According to the Ministry of Business, Innovation and Employment’s latest Quarterly Connectivity Report, 10 cities now have fibre uptake rates of greater than 60 percent.

Rolleston tops the list with 74 percent of homes and businesses connected to the fibre network.

The national uptake rate is now 55 percent. That’s up from 52 percent in the June quarter. An additional 58,912 premises were connected to the UFB network in the three months to the end of September.

Rugby World Cup surge

Much of that would have been a surge of customers getting ready to stream the Rugby World Cup on Spark Sport.

Communications Minister Kris Faafoi says the MBIE report shows the UFB network is not just providing benefits in the larger cities.

He says; “With UFB roll-out in 126 cities and towns around New Zealand, the deployment is now 87 per cent completed and still ahead of schedule.

“This investment and the connectivity it is making available shows this government’s continued commitment to closing the digital divide so all New Zealanders who want connectivity, have it”.

Rural too

Rural broadband is also growing fast. The MBIE report says phase two of the Rural Broadband Initiative means 40,000 households and businesses in “hard to reach regions of New Zealand” now have access to improved broadband.

In the September quarter 17 marae were connected to broadband. This brings the total number of connected marae to 31.

Research company Gartner predicts that by the end of 2021, 70 percent of large enterprises will rely solely on the internet for their wide area network connectivity for small and remote branch offices. This is twice the number of enterprises who connected this way in 2017.

A report, How to Use the Internet for Cloud Connectivity Without Performance Disasters, by Australian-based analysts Bjarne Munch and Padraig Byrne says: “We are now seeing enterprises introducing an internet-first strategy for their WANs. This will also incorporate consumer-grade internet services, where possible.”

In other words, where they can companies are dropping expensive WAN products and jumping on to services like New Zealand’s UFB.

In some cases they use the same consumer services as residential users, in other cases, they use slightly more expensive business-class fibre services. The main difference between the two is the lack of contention on business services, although this isn’t a problem for users in New Zealand.

Business-class fibre services also usually come with better support.

As the name of the Gartner report suggests, the focus here is using the internet to connect to cloud services.

There are many nuances for businesses wanting to get the best performance from an internet service provider. For New Zealand companies one potential problem is the lack of alternative routes to cloud services. Another issue to consider is whether the service offers direct peering to the cloud services you require.

One interesting point made by the Gartner analysts is that many companies now want to include wireless broadband in their connectivity mix. Or as Munch and Byrne put it:

“Mobile broadband is increasingly included for truly diverse access designs.”

It’s a great option when companies have employees on the move, but it shouldn’t be a first choice for cloud connectivity. As the report says: “These are generally asymmetric and have unpredictable overbooking.”

“Just seven percent of Australian broadband users subscribed to 100Mbps services, compared to 29 percent of New Zealanders.”

A report in today’s Commsday quotes S&P Kagan’s research on Asia Pacific 100Mbps broadband usage.

However, it isn’t clear if S&P is only counting users on 100Mbps or those on 100Mbps and higher speeds. The company hadn’t responded to a request for more information at the time of writing.

This compares with figures from Chorus which says that 71 percent of mass market customers on the company’s network have connection speeds of 100Mbps or higher. Mass market in this context means consumer and small business accounts.

The S&P Kagan number for New Zealand stacks up with local figures. In round numbers, about half the people with fibre access choose fibre plans. We know the numbers for other fibre areas are roughly in line with Chorus. We also know that fibre reaches at two thirds of the country at the moment. So give or take a point or two, 29 percent seems right.

If you’re wondering why the government was so keen to build a fibre network look no further than Victoria White’s Xero boss brings jobs to Hawke’s Bay in Hawke’s Bay Today.

She writes:

Next year, Hawke’s Bay will join the likes of San Francisco, London, and Singapore, as a base for global software company Xero.

The ever-expanding company will be opening a new office in Napier — potentially at the new Ahuriri Tech Hub — which will create 30 support jobs over the next 18 months to join the company’s global customer experience team and specialist payroll experts.

The story is mainly concerned with the region’s potential for acting as a hub for other technology companies. That’s as it should be for a local newspaper. Good luck with that project, the more tech jobs in regional New Zealand the better. Xero is already helping to pull the national technology economy along.

Three-quarters of the way down the page, White gets to the important point. She quotes Hawke’s Bay-based MP and Small Business Minister Craig Foss, who says:

“Fibre has enabled world-leading innovative companies, such as Xero, to be based in our stunning region – living and working the dream.”

Orcon consumer general manager Taryn Hamilton says his company will be first off the block when gigabit fibre services go live around New Zealand on October 1. The company also plans to give customers. an Xbox.

