New Zealand Consumers Global Leaders in Fibre Adoption

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freitasm

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#259806 23-Oct-2019 08:54

Received today:

DC’s ConsumerScape 360 Survey reports that 44% of New Zealand consumers now primarily access the internet through a fibre connection.

New Zealand’s adoption rate is more than double the average worldwide rate of 20%, and second only to Japan.¹ Despite the worldwide average remaining the same as it was in 2018, New Zealand consumer adoption has seen an 11% increase in 2019 from 33% last year.

At the same time, New Zealand saw increased adoption of a range of paid digital services in 2019. More consumers than the worldwide average are adopting video streaming, audio streaming, and cloud storage services; the first year this has occurred. Fibre users are especially likely to pay for these services, with higher adoption of each.

Richard Xu, associate market analyst at IDC, says this high adoption suggests that the average New Zealand consumer is placing more value in the quality of their internet connections. The increased value that consumers are placing on quality internet connections is driven by the growing availability of premium digital services.

“New Zealand’s leading rates of fibre and paid digital service adoption highlights our nation’s high level of digital fluency. It reinforces the notion that New Zealand consumers are increasingly valuing rich content in their digital lifestyles, preferring fast fibre internet connections to run said content,” says Xu.

The high fibre adoption rates reflect the success of New Zealand’s fibre rollout. The Government's objective is to bring improved broadband to 99.8% of New Zealand's population by 2023, with the build split into two stages. The first stage of the UFB build is close to completion, with local fibre company Chorus on track to finish its allocated portion before the end of the year. Currently, 78% of New Zealanders can access UFB.

Xu says that there is a lot of opportunity for internet service providers (ISPs) to develop a market in this space with many viable options for different customers.

“Fibre is by far the fastest type of residential internet connection in New Zealand at the moment, but mobile tethering and fixed wireless are viable alternatives. With Spark and Vodafone launching 5G networks in 2019, IDC expects to see these retailers start to offer faster fixed wireless broadband and mobile data plans in urban areas as the speed and capacity on their networks improve,” says Xu.

According to Xu, better connectivity will be a strong driver for digitalised lifestyles in New Zealand. Improved mobile connectivity will better equip consumers to adopt smarter devices and potentially have less reliance on a fixed connection.² Activities, such as remote working, are enabled as a result. This poses a challenge to traditional network cable wholesalers which will need to clearly define the strengths of their established products, or develop new innovative products, to meet customer demand.

Notes:

^1. Worldwide refers to the 19 countries surveyed – New Zealand, Australia, Vietnam, China, South Korea, Japan, Russia, Poland, Turkey, Sweden, United Kingdom, Germany, France, South Africa, India, Brazil, Mexico, United States and Canada.

^2. IDC defines smart devices as any device that can connect to the internet and has the ability to run rich-featured operating systems

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networkn

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#2342285 23-Oct-2019 09:20

I am glad to see that there are less and less people complaining about how "expensive" and "slow" our internet is compared to "everywhere else" (spoiler, it hasn't been for MANY years and in fact our internet is some of the best in the world).

ockel

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#2342315 23-Oct-2019 10:01

But where is the evidence (measured or anecdotal) that fibre has led to GDP growth and higher productivity.

Arguments put forward that fibre would have a net benefit have not been shown to be true. Instead we have consumer utopia for an economic cost to the taxpayer.

Sixth Labour Government - "Vision without Execution is just Hallucination"

networkn

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#2342326 23-Oct-2019 10:14

ockel:

But where is the evidence (measured or anecdotal) that fibre has led to GDP growth and higher productivity.

Arguments put forward that fibre would have a net benefit have not been shown to be true. Instead we have consumer utopia for an economic cost to the taxpayer.

How would you measure this accurately? If there hasn't been a significant uptick in those figures, I don't think you can discount it, because you don't know what the potential dip would have been without it.

I work in IT, I put in a lot of Fibre for Business, and I can tell you the improvements seem pretty impressive to me. Even OUR productivity at clients sites who have fast internet is better.

afe66

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#2342344 23-Oct-2019 10:27

Consumers are the taxpayers in many cases.
Quality of life has a value not seen in GDP.

ockel

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#2342436 23-Oct-2019 13:03

networkn:

ockel:

But where is the evidence (measured or anecdotal) that fibre has led to GDP growth and higher productivity.

Arguments put forward that fibre would have a net benefit have not been shown to be true. Instead we have consumer utopia for an economic cost to the taxpayer.

How would you measure this accurately? If there hasn't been a significant uptick in those figures, I don't think you can discount it, because you don't know what the potential dip would have been without it.

I work in IT, I put in a lot of Fibre for Business, and I can tell you the improvements seem pretty impressive to me. Even OUR productivity at clients sites who have fast internet is better.

It should be apparent in the GDP per capita. Capital investment, as postulated in the research papers justifying the UFB project, should give a measureable rise to GDP per capita (ie a productivity lift from using capital rather than labour). Economic researchers live for the ability to look at the impact of these sorts of projects and given the rapid nature of the rollout and uptake (vis a vis other nations) it should be a goldmine for proof. At a minimum I'd expect it to add to the body of research extolled pre-project.

Sixth Labour Government - "Vision without Execution is just Hallucination"

ockel

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#2342438 23-Oct-2019 13:08

afe66: Consumers are the taxpayers in many cases.
Quality of life has a value not seen in GDP.

The UFB project was not proposed as a consumer benefit project. Imagine how successful the notion of building fibre would have been in it was proposed for entertainment and faster communication purposes.

