Spark says it aims to double customers on its fixed wireless broadband service.
This was always going to be a tough goal.
Now it will be tougher. That’s thanks to misinformation, conspiracy theories and, there’s no kind way of saying this… ignorance.
These two newspaper headlines appeared next to each other on a newsfeed last weekend. They tell the story.
A hard sell
Selling fixed wireless broadband is hard work full stop. It competes with fibre, a better option. It doesn’t help that Spark and Vodafone charge fibre-like prices for FWB connections.
In March the Commerce Commission published the Annual Telecommunications Monitoring Report for 2019. It notes:
“Fixed wireless connections increased to 11 percent of total broadband connections at 188,000. However, growth in fixed wireless connections slowed to 14 percent this year, compared to 36 percent growth last year.”
There are reasons sales slowed in 2019. Spark dialled back on selling FWB in the run up to the Rugby World Cup knowing that customers would not have the best streaming video experience.
At the same time the service reached saturation in places where FWB is popular. These tend to be areas where fibre is not available.
Fixed wireless customers share bandwidth. This means if too many attempt to connect at the same time performance drops.
FWB service providers manage this by limiting the number of customers served by any given cell site. In the past they also limited the amount of data a customer could use in a month. Although this is now changing in parts of the country.
Market saturation meant there were parts of the country where Spark could not sign up new FWB customers.
Despite these restrictions Spark has been successful by international standard when it comes to selling fixed wireless.
The Monitoring Report says:
“As at 31 December 2018, New Zealand ranked third highest out of the OECD countries for fixed wireless broadband connections with 3.5 subscriptions per 100 of population, behind Czech Republic at 10.3 and Slovak Republic at 5.7.”
In other words, Spark’s goal of doubling FWB connections was looking heroic before the daft 5G conspiracy theories were imported into New Zealand. Now they look a lot harder.
At the time of writing almost all fixed wireless broadband in New Zealand uses 4G or 4.5G technology. Spark has small 5G FWB sites in the South Island these are a tiny fraction of total user numbers.
No doubt, Spark plans to offer 5G fixed wireless as soon as possible. But right now it is not the focus.
Conspiracy theorists never let facts like this get in the way of their thinking. Remind yourself that the towers attacked by arsonists were not 5G towers.
What makes the problem harder for Spark is the likelihood there is a strong overlap between those who fear 5G and those who would be the company’s normal target market.
Away from places where customers have no choice but FWB, it is easier for Spark to sell the technology to less sophisticated consumers than to tech-savvy ones.
If you understand technology, you’ll know fibre is a better product. If you don’t understand it, you’re more likely to believe crazy nonsense promoted on Facebook.
There’s no easy way out of this for Spark.
Indeed, the problem is likely to get worse. The crazy ideas about 5G appear to spread faster than positive messages.
For now Spark shareholders are happy to keep investing in 5G and fixed wireless broadband. Yet for the technology to succeed, the company must convince consumers to buy. If half the target market is running scared, that’s going to get harder.