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NZ can't afford a NZ$3.5bn broadband 'white elephant'

New Zealand needs to sell its ultra-fast broadband, or its brand new infrastructure might go unused.
Written by Darren Greenwood, Contributor

When you're forking out NZ$1.5 billion on ultra-fast broadband (UFB) you should want to ensure that enough people will buy it.

Earlier this week, Orcon admitted that so few were signing up to UFB and that the company is reduced to giving it away.

In recent months, the state-owned ISP has rolled out UFB to 45,000 homes, but fewer than 200 have signed up for it.

The company blames a lackof "education" about the benefits of UFB. Just 43 per cent know much at all about it, and 16 per cent believe they can already have ultra-fast broadband, when only 5 per cent actually can.

It is remarkable that people know so little about what was aflagship government election policy.

But then, New Zealand has been spared the awareness raising rows that have dominated the development of Australia's NBN. Here, UFB arrived pretty much under a national consensus, which did not foster debate and wider public attention.

However, when so much is being spent on UFB, you would think that all sides would do a lot more to promote it. The New Zealand Government has invested NZ$1.5 billion, private businesses will spend NZ$2 billion.

NZ$3.5 billion seems too much for a "white elephant".

Of course, it is early days, but as Orcon suggested, a government campaign to generically promote UFB, like what exists in Australia for the NBN, looks essential to make our UFB succeed.

When the government plans to spend NZ$120 million to sell shares in state-owned energy companies, you might think that it would see the wisdom in using some taxpayer-funded campaigns to promote UFB as well. Instead, our ICT Minister Amy Adams said that she will leave the marketing of UFB to the ISPs and other retailers, themselves.

We must remember that UFB is a massive project, not only of economic significance, but political significance too. Since our PM played a personal role in pushing the UFB in New Zealand, you might think the government might want to avoid any risk of failure.

Perhaps this is why there are campaigns pushing NBN in Australia — Julia Gillard has enough failures on her plate already.

In the meantime, instead of generic government campaigns, Orcon and similar UFB suppliers will have to manage their promotions on far smaller budgets.

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