NZ exceeds fibre roll-out expectations, lacks customers

New Zealand's Ultra-Fast Broadband (UFB) roll-out targets are exceeding the government's expectations, but with the collapse of Pacific Fibre and low take-up rates, will the project be all for naught?

New Zealand Communications Minister Amy Adams yesterday announced that the government has exceeded its target for the roll-out of the NZ$1.5 billion fibre project, reaching 76,000 homes, businesses and schools, instead of the projected 70,000. So far, 1700km of fibre cable has been rolled out, and the government is projecting that by July next year, 235,000 premises will be covered.

While that project aims to cover 75 per cent of New Zealanders, the government is also running the Rural Broadband Initiative (RBI), which will provide wireless and copper broadband connections to around 252,000 residents in rural areas. Adams said that 69,000 premises have so far been covered by this portion of the roll-out. This is expected to reach 100,000 by July next year.

But despite the government's speed to roll out, Kiwis aren't all that keen to take up services yet. There are just 1200 active services on the UFB today. So few were signing up that Orcon has reportedly signed up customers for free services for six months.

Adams defended the low take-up rate, stating the government expects a gradual adoption.

"It has always been our belief, based on overseas experience, that uptake will build gradually over the period of the network build," she said in a statement. "We are starting to see some exciting product offerings from retail service providers, but it takes time for products to be developed for the market, and for people to recognise the value of UFB."

Those who decide to take up the high speeds might find that the service isn't matching their expectations for all content, due to a lack of international capacity following the collapse of the Pacific Fibre subsea cable project that would have linked up Australia, New Zealand and the United States.

New Zealand Shadow Communications Minister Clare Curran accused the New Zealand Government of failing to estimate the economic cost of the collapse of the project.

"This shows the government hasn't a clue how important price competition for international connectivity is for the success of its ultra-fast broadband scheme," she said.

"There's no doubt the ultra-fast broadband scheme is in trouble."

Curran said that the New Zealand Government should have intervened to save the project.

"Why couldn't the government have intervened to sort this out, and why didn't they use their purchasing power to ensure this critical piece of infrastructure would proceed?

"Instead of being a step up, we are now seeing the broadband scheme taking a big step backwards," Curran said.

But Adams insisted that New Zealand has enough international capacity for UFB customers.

"Despite recent comments from some quarters, New Zealand has sufficient transit capacity to handle increased network demand from UFB," Adams said.