The first phase of New Zealand’s ultrafast broadband rollout came to a close at the end of 2019. Alex Braae takes a look back at the decade-long project that was UFB1.
The thing about having an extremely fast internet connection is that it doesn’t take long to completely take it for granted.
A perfect example of this comes from a Dunedin co-working startup called Petridish. They’ve been around now for about a decade, and were among the first companies in the country to really be in a position to capitalise on fibre and ultra-fast broadband.
Part of the reason for this was their location. In 2014, Dunedin won the ‘Gigatown’ competition, with the prize being an accelerated rollout of fibre, along with funding for community and business development to take advantage of it. Petridish was one of the companies selected for support.
Petridish founding partner Jason Lindsay says the value of such a connection quickly became apparent, particularly when compared to the rest of the country. He described working on a TV show alongside a company in the relative backwater of Auckland, and uploading a huge cache of files from Dunedin to get up to them.
“There was a cut we sent to our client up there, and it took something like less than a minute to upload to them. I flew up the day after to go talk to them, and when I walked into his office he said ‘Man, I’ve been trying to download this thing you sent for the last hour.’
“It was something where you just couldn’t believe how different it was.”
Ironically, the support from the Gigatown grant Petridish received was to help fund a central data room for the building, to facilitate accelerated file transfers. But as it turned out, “just with the fibre itself, we didn’t actually need an accelerated file transfer system,” says Lindsay.
The improving quality of internet connections is potentially the biggest development in New Zealand’s infrastructure of the 21st century. And Lindsay’s story is a microcosm of how UFB and fibre have changed what is possible.
Put simply, the internet here used to be rubbish, with among the worst connection speeds in the OECD. And now, 75% of New Zealand’s population have access to UFB, with that number projected to rise to 87% by the end of 2022. New Zealand also has the second highest adoption rate of fibre in the world at 56%, second only to Japan.
And the speed has improved out of sight as well. According to Ookla’s Speedtest Global Index, New Zealand’s fixed broadband internet connections were the 24th fastest in the world, as of December last year. But from February this year, the country will crack the world top 10 for broadband speeds with the rollout of new ‘Hyperfibre’ technology on the Chorus fibre network and more people opting for faster gigabit broadband plans.
It’s not necessarily something that observers from that time would have picked as a development. The story of how it all changed is one of foresight, investment, and strangely enough, wisdom from politicians.
Ernie Newman was the chief executive of the Telecommunications Users Association of New Zealand (TUANZ) between 1999 and 2010. In that time, he was fortunate enough to see something that he had advocated for – a massive rollout of UFB – actually begin.
“We were very lucky that National, Labour, and the minor parties were all in agreement that this was a very legitimate form of government investment, and a good way to go. That political consensus has carried us forward.” Newman also pays tribute to the individual contributions of successive ministers, particularly Paul Swain and David Cunliffe from Labour, and then Steven Joyce from National.
A key moment was the split of Telecom into network operator Chorus and retailer Telecom (later Spark). “Back in 2000, we had for all intents and purposes a monopoly,” says Newman. “Telecom, as it was then, had convinced the government of the day that it was the only way to go, because a country of New Zealand’s size would always have a dominant supplier of telecommunications, and that the reasons prices were so high were because of unique challenges of demographics and topography.”
Newman says it was a defining goal of TUANZ over that period to debunk that theory, and that the industry today is completely different to that of two decades ago. “And while we were dealing with the competition issues, TUANZ also took a leap into the future around creating excitement about what high speed broadband that was affordable and ubiquitous could do for New Zealand industry.”
And the end result of it all is clear for Newman, who says telecommunications has gone from being a “key drag” on the economy, to being one of New Zealand’s great competitive advantages.
For such an advantage to exist, there has to be a comparison. And to look at how things in this space can go wrong, an observer would only have to glance across the Tasman to Australia.
Over there, a National Broadband Network (NBN) programme was announced before New Zealand’s fibre rollout, and has fallen well behind since. Despite billions more being spent than the original budget, Australia’s average broadband internet speeds right now are the 68th fastest in the world, sandwiched between India and Peru. The contrast becomes even starker when you consider that Australia has some of the world’s best mobile connectivity.
Essentially, Australia’s problems were both technical and infrastructural. Rather than having a network based on having fibre directly to where it is needed, Australia uses fibre to a central location, with copper spokes coming off that to reach consumers. They also encountered problems because Telstra was never unbundled in the same way Telecom was in New Zealand.
The success of of our own unbundling has meant that, despite distance and difficult geography, New Zealand’s connectivity and data speeds remain competitive with larger, more populous and considerably less isolated OECD nations. And the fruits of the investment are clear in the growing confidence of New Zealand businesses to actively rely on high speed internet.
Former champion rally driver Rhys Gardner’s business Gfactor (formerly known as CoDriVR) is an example of this. Gardner began his business “using an old Toyota Starlet in a paddock” to train teenage drivers. When he realised it could be done much more efficiently with technology, he made the switch and started developing Gfactor, a VR driving simulator.
It’s a hugely data intensive piece of tech, and required mapping actual New Zealand roads and presenting them in a photorealistic way inside the VR simulator. “It’s not hard for us to push files over 100 gig,” he said – which for comparison is about the equivalent of 25 full length movies in high definition.
That presents obvious technical problems. But being based in Dunedin, Gardner says the Gigatown competition and the rollout of fibre gave the company a new outlook on what could actually be possible. “I think looking back, the fast internet was an aspect of it. At the time, it was kind of like, cool – we can take on the world from Dunedin now.”
“I think it was a shift in perspective, and maybe a bit of confidence. Dunedin’s a wicked city, and if you can live here and build a company with global reach, why the hell wouldn’t you?”
GFactor is now looking international, as a result of the technology it’s developed having other potential applications, particularly in sport and gaming. Moreover, Gardner is confident that the simulators he developed have had an impact on teenage driver safety.
The original rollout of UFB – called UFB1 – was completed before the end of 2019, with 75% of the country now covered. Future projects, including the second phase of the fibre roll out, UFB2, will have a particular focus on smaller towns and communities. But if companies have been enabled to go global from a town like Dunedin, there’s every chance others will be able to do the same from even further-flung places.
The Spinoff Weekly compiles the best stories of the week – an essential guide to modern life in New Zealand, emailed out on Monday evenings.