Skip to main content

Fiber-to-the-Home is Economic Development

Fiber to the home (FTTH) reaches approximately one percent of residences in the U.S. market -- and that's after a couple of years of rapid growth. It's unlikely that this market penetration will change significantly, due to the apparent lack of proactive public policy.

The challenge: the leading global markets continue to lead, while the trailing markets continue to fall behind. Other nations are wrestling with many of the same issues that has held back America's infrastructure investment rank within the Global Networked Economy.

The NZ Institute analysis of New Zealand's need for fiber to the home will generate much-needed debate in New Zealand about the role of broadband in New Zealand's economic future, according to the latest market assessment by IDC.

Telecommunications Research Manager, Rosalie Nelson, says that while IDC is forecasting strong broadband growth in New Zealand over the next five years, they will be running very hard to catch up.

She says New Zealand's rate of broadband penetration remains low, limited to 16.5 broadband connections per 100 inhabitants at the end of the September 2007 quarter. This puts NZ well behind the OECD average of 18.8 across 30 countries and the 21 to 34 penetration rate in other developed broadband markets.

IDC is forecasting that broadband connections will increase 79 percent to 1.5 million subscribers by 2012, leading to total broadband revenue growth of 58 percent to $782 million. However the vast majority of this will be driven by xDSL -- IDC forecasts fiber-to-the-premises connections will be 80,000, comprising just 4.5 percent of the total.

"The total rate of broadband growth means New Zealand will move ahead of the OECD average broadband penetration rate in late 2008 or early 2009. This will improve our broadband penetration to where leading markets are today by 2012, but we do not estimate it will significantly improve our ranking given continued growth and saturation in leading markets over the next five years."

"Even more critically, penetration won't change the actual speed and throughput we need to really drive the economic benefits described by David Skilling. This is, in part, the tyranny of distance. To obtain broadband speeds of 50Mbs to 100Mbs requires fiber direct or extremely close (900 metres or less) to the premises. In New Zealand today, 51 percent of homes are 1.5km or more from a telecommunications exchange, which means they will receive speeds of 10Mbs or less. Cabinetisation will only redress the problems for premises more than 2km from the exchange," Nelson adds.

Nelson also says the Government has a critical role to play in any fiber to the premises deployment.

"If we rely on commercial and competitive incentives to drive fiber deployment we won't get the economic outcomes we require. The Government has a critical role to play -- it has the ability to drive infrastructure development for economic and public good at a lower cost of capital, and introduce new types of public private partnership. However this must be carefully managed in order not to override or distort competitive market outcomes," she says.

"In a number of European markets, the move to fiber is being driven by new types of municipal partnerships, involving local authorities, utilities and housing developers, in addition to aggressive competition. But we need to be realistic -- it is often limited to densely populated urban centers where fiber link to a basement can serve multiple apartments. Any model for New Zealand must account for the challenges of local scale and environment."

Popular posts from this blog

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul

How Cloud Fuels Digital Business Transformation

Across the globe, many CEOs invested in initiatives to expand their digital offerings. User experience enhancements that are enabled by business technology were a priority in many industries. Worldwide end-user spending on public cloud services is forecast to grow 21.7 percent to a total of $597.3 billion in 2023 -- that's up from $491 billion in 2022, according to the latest market study by Gartner. Cloud computing is driving the next phase of digital transformation, as organizations pursue disruption through technologies like generative Artificial Intelligence (AI), Web3, and enterprise Metaverse. Public Cloud Computing Market Development "Hyperscale cloud providers are driving the cloud agenda," said Sid Nag, vice president at Gartner . Organizations view cloud computing as a highly strategic platform for digital transformation initiatives, which requires providers to offer new capabilities as the competition for digital business escalates. "For example, generativ

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year