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Top marks for broadband, still room for improvement

Sarah Putt, Contributor. 18 September 2018, 9:15 pm

Here's a good news story. The Ultra Fast Broadband build is 74.8% complete. It is 7% ahead of schedule. To date, uptake is 44.1%. Currently 70% of New Zealanders can access fibre.

These stats are taken straight out of the Government's Broadband Deployment Update, released this week - and it must be acknowledged that this is a huge achievement. Especially when you consider that in 2006 this country was in the ignominious position of being one of the two (along with Mexico) in the OECD not to unbundle the local loop (that is, allow companies other than Telecom to put their equipment into telephone exchanges) and our broadband speeds and uptake reflected this woeful position.

At the time it was a position that felt intractable. We would never catch up to the world, the country would be dragged under by the tyranny of distance, unable to rise above the stranglehold of Telecom's monopoly position, which was defended by many as some kind of free-market sacred cow. Regulation was a dirty, dirty word.

But the Communications Minister, at the time, David Cunliffe forced LLU to take place, and even went as far as to enact the Operational Separation of Telecom.  Shortly after this announcement, at a TUANZ event in May 2006, Australian analyst and commentator Paul Budde suggested that the government throw $1billion at a national network. "Think big," he said (perhaps not understanding the full implications of that 'Muldoonism'). "Throw the little funds into a big heap and say we can use this more cleverly."

And we did. Or at least the next Communications Minister Steven Joyce did, when he was put in charge of spending the $1.5 billion the National Government pledged for a nationwide fibre network. And Joyce (perhaps borrowing a trick from Cunliffe's playbook) pushed even further and forced the Structural Separation of Telecom, so that now the company has disappeared and been replaced by two companies - Chorus and Spark.

Also, we have three international cables, where before there was only one. The Southern Cross Cable is now competing with Hawaiki on the route from New Zealand to the US (via Australia and the Pacific), and there is also trans-Tasman cable owned by Spark, Vodafone and Telstra.

But is it enough? Well, fibre to 87% of New Zealand's population by 2022 (the end-goal of the UFB roll-out) is a good thing, and competition in the area of international connectivity should bring down pricing. But, we do have some way to go, when compared with other countries in the OECD, as noted in a previous Techblog post. Although fibre broadband is increasingly available, the number of broadband subscriptions in New Zealand that enable connections speeds in excess of 100Mbps is only 8%, well below the top performer Korea, which boasts 76% of all subscriptions enabling speeds in excess of 100Mbps. Also, Akamai's average speeds recorded by the OECD put New Zealand at 10.5Mbps is well below the OECD average (for the record Korea is at the top with 29Mbps).

The hard part - digging the trenches, laying the fibre - is being done, and will be complete by the end of 2022.  But that doesn't mean we can take the pedal off the metal. The conditions are there for New Zealand to be in the top five for the best performing countries for broadband connectivity.

Successive Governments have created the conditions, the taxpayer has underwritten the bill, it's now time for the industry to seize the momentum and take the country up to the top of the OCED pile.


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