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We'll build it, but will they come?

I hate to rain on anybody's parade, but the New Zealand Government has uncovered an uncomfortable truth that blows an almighty hole in its flagship broadband policy.
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Written by Darren Greenwood on

I hate to rain on anybody's parade, but the New Zealand Government has uncovered an uncomfortable truth that blows an almighty hole in its flagship broadband policy.

The Commerce Commission regulators have found that fewer than one fifth of New Zealand consumers are willing to pay more than NZ$10 per month extra for ultra-fast broadband.

As for businesses, three quarters of small businesses are happy with their existing broadband service, and the commission said that there is "no strong demand" from them for applications like high-definition video conferencing.

Of course, such a lack of demand will not mean the end of the ultra-fast broadband (UFB) project in New Zealand. Too many politicians, telcos, the tech sector and big businesses have invested so much, not to mention their own credibility, to allow the project to falter.

All the same, the Commerce Commission survey does present a blow to the UFB's many cheerleaders, who have claimed that the project is vital to New Zealand's national economic interest. And poor demand is bound to slow the roll-out somewhat, since the rate of progress of the roll-outs depends on consumer take-up, unless the UFB suppliers are willing to take a hit on their revenue forecasts.

Personally, I would pay that extra bit for faster broadband, but I am a bit of an internet addict, with a sufficient if not massive income. Fast broadband helps me with my work, too.

However, I know of many who are on struggle street, and they could not find the extra funds even if they wanted to. They have enough trouble even putting food on the table, never mind paying for broadband.

Indeed, the New Zealand Herald has this week been running a series of articles about how tough many Kiwis are having it, even if some might think that their financial problems stem from their own bad choices.

And, likewise, businesses are also having it hard, so they won't be able to cough up extra either, even if faster broadband will benefit them.

Today's survey confirms the need for providers to better sell the merits of faster broadband. They need to justify their expenditure of the taxpayer dollars, just as Australia has to with its own National Broadband Network (NBN).

The argument has often been like the one given in the movie Field of Dreams: "Build it and they will come."

Trouble is, after today's revelations, we must again ask ourselves: "Will they?"

And with Australia's NBN project being far greater and far more costly than the UFB project at this side of the Tasman, such a question seems even more pertinent for Australians.

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