"Ordinary" internet users are still unsure of the benefits of fibre-based broadband and providers will have to convince customers to get on board, says Telecom chief executive Simon Moutter.
Moutter yesterday confirmed that Telecom planned to offer services on the Government's ultra-fast broadband (UFB) network early next year but said the new product will require a "bit of selling".
While bigger internet providers such as Telecom and Vodafone have not yet entered the market, there is concern from commentators that consumer uptake of UFB services is lagging in the regions where it is already available.
The $1.5 billion UFB scheme aims to offer internet speeds of around 100 megabits a second - up to 20 times more than the speeds average residential users experienced in 2010 - to 75 per cent of New Zealand by 2019.
Although consumers were aware that fibre offered faster speeds, Moutter said a lot of people did not have an idea of how it will benefit them.
"I think, broadly, people are not sure what fibre will do for them," he said.
"Ordinary New Zealand residential consumers of the internet will be unclear exactly the benefit to them as a user of getting that fibre connected.
"Even if it is faster, what exactly will be faster, or beneficial about that?" he said.
Moutter said the telecommunications industry faced the challenge of working out whether to offer services packages - such as online movies and television content - directly to customers.
The Telecom boss, who started in his role in August, said the company would address this issue in a strategic plan due out to the market in the first half of next year.
In a media briefing yesterday, Moutter said that while Telecom would be shedding some staff in this financial year, a "massive shrinkage programme" was not planned.
Longer term, he said the size of Telecom would depend on its success.
"The company will size itself around success, if we expand and are growing it will get bigger," Moutter said.