It'll be 2020 before half of us have fibre - IDC
Video content would help juice demand, research company says - adding that some regulation could be necessary.
Updatake of fibre offered under the government-backed Ultrafast Fibre (UFB) project has been ultraslow to date.
Recently the government said UFB fibre now passes 100,000 premises. But reports from wholesalers and retailers indicate only around 1000 (or 1%) of those within fibre have chosen to connect.
A new report from market researcher says uptake will continue to be slow for the first three to five years of the project (which has been officially underway for 18 months, but in earnest since June).
IDC used analysis of the past NZ adoption rates of mobile and DSL technology as the basis for its 11-year forecast (2012-2023) for customer uptake of the new UFB network.
Between 2015 and 2017, a four year period of rapid takeoff will then begin that will see fibre take-up increase from 10% to approximately 50% penetration (or 600,000 fibre connections) by 2020.
It will take at least nine years before fibre takes over from copper as the dominant broadband access method in NZ, IDC says.
The research company also looked at what drives fibre uptake.
"In other countries fibre rollouts have tended to arise either on a small scale or as a result of competitive pressure, for instance from cable TV players," says IDC research manager Peter Wise.
"Potentially some regulation of content rights in NZ will also be necessary." IDC notes the Commerce Commission is investigating Sky TV's content acquisition deals and ISP partnerships.
Cloud services are seen as a factor for business.
More education was need. For example, that fibre is a lot more reliable than DSL broadband, as well as faster.
IDC's review of overseas fibre rollouts found a combination of cost, performance, available content and social factors drove much of fibre demand.
In terms of immediate obstacles, a robust and consistent installation process is required, IDC says. Local fibre companies are busy trialing these but early reports indicate that one installation can take longer than a day and cause a lot of disruption for the householder.
Larger retail service providers will not want to risk their brands, until there is a consistent, positive installation experience for customers, IDC notes. The heads of Vodafone and Telecom have both recently told NBR the fibre install process is "no where near prime time." Together they hold around 75% of the retail market. Vodafone says it won't launch its first plans until early next year. Telecom says the second quarter next year.
IDC says there needs to be incentives for retail service providers (like Telecom, Vodafone/TelstraClear, CallPlus/Slingshot and Orcon) to embrace fibre.
"At present many are still recouping investments from the copper network which was unbundled in 2007. Unlike in Australia where Telstra and Optus have signed agreements to migrate customers to fibre and decommission their old networks, there are no similar provisions for retail service providers such as Telecom and Vodafone to migrate customers to fibre in NZ."
In Australia under the National Broadband Network (NBN) rollout, copper is ripped out at the same time fibre is laid - guaranteeing 100% uptake in quick time as fibre is rolled through towns and suburbs.
NBR staff
Thu, 22 Nov 2012
Thu, 22 Nov 2012
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It'll be 2020 before half of us have fibre - IDC
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