Peter Griffin writes about his experience witnessing the Dutch program of Government rolling out Fibre to the Home (FTTH) throughout Amsterdam. Peter says;

The Dutch, you see, are where New Zealand needs to be this time next year – blowing fibre through underground ducts in order to get better broadband to large numbers of homes and businesses.

Of course he’s partially right – New Zealand does need FTTH and the faster more reliable internet speeds it brings. However, as always, there’s a big difference for NZ. Rolling out fibre to a city of 1.5millions inhabitants within a tight geographical area with close to 10 millions inhabitants is very different from what would be required to get FTTH here.

So the challenge for New Zealand isn’t simply that the Government should pay for/facilitate FTTH, this in itself is nowhere near enough. The challenge is in rebuilding our economy into a high value one such that the investment in infrastructure is worthwhile. The facts is we’re struggling to identify businesses that truly need FTTH – everyone pulls out Peter Jackson/Weta Workshops and their ilk but these are very much the exception rather than the norm (and arguably a small number of players could be provided with ultra high speed access in clustered business/technology parks).

The fact is that the vast majority of our GDP comes from primary production with little or no need for FTTH – until we reinvent our national income stream, any discussion that looks at FTTH in isolation is meaningless.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

5 Comments
  • Resounding YES to this article. I’d love to see and help the transformation to a digital based economy.Fast internet is only one small issue (technology is the easiest part to solve). Businesses demanding and requiring these services are currently the bottleneck.

    The other thing is productivity. Everyone trots out our low productivity figures..but we also trot out the figures that kiwis work amongst the longest hours in the OECD. Its worth understanding that productivity includes all workforce members contribution minus costs…so it includes our beloved, bureaucratic and massively overweight (25% of the country) government…. take them out and things are actually quite good

  • I agree that FTTH is not the most important issue. I’ve always believed that opening up international bandwidth and solving the peering debacle will do a lot more to help grow the digital economy. After all most of our potential customers do not reside in New Zealand.

    http://geniusnet.blogtown.co.nz/2007/12/02/do-we-really-need-ubiquitous-broadband-infrastructure/

    On Monday I’ll be posting an article about a NZ business that aggregates demand for creative content and is a perfect examplar for why we need competitive and fast broadband access across the Pacific.

  • So to paraphrase, is it more important to “secure our digital trade routes” ( Rod D’s term) or to build fast internet connections to everyones home?

    I think theres a 3rd element, and Paul hints at it. That being lets build some digital businesses…. it would be a nice problem to have so much demand on the international cables because of our digital businesses..

  • Excuse me mate I need synchronous up/down internet. And excuse me for saying this but if you don’t want and need fibre do you not want and need a roading network. Because it is hypocritical to say you want a roading network, a schooling system and to say you dont want the internet. And guess what, your already on the internet so I guess you lied!. I guess you do want the internet because your already using it.

    And you completely fail to see that this is essentially a highly profitable business venture that the national lead government is going on. The government will guarantee a 10% interest on all bonds that company’s who enter the ppp will get on every dollar they invest. So that means that they are sure that it will be returning more than 10%pa. Because they wouldn’t have said they will guarantee it if it wouldn’t happen as they would lose money.

    And a guaranteed 10% return on money invested into the fibre network will provide a steady, safe and stable investment for the governments money put into this. And as a bonus we will be getting better services for less than I pay for mine. This is a business in devour which will provide the government with a fair return for their investments and also lower the price of it for our company’s in new zealand. After all we can not compete with overseas company’s if all our company’s costs are higher than their overseas competitors.

    And just to point this out I am shure that many people complained when the government made their national fibre grid, or when they put roading in. And yet I do not see them complaining now. And do not forget that this will take time to build. By the time we build it and get 100/100 plans japan will undoubtably be at 10Gbps which is an increase of 10x their current best plans which are 1Gbps and are 10x the speed of their previous best plans. And most people in japan are on the 100/100 plans so yes their is demmand. After all they are consuming it… So shut it..

  • “Because it is hypocritical to say you want a roading network, a schooling system and to say you dont want the internet. ”

    To YOU Jacob, to you. If you want and or need synchronis fast internet speeds, pay for it like every other business. (btw good on you if you have a digital business).

    My point is, that without businesses to use the internet the investments pointless. FTTH is even more pointless…fast facebook? Better Youtube? if you are running a business from home, then fair enough…but again pay for it.

    Comparing our speeds to Japan is a fools errand. They have a population density and digital economy that means investment is much more easily justified.
    Finally a 10% Roi is nothing. Cost of capital is currently sitting at what ? 6%? that means 4% return. just (JUST) over the return from putting it in the bank. That is not a good investment pure and simple

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