ojala:$30 NZD for un-metered 100Mbit/10Mbit is so cheap, do the carriers offer the Internet connection as a loss leader to make money of selling other services?
I don't think they loose money as part of the bigger picture. The fiber is a long-term investment and supports also the mobile infrastructure (the carriers here invest about 800-900 mnzd annually to their infrastructure), and even if some customers are on the red the total customer base will be on the black. The coverage is market driven, a single rural house -- most likely not available. A densely built, relatively new housing area or an apartment house? Most likely available. Small towns also install fiber with their local "we can do it" mentality.
I just did a lookup for an address where I know this carrier has fiber deployed. At this random address the 10/10 fiber connection is as a basic deal the housing area has with the carrier, no additional cost to the house owner. An upgrade to 100/10 will cost just 9.98e/month (less than 16 NZD/month).
There is an entertainment option for 19.90e/month (31.50 nzd/month) that includes the 100/10 access plus IPTV with 3000 hour of recording space in the cloud, rental videos, options for pay-tv and the rest.
Another address, without the deal, the prices would be 19 e/month for 10/10, 29 e/month for 100/10 (46 nzd/month), and 39.90 e/month for the entertainment package. No doubt if you buy the 100/10 access you'll soon receive a special offer the entertainment package.
For example OH's parents who moved to the new building didn't have any other option but the fiber as the carrier had not installed any copper. Want voice? Buy a mobile phone.
So yes, there is the incentive to try to get people upgrade to the IPTV offerings to increase ARPU. That's even the case with DSL -- my local DSL carrier sells standard full-rate ADSL2+ for 29.90e/month but there's the IPTV package for 39.90e/month that includes the full-rate ADSL2+ plus IPTV with pay-channels, 5 terabytes of PVR recording space, options for karaoke, F1, sport events, video rentals, etc.
The development has been driven by both the need to increase revenue but also to compete against the cable-TV that can offer internet access for speeds up to 200/10. Even if the DSL carrier has managed to streamline the installation times to a few days, the cable-TV can still beat them with instant activation.
There's also the marketing aspect. If we had capped internet, what can the carrier offer?
"You've got now full-rate ADSL with 5 gigabytes of traffic, why not upgrade to 10 gigabytes?"
"Eh, but I only use 4 gigabytes a month"
"You've got now a full-rate ADSL2, how about an upgrade to double speed ADSL2+ for just 5 nzd/month extra and we'll give you the first 6 months for free. How about that?"
That one goes both ways, and in my opinion once you get above about 10Mbps people value the extra datacap much more than the extra bandwidth
let me turn around your little hypothetical conversation:
"You've now got full rate ADSL2+ 20Mbps. Would you like to upgrade to VDSL 50Mbps for an extra $10/month?"
"Eh, but I only surf the web, watch HD youtube, read email, Skype, none of which uses more than 3-4Mbps anyway. Why on earth would I want to bother with 50Mbps?"
"You have 10GB of data per month, want to upgrade to 20GB for just $5/month with the first 6 months free?"
"Yes please, I hit my cap about halfway through the month so upgrading would be sweet!"