The government is trumpeting the latest figures for the Ultra Fast Broadband (UFB) rollout as showing the project is ahead of schedule.
Two years into ultra-fast broadband installation, nearly 230,000 premises are able to connect to fibre, according to ICT Minister Amy Adams. And nearly 150,000 homes and businesses have access to faster services through the rural broadband initiative.
But fewer than 10,000 of a potential 300,000 users — less than 3 per cent — have so far taken up UFB services.
That’s a miserable uptake rate, says Australasian telecomms market analyst Paul Budde. “It shows that unless you see fibre as part of your national infrastructure and make it available on a utility cost basis, nothing is going to change.
“Uptake is 99 per cent about price.”
The cheapest residential fibre plans with 30Mbit/s downloads and 10Mbit/s uploads start at about $70 a month.
Budde says experience overseas suggests fibre services at the equivalent of $50 a month are taken up by about half of users; at $30 a month, near-universal coverage is usual.
He concedes, however, that uptake rates can’t be expected to pick up until broadband subscribers’ existing contracts come up for renewal.
Adams says about 20 per cent of the UFB network bas been built. At a similar stage in Singapore, two per cent of potential customers had connected; in the UK, a three per cent uptake rate wasn’t achieved until 24 per cent of the country’s fibre network was complete, she says.
According to the minister’s figures, users outside the main centres are flocking to services available through the joint Vodafone-Chorus rural broadband initiative, uptake of which is 38 per cent.
Chorus is also the biggest of the four local fibre companies that are contracted by the government to carry out UFB installation. They report businesses are adopting fibre services much more quickly than residential subscribers.
Whangarei installer Northpower Fibre said in June that it expected to have its network complete by next March, six months ahead of schedule.
The Ministry of Business, Innovation and Employment says 50 internet service providers are selling UFB services. Conspicuously absent is Vodafone, some of whose existing broadband customers are getting impatient about UFB availability.
But Vodafone spokesperson Michelle Baguley could give no date for when the country’s second-biggest ISP would enter the UFB market, except that it will be this year.
“We're working hard on UFB and we see it as a very important part of our fixed network roadmap.” It has been carrying out trials in Auckland of voice and broadband over fibre since March last year.
“A key insight from our trial is that critical to the success of fibre is ensuring a good customer experience,” Baguley says.
Paul Brislen, head of telecommunications user group TUANZ, says that’s a prudent policy. “Deployment of UFB at the moment is awful and the people who get blamed are the retail ISPs. So until Chorus has finished learning how to roll out a network Vodafone is going stand well back.”
Brislen says the government needs to put money into promoting fibre’s benefits to encourage people to subscribe to UFB services.
“Until the government realises people need to be told what this is all about, uptake is going to be marginal.
“Think about the switch to digital television — the government spent $13 million telling everyone they need to go out and buy a new TV and it has spent nothing on telling people about UFB.”