By
February 03, 2021
New Zealand has recently emerged as a world leader in fibre broadband growth, putting us on track to leapfrog the capability of many other nations. And even as the market matures, there remains plenty of room for growth.
The country’s fibre network has developed rapidly since we began our Ultra Fast Broadband (UFB) programme in late 2011. Last year, the number of Kiwi homes and businesses connected to fibre grew 250% to 70,600. That was the fastest growth in the *OECD, and took New Zealand eight spots up the fibre ranks from 28th to 20th place.
And we’re not done yet. Connections will continue to grow as our fibre coverage increases. New Zealand’s goal of giving 75% to 80% of homes access to UFB by 2020 means we’ll soon overtake the fibre reach of many other countries.
High-speed copper broadband (VDSL) is also widely available in New Zealand. According to Paris-based research company iDate, two out of three Kiwi households have access to this service, ranking us 9th in the OECD. This puts New Zealand’s coverage of ‘next generation’ broadband (VDSL, cable, or fibre) above the OECD average.
But as New Zealand’s broadband market begins to mature, the focus is moving from rapid growth in capability to using our world-class network to its best advantage. We have certainly not yet reached our potential.
Signs of maturity
New Zealand’s rates of overall broadband penetration show our rapid growth rate is slowing down.
In December last year, broadband penetration was 32% (or 31.62 subscriptions per 100 people). This was above the OECD average of 28%, and ranked our country 15th out of 34 nations – having previously overtaken Japan, America and Australia.
In fact, our penetration growth has been higher than the OECD average for the last two years. But in December 2014, that growth began to ease. This pattern, also seen in countries like Canada, Sweden and Germany, signals a maturity of the market.
Even so, world broadband trends suggest there is still room for growth. Other mature markets, such as the United Kingdom, France, Canada, Finland and the Netherlands, have penetration rates of up to 49% depending on population density.
Opportunities for growth
When New Zealand began its UFB programme in December 2011, we ranked 26th for fibre coverage in the OECD. In December 2014, we had jumped to 15th place with 31% of households able to access fibre. More recent data suggests our ranking is even higher. The Ministry of Business, Innovation and Employment’s June report would put us at 12th place, with 41% coverage. And according to iDate, our fibre coverage to homes and buildings grew 147% in 2014 – the 3rd highest growth among the 33 OECD countries it tracks.
But while over 700,000 New Zealand addresses can now access fibre, most haven’t taken advantage of the better, faster broadband at their fingertips. Fibre makes up just 5% of broadband connections in the country – leaving plenty of room for growth. In fact, 60% of Kiwi homes and businesses could be on a better broadband connection at their address right now.
The challenge is twofold; engaging people who don’t yet see the value of broadband or a better broadband connection, and educating consumers on what is available to them. We can be proud that New Zealand is now punching above its weight when it comes to broadband capability, after the rapid growth of our network in recent years. But the opportunity now lies in helping more Kiwis experience the social and economic benefits that fibre broadband can bring.
*OECD: The Organisation for Economic Cooperation and Development (OECD) is a forum where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies, to promote economic growth, prosperity, and sustainable development. The OECD is a global leader in providing internationally comparable statistical, economic and social data, including telecommunications.