitor to sky?). to me, tv over internet runs just fine over decent copper (see the uk or france, for example), so it won’t be a driver for fibre really – or at least not until multiple hd streams are commonplace.

    i think it is rubbish that we don’t yet have decent options beyond itunes for online video, but i don’t draw a link between this and fibre takeup. or for that matter to s92A.

    hayden

    • Understood. I don’t think downloading movies is the only reason people would buy UFB, it is one reason. For some customers it would be the main reason.

      My point about Section 92A is not so much that banning illegal downloads kills the market for fibre, it sent the wrong signal to the market at the wrong moment. That Sky TV monopoly will be more of a problem in the future.

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