UFB uptake jumps 42%

ICT Minister Amy Adams

ICT Minister Amy Adams latest UFB uptake report says 320,000 end users now have access to Ultrafast Broadband (UFB) fibre - and increase of 21,000 in the three months to September 30.

The number who have chosen to actually subscribe to a UFB plan rose from just under 10,000 to more than 14,000 during the period.    

That means UFB uptake has increased from a miserable 3% of those who have fibre within reach to a slightly-less-miserable 4%.

Ms Adams says the numbers are as the government and Crown Fibre Holdings expected at this point in the 10-year rollout. 

The minister says in addition, under the Rural Broadband Initiative (RBI), more 137,000 rural homes and businesses now have access to fast wireless broadband, and about 56,000 rural homes and businesses have access to improved copper broadband services. Actual connection numbers haven't been given in any of the minister's quarterly reports.

The September quarter captures a period of increased UFB-related marketing by Telecom (which holds around 50% retail share in the ISP market), but not Vodafone's UFB launch.

Earlier, Chorus CEO Mark Ratcliffe told NBR "We’d all like it to be faster."

"I suspect we’ll see the competitive dynamic changing a bit when Vodafone’s in the market. When you’ve got the big two retailers going head-to-head, competition drives greater demand.

Chorus is responsible for around 70% of the UFB rollout by premise.

Vodafone's UFB launch - which began October 4 - will be captured in Ms Adams next quarterly report.

Another problem identified by Mr Ratcliffe remains, however. People living down a right-of-way, or in an apartment building, face up to months of delays while Chorus locates then seeks permission from all owners involved. The Chorus CEO wants the government to amend the RMA to make UFB a designated service, meaning it could lay fibre up a right-of-way or into a multi-tenanted building straight away.

Questions also linger over what will happen once Chorus' $20 million free connection kitty runs out around the end of 2015, and where the independent inquiry into Chorus' finances and UFB capability commissioned by Ms Adams will lead.

RAW DATA: Quarterly Broadband Deployment Report (PDF)

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Once again the RMA is frustrating moving NZ forward. The government should amend the RMA immediately, and under urgency if necessary, to make fibre access down shared driveways and into apartment buildings a designated service, just like telephone lines ans electricity lines.

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What happens when Chorus are forced by big government to reduce their copper prices putting the company at risk (nobody seems to be denying anymore that such an action may put Chorus at risk, just whose fault it is)?

Will we see fibre uptake going in reverse as those early adopters suddenly decide that they have been there, done that, and would now rather pay less (assuming the ISPs actually pass on any cost saving) in order to look at their facebook pages?

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Chorus bid for UFB business in full knowledge that the 2010 update to the Telecommunications Act included a move from retail-minus to cost-plus pricing , which ever pundit at the time say as likely to mean a big drop in the regulated price of copper - hence the three-year delay to allow Chorus to prepare for it.

Clearly the government or Chorus or both under-estimated the cost of rolling out fibre (and Chorus has already upped its estimate by $300 million). And the over-run is likely to get worse as pressure comes on for so-called "non-standard" installations (right-of-ways, apartments) to be free throughout the life of the 10-year project rather than just until the end of 2015 (among other cost pressures).

The government now has to decide whether it takes a soft, indirect route in helping Chorus (such as over-ruling the Commerce Commission to prop up the price of Chorus' near-monopoly copper line business); whether it overtly props up Chorus and the UFB by lending Chorus more money or buying more shares in the company (remembering it already has $928 million committed for non-voting shares and interest-free debt securities), or whether it takes a Tony Abbott-style path and scales back the UFB (across the Tasman, the National Broadband Network is being scaled back from fibre-to-the-premise to fibre-to-the-node, or neigbourhood).

Lastly, fibre isn't about connecting to your Facebook page faster. It's about being able to use cloud computing services in fast, reliable, practical fashion. In a couple of years, that's all business computing will be about - whether you're working from the office or remotely.

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OneTrack mind is about right - Internet is only about checking FaceBook according to OneTrack.
UFB was never about faster web browsing - it's about enabling advanced data services and rich content to the home. It's about so much more than web browsing. The possibilities are hard to grasp when these services are not yet offered.
Imagine bundled HD/UHD TV and UHD movie services coming down your fibre to your 4K TV. Imagine integrated TV and Internet access all on the one device at instant speeds. You actually need to have an imagination and a little technology background to understand the possibilities. The idea of 'downloads' and 'uploads' will be a thing of past as everything can be streamed at full consumption rate.

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