Published on the 19/02/2016 | Written by Clare Coulson

UFB connections are up 135 percent on last year. Although businesses are lagging behind consumers in uptake, Minister for Communications Amy Adams says she is not concerned…

The Government’s latest quarterly report to December 2015 shows UFB connections have grown to162,000, meaning uptake increased from around one-in-nine to almost one-in-five. The report shows fibre coverage increased by 54 percent last year, with more than 300,000 additional households and businesses now able to connect for the first time.

While the statistics show that 90 percent of business areas are able to connect, there are no firm numbers on how many businesses versus residential properties have taken up the offering. Anecdotally, however, all interested parties agree that uptake among businesses is slower than consumer uptake. Research published by the Innovation Partnership revealed that greater use of the internet by New Zealand businesses could generate $34 billion in productivity gains, with web-savvy businesses six percent more productive than their peers.

TUANZ CEO Craig Young says policy makers should be concerned that there are not more businesses already connected. He puts the lag down to a number of things: firstly, he says there are a lot of small businesses that are happy being small; then there are the SMBs who are just working hard to keep up and perhaps don’t know where to go for help; and finally there may be some distrust of Big Telco.

In its half year earnings report, Spark CEO Simon Moutter noted that overall demand for fibre is booming, however, a poor industry-wide fibre provisioning process is impacting customers, driving an increase in complex queries involving multiple parties and placing pressure across Spark’s contact centres. He did say that a dedicated effort on a number of fronts is underway to improve the customer experience, but nightmare stories could be putting off potential customers.

Minister Adams had another theory, observing that NetFlix and its ilk are driving the uptake of consumer fibre connections and the slower movement in the business area could be because there is not currently an equivalent application or content in the business space that requires UFB to really fly. This is backed by Moutter’s observation that video is now more than two-thirds of its total network traffic and growing fast.

She admits that small businesses have a long way to go but is not worried by the fact, having spent the last three years assuring doubters that users would want the UFB once it was built. Now people are signing up for fibre at the rate of 12,000 to 15,000 per month. Every day she says she is hearing stories of how the technology has transformed businesses.

“I have absolute confidence that business connections will grow and explode in the same way that residential use has.” She likened it to the impact of mobile on our lives: in just a few short years we have gone from them being the preserve of Auckland yuppies to being indispensable.

Government’s policy was to prioritise fibre connections to schools, hospitals and business areas first. Now that this is virtually complete, it has turned its thoughts to encouraging users to connect via its Digital Economy Work Programme overseen by the Ministry of Business, Innovation and Employment.

“The government doesn’t want to be a long-term telco, but we do want to prime the pump,” Minister Adams said of the work group. “I have absolute confidence that businesses, like consumers, are very quickly learning exactly how important it is.”

TUANZ is also working to put together resources and tools that will help businesses to make their decision about fibre. Young says that businesses want to connect but don’t necessarily know where to go or how to do it. A third party, vendor agnostic information source should help to mitigate that, he says.

At a glance:

• More than 875,000 homes, businesses, schools and hospitals now able to connect to UFB
• 162,913 connected to UFB – a 22 per cent increase on last quarter
• Build 60 per cent complete across New Zealand
• UFB uptake is at 18.6 per cent
• Over 200,000 businesses able to connect to UFB

UFB: Year on year improvements

December 2014	December 2015
End users able to connect	570K	875K
% project complete	42%	60%
% businesses passed	87%	~96%
% schools passed	91%	100%
Uptake	11.3%	18.6%
Connections	69K	162K
Order / working day	400	~950
Connects / working day	200-250	~600
Gross connects / month	4000-4500	~12,000