Ultrafast broadband uptake still under 3pc

Josh Brown, of Coastal Cabling Services, works to feed ducting for the ultra-fast broadband network into a freshly drilled tunnel in Tauranga. Photo / Alan Gibson

About 1300 users were hooked up to the Government's ultra-fast broadband scheme in the first three months of the year but rate of uptake for the fibre-based internet services is still less than 3 per cent.

These figures aren't influenced by Telecom's entry to the fibre market, given New Zealand's largest telecommunications company didn't start offering UFB plans until the end of March.

The Government's UFB and rural broadband initiative (RBI) latest quarterly report shows that in the three months to March 31, 1327 users connected to the ultra-fast network out of the 171,886 users able to hook up.

This brings the total number of users connected to 5133 - an uptake rate of about 2.99 per cent.

The number who connected to the network during first quarter of this year (1327) is slightly down on those who hooked up in the three months to December 31 (1,361).

Communications and Information Technology Minister Amy Adams said the rate of uptake is in line with government expectations and with overseas experiences.

Earlier this year, the Herald queried the Minister on what informed this view and was provided with a Government report written in April last year.

According to this report, the Government does not expect significant early demand in uptake by residential customers.

"It should also be recognised that in New Zealand the focus of deployment in the early years is on priority users [schools and hospitals] rather than residential, so in many areas fibre will not be deployed on scale for some time contributing to slow residential uptake," the report said.

"Internationally, where fibre networks are being rolled out, it is clear that they are being built ahead of widespread demand for fibre services," it said.

The report said that uptake of fibre services in the United States and Europe had not been high and that the greatest uptake had occurred in Asia. Higher fibre penetration in places such Japan, South Korea or Hong Kong could, in part, be explained by their network rollouts beginning in the early-to-mid 2000s.

"In those countries, there has been a delay of approximately four to five years between fibre services being available, and households subscribing to those services," it said.

In late 2019 at the end of the New Zealand rollout, on which the taxpayer is spending $1.35 billion, the Government expects 30 to 37 per cent of residential users will have migrated to fibre.

The report said the driver for demand for fibre in Europe, the US and Asia had been internet-television and other content, a market that has yet to properly develop in New Zealand.

According to the update released today, 145 cell towers providing wireless broadband had been upgraded so far in the RBI scheme.

Thirty six new towers had been built so far, 6 of these over the last quarter.

Almost 800 schools have received a fibre connection which is ready for service under the UFB and almost 700 schools under the RBI.

To date, 25 hospitals have received a fibre connection, 11 of these between January and March.