Instead areas such as health and telemedicine, education and business productivity improvements were highlight as the key reasons to undertake the build. Evidence of their benefits are scant.

Let have the taxpayers build a better located stadium for the consumers and improve their quality of life. Lets have the taxpayer subsidise the cost of food and housing and have a better quality of life. Why entertainment? So we can feel better about the world by watching our devices while the environment goes to hell in handbasket?

Sixth Labour Government - "Vision without Execution is just Hallucination"

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tdgeek

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#2342447 23-Oct-2019 13:21

Another thread where lil ol NZ punches above her weight, and we get negative posts.

Last time I looked, Fibre was used for other things than Netflix. At least a couple more. Maybe three

afe66

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#2342468 23-Oct-2019 14:17

Seen alot of medical teleconferences with patients in small town gp surgeries where previously they had to drive several hours...

Rolling out broadband arguably has been the most significant infrastructure longterm project in recent years.

There are a number of projects get run by central government that private sector wont do which in hindsight had significant benefit.

SpartanVXL

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#2342472 23-Oct-2019 14:21

As a anecdote I can definitely say that the dentist clinics wouldn't be doing 3d x ray imaging and keeping digital records of them on low bandwidth connections. Clinics got an IT upgrade and are working more productively with the newer tech.

evilengineer

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#2342476 23-Oct-2019 14:33

I'd love to adopt fibre but not much chance of it getting run past my gate. 😒

I'm sure we can recycle all these UFB productively arguments for 5G mobile with some IoT connected Cyber Cows and self driving cars chucked in for good measure.

PolicyGuy

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#2342480 23-Oct-2019 14:49

SpartanVXL: As a anecdote I can definitely say that the dentist clinics wouldn't be doing 3d x ray imaging and keeping digital records of them on low bandwidth connections. Clinics got an IT upgrade and are working more productively with the newer tech.

Yes!

Medical imaging is a field where the availability of reliable, reasonably high speed broadband has made a huge beneficial difference.
Quite apart from the environmental benefits of not using large quantities of toxic chemicals and precious metals, images can be taken and then viewed a couple of minutes later, not just on-site but remotely too. If there's something 'wrong' with the image, another one can be taken right away, rather than waiting for the film to be developed, couriering it across town to the surgeon, oops, make another appointment, wait ten or more days.

Oh, and instead of patients schlepping heavy packages of images around with them - and doubtless losing or damaging a proportion of them - weightless TCP/IP packets zing around from imaging centre to consulting room. In fact, two people separated by several or several hundred kilometers can look at the same picture at the same time at almost no additional cost.

We are so fortunate in NZ: in Sydney, "blessed" with the remarkable* NBN, the patients still drag huge envelopes (or boxes if you're really lucky) of "X-Rays" around with them for appointments. Ah, the Lucky Country ... not

* That's for not a good meaning of 'remarkable', b.t.w. ;-)

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nickb800

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#2342488 23-Oct-2019 15:17

Playing devil's advocate - how much of the above medical imaging stuff would have happened anyway with VDSL or P2P fibre (without UFB GPON would we have had more options for cheaper P2P fibre with lesser SLAs)?

Anyway, it's generational infrastructure so even if it hasn't successfully boosted GDP yet, it's far to early to call the project a failure

KrazyKid

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#2342490 23-Oct-2019 15:26

I work in Retail and can say that fibre has help made a significant positive difference to our productively. Out here in the store level the speed of the connection to HO (and admittedly improved infrastructure on site - some of which has been enable by having fibre) as made our job easier and allowed efficiencies and cost savings.

Rikkitic

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#2342499 23-Oct-2019 15:40

As a consumer residing outside the main urban areas, I LOVE my broadband, which has contributed enormously to my quality of life. I can't get fibre, and probably never will, but wireless broadband has been life-changing for me. At first it was RBI, a huge step up from the dial-up misery that I had been stuck on until then (with satellite impractical as being hugely overpriced and barely any better). Over time RBI was less than perfect, though still vastly better than dial-up, but then a local WISP became available to us and QOL took another huge leap upwards. Our broadband now is excellent for our needs and rock-solid. It gives us TV from around the world, international news, documentaries, and even the occasional blob-out film. I especially enjoy science documentaries and I am a much better informed citizen than I used to be. What is not to like?

Plesse igmore amd axxept applogies in adbance fir anu typos

raytaylor

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#2342582 23-Oct-2019 18:52

ockel:

But where is the evidence (measured or anecdotal) that fibre has led to GDP growth and higher productivity.

Arguments put forward that fibre would have a net benefit have not been shown to be true. Instead we have consumer utopia for an economic cost to the taxpayer.

Thats a question we probably dont want an answer to if it relates to urban residential fiber.

I can give some insight though - we use parts of the UFB network to transport data to rural radio sites and there is a boatload of industry going on in farm sheds. Two examples i have of subscribers are

1) A guy who runs a fruit juice company that exports to asia. He started processing it in a shed he built on his section of land and probably would not have got into business had broadband not been available (eg. needing to find an urban warehouse and office, startup costs therefore higher etc.)

2) A container sits in the middle of a vineyard which has been converted into a office surrounded with some nice scenery by two blokes who moved here from england. They wanted a nice place to work from that had good internet.
What do they do? They design rail intersections for British Rail. I would suggest that is two jobs created.

I can do what I do in the rural sector, because of some very specific fiber routes installed under the UFB project. However getting faster internet to an urban resident for netflix when VDSL was avaliable, has probably created a net job loss because fiber is much more reliable and has less faults than copper, therefore more profits for the LFC which may be owned by overseas investors.

Ray Taylor

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