Connections between telecommunications and the energy sector are not new. They could soon become more important. Continue reading
It’s time to consider whether New Zealand’s fibre network should be extended beyond the reach of UFB and UFB2. There is a sound business case for doing so. Yet considerations need to go beyond the balance sheet. Continue reading
According to the latest Akamai State of the Internet report New Zealand ranks number seven in the world for average peak mobile broadband speed.
In the fourth quarter of 2015, Akamai clocked NZ mobile broadband at a respectable 75.4 Mbps. That’s a long way behind Australia, which takes the top slot with its blistering153.3 Mbps average peak speed.
New Zealand’s average mobile broadband speed is 7.4 Mbps. That’s better than average but behind Australia which gets an average 8 Mbps.
While New Zealand is among the front-runners for mobile broadband speeds, it is falling behind the pace in fixed line broadband.
This is despite the billions of dollars being invested in new networks and the improved uptake of fibre services. The only consolation is that we are pulling further ahead of Australia which is now something of a fixed-line broadband laggard.
Akamai says New Zealand moved up one slot over the last quarter in the global table for average connection speeds. We now rank at 41 in the world with an average connection speed of 9.3 Mbps.
Our year-on-year average connection speed increase of 27 percent means we are doing a little better than keeping pace with the rest of the world. The global average connection speed climbed 23 percent in the last year to 5.6 Mbps.
Australia now ranks 48 with an average connection speed of 8.2 Mbps. The gulf between mobile and fixed line performance in Australia is bigger than anywhere else.
Average peak connection speeds in New Zealand are up 25 percent on a year ago to 42.8 Mbps, but that only gets us to 53rd place in the global table. In the previous quarter we were at 45.
The global average peak connection speed climbed 21 percent to 32.5 Mbps. Singapore tops the list with 135.7 Mbps.
At the NBR former telecommunications commissioner Ross Patterson defends the case for the New Zealand government’s investment in a fibre-to-the-premises network.
Patterson is responding to an earlier article by Bronwyn Howell. He says:
…demand for fibre services is greater than anticipated at this stage of the rollout, and the proportion of fibre customers on 100 Mbps or higher plans is also ahead of expectations. Uptake has now passed 20%, and ultimate uptake in New Zealand will be well in excess of the 30% target of the private investor in the Netherlands.
Howell is critical of government involvement in telecommunications. She is an academic and comes at the subject from a hard economic perspective.
Even if you disagree with her premise, much of what she has to say is often worth listening to. Her arguments probe current thinking and provide fresh insight. Howell’s input stops the debate from being an echo chamber.
But not in this case. By the time her comment about people not wanting fast broadband were aired, it was out of date. There were a few other mistimed comments. My guess is her opinion piece was published weeks after it was written.
Patterson uses the UK as an example of what the New Zealand fibre market would look like if the government had not stepped in. At he points out, the UK is now Europe’s fibre laggard.
He does a great job of explaining market dynamics:
In the early part of the build, uptake is low, because retail service providers do not actively promote fibre services. If only 10% of the customer base has access to fibre, there is no business case to invest in services which 90% of the customer base cannot receive.
A tipping point typically occurs at about the 35% penetration mark, when service providers perceive that the available market is of sufficient size to justify launching new services. In New Zealand this tipping point was reached in March 2015, when the fibre network passed 600,000 homes, at which point Netflix entered the New Zealand market.
Patterson overlooks VDSL, but otherwise he offers a neat summary of the current state of fibre in New Zealand.
New Zealand is behind the international pack when it comes to broadband speeds. The table shows the challenge ahead of the network builders: Chorus. Ultrafast Fibre, Northpower and Enable Networks.
We have a long way to go before we match the world leaders.
At the time of the last Akamai report, third quarter 2014, New Zealand ranked 44 for average broadband speeds.
The good news is that New Zealand catching up fast.
The New Zealand Government, through Crown Fibre Holdings, is backing a fast fibre network that will eventually reach about 80 percent of the population.
We’re already on track to connect 75 percent of the population to the fibre network by 2019.
It’s going to be hard for a small country with a geographically distributed population to do as well as city-states like Hong Kong and Singapore. But as more people sign up for fibre, the average connection speed will increase.
Some perspective on how the 4G networks being rolled-out by Vodafone, Telecom NZ and 2degrees will affect the broader New Zealand economy comes in this morning’s subscriber-only CommsDay.
The Australian-based newsletter leads with: “Mobile broadband boosts the economy by A$34bn last year“.
It quotes a report from the Australian Communications and Media Authority saying this amounts to more than two percent of that nation’s total GDP in 2013:
The report also noted that the direct impacts from mobile broadband had “flowed through all aspects of the Australian economy,” including by helping to draw in additional investment capital; the authors estimated that mobile broadband had increased the growth rate of the overall economy by 0.28 percent each year from 2007-2013, making up a substantial portion of the overall 2.9 percent annual growth rate.
Much of that economic boost came from productivity gains.
New Zealand catch-up
New Zealand has been slower than Australia to build the 4G networks behind mobile broadband.
Telstra started operating its service in September 2011. Vodafone New Zealand launched 4G in March 2013 while Telecom NZ began operating late last year.
2degrees says it will launch its 4G service later this year.
If anything New Zealand could see an even bigger economic boost from faster mobile data services. That’s because the most productive sectors of the economy are rural.
Mobile broadband is the only broadband option in many of these productive areas.
With projects like the Rural Broadband Initiative increasing the mobile data network’s scope, there’s the potential to boost New Zealand’s GDP by more than Australia’s two percent.
Akamai’s latest State of the Internet report notes New Zealand’s average broadband connection speed was 5.1 Mbps in the third quarter of 2013.
While that’s an improvement of 31 percent on a year earlier it still means New Zealand ranks at 46 in the global league table a long way behind South Korea where broadband speeds average 22.1 Mbps. Australia comes in at 43 with average speeds of 5.5 Mbps.
The global average broadband speed is 3.6 Mbps.
Akamai’s survey takes data gathered from users connected to Akamai’s global server network and compares countries against each other to produce league tables.
Peak connection speeds in New Zealand are now 20.5 Mbps. This puts us at number 57 in the global table. Australia is in the 30th spot with 30.1 Mbps.
New Zealand is 43rd globally for broadband penetration.