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Adams updates on UFB numbers: many homes passed, few customers connected - still

The great New Zealand public has get to take to fibre rolled through neighbourhoods under the Ultrafast Broadband scheme, backed by $1.35 billion in taxpayer cash. PLUS - RAW DATA: The latest UFB and RBI report.

Chris Keall
Thu, 09 May 2013

UPDATE / May 9, 2013: The latest quarterly fibre rollout report continues the last instalment's key themes: the Ultrafast Broadband (UFB) fibre rollout, backed by $1.35 billion in taxpayer funding, continues apace. 

But while many premises have been passed - the new total is 171,886 - only 5133 (3%) have taken advantage of fibre coming to their neighbourhood and got connected. The true number is lower than that still, as the 5133 includes connections ISPs have set up for staff and customers on trials.

Progress in other areas is harder to gauge.

1500 schools now have access to fibre, but the report does not detail how many have connected. Neither are connection numbers for health care providers and businesses provided.

And similarly while Vodafone celltower upgrades and attendant fixed wireless broadband now cover 100,120 house holds under the $300 million, six-year public-private Rural Broadband Initiative (RBI), and 42,400 have access to upgraded Chorus cabinets under the same scheme, connection numbers are not detailed.

NBR has asked for more connection numbers, but don't hold your breath - last quarter ICT Amy Adams refused to provide that detail [UPDATE: Her office was not able to this quarter either, but Crown Fibre Holdings updated NBR that of the 5133 connetions,  priority users (business, health & schools) accounted for 1930 connections, and the balance were residential users.]

Why the low UFB uptake?

Pundits can grouse about the pricing (entry level plans are the same as copper/DSL, but you have to shell out more to get a decent data cap). And the lack of any new bundled pay TV service that many think could be the killer app (Slingshot is now offering an igloo box, but not as any point of difference or price advantage. The Sky TV lite service is available to all-comers, on copper or fibre).

Those factors are important, and will loom larger as the rollout progresses.

But for the period of this report (January 1 to March 31) the be-all-and-end-all of the matter is that around 50% of households are on a Telecom internet plan, and around 30% have Vodafone (now including TelstraClear) as their their ISP.

Neither of those two giants offered fibre before as of March 31. Telecom launched at the end of April. The carrier reported chipper week one numbers (with 242 signing up), but with no voice service, and related issues with overhead lines that still effectively sideline a third of its customers the company won't have a full-force rollout until later this year. Vodafone has yet to set a launch date.

Ms Adams says uptake is in line with the government's expectations for this phase of the rollout.

RAW DATA: Read the March quarter UFB & RBI report summary (PDF).

Feb 24, 2013: The Ultrafast Broadband (UFB) fibre rollout, backed by $1.35 billion in taxpayer funding, continues apace.

ICT Minister Amy Adams today released figures showing Chorus and other UFB contract holders have now laid fibre past 131,366 premises - including 33,126 in the latest quarter - giving 134,126 customers the chance to connect to super fast fibre.

Problem: only 3806 (2.8%) have signed up for a UFB plan (and a good whack of those will be trialists with ISPs who have yet to launch commercial plans).

Retail ISPs confirm it's slow going. 

Only two of the Big Five ISPs that dominate the retail market (see below) have released UFB plans: Orcon and Callplus (which includes the Slingshot brand).

Last week, Orcon told NBR it has only connected around 1000 customers. A futher 10,000 or so are on a wait list.

And CallPlus boss Mark Callander told NBR ONLINE his company had only connected around 200 - mostly schools and businesses. It planned a bigger residential push next month.

Why so few customers?
It's probably not price. Internet service providers are offering fibre (which includes phone service) from $75 a month, roughly matching the cost of a home line plus DSL (copper) broadband.

And a lot of early adopters and trialists report a good experience (see NBR's whirl with fibre, plus pictures of a typical home installation, here).

There is a lot of ignorance about the benefits of fibre. Politicians talk about 3D spacial telemedicine, but people need to hear about the more everyday benefits of fibre, such as more consistent speed with minimal rush-hour glug; no degredation of bandwidth with distance from your nearest phone exchange or cabinet; and much faster upload speed - all the better for everything from cloud computing with software like Google Apps or Microsoft Office 365, sharing, photos and videos online or actually being able to backup your files to the internet without a multi-hour wait. 

But the over-arching reason for slow uptake is that 80% of people get their broadband from Telecom, Vodafone or TelstraClear (recently bought by Vodafone).

And none of those big three have launched residential fibre plans - although Telecom says they will arrive next month.

Ms Adams says UFB subscriber numbers are at the level to be expected at this stage of the rollout. The government has alwasy said it will prioritise education, health sector and business connections (the latter would be interesting to break-out; NBR has put in a request).

RBI update
Ms Adams also updated on the numbers now covered by the public-private $300 million, six-year Rural Broadband Initiative.

Under the scheme (won by a joint bid from Chorus and Vodafone), Vodafone has now upgraded 131 celltowers and installed 30 new, giving 89,235 access to wireless broadband.

And Chorus, which is looking after fibre backhaul (links back to the main network) has now upgraded 347 cabinets, covering 36,100 households.

The minister did not say how many rural households have taken advantage of this boosted broadband coverage and signed on to a plan make available through the RBI upgrades. NBR has asked for that detail.

RAW DATA: UFB, RBI quarterly report

ISP market share
Telecom: 49%
Vodafone-TelstraClear: 29% (TelstraClear today: 16%; Vodafone: 13%)
CallPlus (incl Slingshot): 9%
Orcon: 5%
Others: 8%

Source: Commerce Commission 2012 telecommunications market report

Chris Keall
Thu, 09 May 2013
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Adams updates on UFB numbers: many homes passed, few customers connected - still