Rural customers pay more and get less from telecoms companies supplying them with broadband internet services.
That is according to the Commerce Commission’s latest Annual Telecommunications Monitoring Report.
It puts the spotlight on rural services for the first time.
It finds the 13% of New Zealanders living in more rural areas outside the national fibre footprint are likely to have significantly lower performing broadband services that are more expensive compared with urban areas.
The Telecommunications Commissioner, Tristan Gilbertson, says there is a clear disparity in performance and cost between urban and rural areas.
“If you live in a rural area, your basic copper connection, averaging 9 Mbps, will cost about the same as what someone in the main centres pays for a 300 Mbps fibre plan," he says.
Gilbertson adds copper and 4G wireless broadband services are not just slower and more expensive in rural areas, but they are more likely to have data caps, in contrast with unlimited data elsewhere.
Other information from the report shows copper connections losing their historic legacy by slipping below 50% of all rural connections.
Satellite connections have taken up the balance, with the Commission calling them a "game changer" for the rural public.
But this has not fixed the affordability problem.
"If you’re in an urban area, you can get a high-performing Fibre 300 plan at a cost of between 1.1 % to 1.7% of the average household income," Gilbertson says .
"But if you’re in a rural area, that same level of spend will only get a basic copper connection, while a service that is closer to the urban experience, will cost around 2% to 3% of the average household income.”
But Gilbertson says there could be hope in the future, with competition likely to heat up with more service from satellites, and incentives to roll out fibre to more of the country.
23 Comments
Live in rural areas = poor broadband speeds. Live in urban areas = high land per sqm costs/housing costs in general.
But you're right, the Government should step in and install fibre to every rural road that feeds 10 or so people rather than letting the market deal with the issue. Just like we don't force locally produced Mainland cheese to be cheaper in NZ than Australia.
I'm in a rural area and I'm on UFB, and even town water. The cost of getting my septic tank pumped every now and then, plus the cost of a wheelie bin, is about the same as council rates charged to urbanites for the same services.
The market took care of me though - a developer is building a farm park just down the road so paid a whole lot of zeroes to get the services out there. All I had to do was dig a trench, and the UFB install was free.
Good to see ComCom highlighting this. I live outside of the village of Porangahau which is serviced by 1 x Telecom cell tower and 1 x One NZ (Vodafone) tower. Spark 4g wireless plans (27/17mps) start at $45/month with 40gb data cap.
One NZ's only offer is $75/month for unlimited ADSL 9/1mbs.
Hats off to the likes of Gecko who stepped into the void of faster than dial up services at reasonable-ish cost to remote areas, albeit at speeds similar to 4g. A reliable service except in the most severe circumstances like Cyclone Gabrielle.
I'm alarmed at the arrangement between One NZ and Starlink - Elon Musk, ruler of global communications is a scary vulnerability.
Thank you for the concern. Yes, parts of the area got pretty hammered.
LINZ put out high definition(0.5m) imagery captured 21 Feb - 7 days post cyclone, and covers from about Glenburn in Wairarapa and up to East Cape. I've used that imagery when interviewing farmers in the Porangahau River catchment, to determine quantum and cost of impacts on farms. Really, really useful on 2 counts - 1 similar to a helicopter fly over without the cost, and 2, freeze frame of impacts to take farmers back to 8 to 12 weeks post event.
The farmers I interviewed accounted for 47% of the moderately to severely impacted commercial farm land area in the catchment. Average impact per hectare, $638. Range per hectare $64 to $3020.
Perhaps the Commerce Commission can get involved around houses/rent costing more in Auckland.... Or cars costing more in the deep south... Or electricity costing more in the far north.... Or petrol costing more on Waiheke.... Or cellphones costing more in the Chathams....
No surprise they won't invest to upgrade and expand the train lines through the regions because 'cost'. Instead they can continue to spend much more maintaining, upgrading and expanding roading infrastructure, to keep as many or more cars on the roads, fuel profits and fuel tax subsidies flowing back to to fossil fuel companies.
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