Chorus connection plan welcomed

02:45, Nov 01 2012

Today's confirmation that Chorus will provide free ultra-fast broadband connections to many residences with awkward access is good news, a telecommunications commentator says.

Network provider Chorus announced in partnership with the Government today that it would contribute $20 million towards the cost of connecting "non-standard" homes, in an effort to encourage greater uptake of high-speed broadband.

Up to 30 per cent of homes within the UFB rollout zone are thought to have fallen into the Chorus "non-standard" category.

Paul Brislen, of the Telecommunication Users Association of New Zealand (TUANZ), said many urban houses were more than 15m from the street, Chorus' previous limit for free fibre.

So today's announcement that Chorus would extend that limit to 200m was "tremendous".

"That captures 99.3 per cent of the [UFB network] population, possibly even more ...That means everybody that can get connected will be able to without extra cost."

However, Brislen said there was a drawback in that the offer only lasted until 2015, by which time only about a third of the network would be completed.

"Most of the connections for residential customers won't take place until after 2015, so we need to use this to get the ball rolling and then revisit it rather quickly."

Chorus, which has contracts to provide 70 per cent of the Government's UFB network, has so far rolled out 1500km of ultra-fast fibre, enough to connect 72,000 customers.

But to date, only 700 have signed up.

Brislen said the problem was that speed alone was not enough to encourage many customers to switch to UFB. Overseas, penetration of ultra-fast broadband was about 38 per cent and a good uptake in New Zealand was important to justify the expense.

The Government was contributing nearly $1 billion in loans towards Chorus' work and low uptake might mean the company had to repay those loans more quickly.

A Chorus spokesperson said it was difficult to gauge how many houses would benefit from the changed criteria, but it saw the need to provide an incentive to sign up to UFB, "particularly in the early days".

"Once it starts to build up the momentum, we believe the market will look after itself."

Chorus' offer goes to internet service providers like CallPlus and Orcon, which would choose whether to pass the savings onto the consumer.

But Mark Callander, ceo of ISP provider CallPlus, said anything that cut their costs was a good thing.

"You go through Ponsonby, everybody's right on the curb, but you go to places where there's been subdivided sections and right-of-ways ... Anything that reduces the upfront costs to the customer."

Chorus said that not everyone was covered by its offer including rural dwellers and remote residents, who are not part of the UFB rollout but may be covered by the Government's rural broadband plan.

Other exclusions were gated communities, which had consent issues, and big apartment blocks, which came under a different broadband deal.

The company stressed the $20m funding did not affect its previous capital expenditure guidance.

Chorus plans to lay 17,000km of the new network which is due to be complete by 2019.

By that point, the network will cover more than 830,000 urban homes, businesses, schools and hospitals.

Chorus' news was followed by an announcement from Christchurch UFB installer, Enable, which said it would offer free connections for residential customers in the greater Christchurch area until the end of 2015.

"Free connection, and the fact that fibre broadband services cost about the same each month as copper services, addresses any concerns potential residential users have about the cost of moving to fibre," Enable chief executive Steve Fuller said.