Hamilton says his company will be aggressive going after the market. It is selling an unlimited, naked gigabit plan for $135.

To sweeten the deal, Orcon will give an Xbox One S to customers signing a 24-month contract. Those signing for 12 months will get one month free.

Xbox is a different lure

Offering an Xbox is an interesting idea. Trustpower has found customers buy offering TVs and fridges.

Hamilton says Orcon was the first ISP to offer Ultra-Fast Broadband and plans to stay ahead of the pack. “We’ve been providing gigabit plans in Dunedin since 2014 and we have the technology and systems to support high-end plans”, he says.

Orcon is only one of four broadband brands owned by Vocus, New Zealand’s third largest telecommunications company after Spark NZ and Vodafone.

The other Vocus broadband brands are Callplus, Slingshot and Flip. Although each sell similar products and in some cases share infrastructure and services, each addresses a different market sector. Orcon targets more technically advanced and more demanding customers.

Big cities first

Orcon says it has already begun taking orders for its gigabit plans in Auckland, Hamilton, Tauranga, Wellington and Christchurch. Dunedin already has gigabit fibre.

Hamilton says existing customers who order an upgrade this week can expect to download at gigabit speeds in about a week. It will take a little longer to put customers transferring from other ISPs online.

The first gigabit areas will soon be joined by New Plymouth, Whangarei, Cambridge and Te Awamutu.

To show the company’s preparation for faster fibre speeds Orcon showed journalists around its central Auckland facility, one of three sites in the city servicing fibre customers.

At the site, Orcon showed cabinets full of caching hardware including equipment for Google-You Tube, Facebook and Akamai. It has similar equipment in a handful of sites around the country. The ISP says it now caches more than half its network traffic locally and this helps gets data to customers faster.

Story amended to include updated price information. 

Gigatown

Chorus says it will offer gigabit fibre services starting next month. It joins Enable Networks, Northpower Fibre and Ultrafast Fibre who all plan to launch gigabit wholesale broadband services in October.

From next month they will all offer download speeds of 1Gbps with uploads running at 500Mbps.

If customers take up the offer[1], the gigabit upgrade could catapult New Zealand up the global broadband speed ranking.

Chorus says it will sell residential wholesale gigabit services for $60 a month. That’s an introductory offer to get everyone hooked. From June 2017 the price will rise to $65. The business service is $75.

ISPs quick to react

Within minutes of Chorus’ announcement, MyRepublic said it would offer gigabit services in all UFB areas. Customers signing for a 24-month plan get the first six months at the wholesale rate and pay $120 a month for the rest of the term.

Spark is already taking orders for gigabit fibre plans. Orcon plans to launch gigabit services as soon as they are available.

One of the smaller ISPs, Tauranga-based Full Flavour has been quick off the block. It now sells gigabit services and says more than 3000 local businesses in Tauranga are able to take up the offer.

Another regional ISP, Taranaki’s Primo Wireless, also offers gigabit plans.

Top gear

In a media statement Chorus says its gigabit service: “Will run at the maximum speed the network electronics allows today. In practice this means customers will see download speeds of between 900Mbps and 970Mbps and upload speeds of up to 500Mbps.”

No-one is going to quibble about the difference between 900Mbps and 1Gbps because no-one will notice.

In some ways the numbers are meaningless. Once you get past 100Mbps[2], broadband speeds are more about marketing than technical practicalities.

A normal New Zealand home will struggle to use 100Mbps.

Streams of high resolution television

Gaming aside, the most demanding domestic application is 4K television and that can stream well enough inside the lowest priced 30Mbps fibre services. You’d need half a dozen 4K televisions to put pressure on a 100Mbps link.

Even hospitals and medical practices running high-end imaging equipment will struggle to make use of the high speeds. Gigabit internet might be useful if you plan to build a large hadron collider in your garage.

Yet things change. High-resolution virtual reality entertainment looms on the horizon. If it takes off, it could see households bump up against today’s speed limits. Who knows what else might be on the way?

Back in the here and now, 1Gbps means users are buying a lot of headroom. That can be helpful. A car with a top speed of more than 200kph might be overkill for driving around town. Yet when the chips are down on a rural overtaking lane, extra grunt at the top can get you out of trouble.


  1. Chorus says there are 5000 Gigatown subscribers in Dunedin. That shows there is clear demand for faster internet services.  ↩
  2. That’s now most fibre users. You have to wonder why anyone buys 30Mbps fibre plans. Communications minister Amy Adams says between March and June 2016, 87 percent of new residential connections were for 100Mbps services or higher. Nine percent of new connections are 200Mbps or above.  ↩