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NZ's fibre adoption not always a sure thing

Sarah Putt, Contributor. 22 October 2019, 7:00 am

As a nation we are second only to Japan in adoption of fibre broadband services, according to research firm IDC. It's ConsumerScape 360 Survey reports that 44% of New Zealanders now access the internet through fibre, up from 33% last year and double the average worldwide rate of 20%.

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With the appetite for Netflix, not to mention Spark's move into sports content by nabbing the rights to the Rugby World Cup currently underway, it's not surprising that both fibre and digital services are hugely popular. IDC associate market analyst Richard Xu notes that the high rates of adoption "reinforces that New Zealand consumers are increasingly valuing rich content in their digital lifestyles."

It did not always seem like a sure thing. When Ultra Fast Broadband was first mooted, many worried that adoption would be low. That New Zealanders would cling to copper, unwilling to see their rose bushes dug up to make way for a fibre cable to laid across their front lawn. In 2010, the then Telecommunications Commissioner Ross Patterson warned at a telco conferences (of which there seemed to be quite a few at the time) about a new bottleneck. Here's the relevant quote published in Computerworld at the time.

"The bottleneck shifts from the last mile to the last ten inches," he [Patterson] says. "A greater focus is required on the demand side and these issues need to be addressed at the same time that the networks have been built."

He pointed to Singapore as an example of a country that is rolling out a government-backed fibre network but has found user uptake surprisingly low - around 30% even when the fibre connection was offered free. "[The result] of its open access model was to move the bottleneck of content exclusivity to the set top box, to electronic programming."

In other words, one of the drivers for broadband TV will be IPTV. But will the average New Zealand household want to pay for a fibre connection which enables them to stream video onto a big screen plasma TV in their living room, if they can't watch an All Black match live?

At the end of his presentation ComputerWorld asked Patterson if the Commission would look to regulating SKY TV, which owns most of the premium sports programmes in New Zealand. But he replied that the decision to regulate was one for policy makers, not the Commission. "All we're really doing is raising that internationally it is recognised and has been addressed in other jurisdictions in that way."

I quite like that last sentence. In retrospect it looks a subtle way of saying 'maybe'. It's fair to say that the Commerce Commission has been influential in the rollout of UFB, not least of which was preventing the merger of Vodafone and SkyTV. 


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