Vikram Kumar - Chief Executive, InternetNZ

“I think fibre is hugely important. It went in 2010 from being an idea that some people were pushing to an election promise which was being delivered. And that’s wonderful. We got the first fibre in the ground. It’s true that we’re maybe three to five years away before we get fibre at home. But what was really important was the promise that fibre is coming, that the deals required to structure various things, to get us the fibre is happening. Also very important is the rural aspect – the Rural Broadband Initiative – because rural New Zealand isn’t rural in the normal sense but just outside the main cities, have very poor broadband. And getting them decent broadband is a huge step forward. So I think 2010 was the year when we made that first step even though actually getting fibre is a few years away.

The problems we had with that was, because it was an election promise that was being delivered, I think there’s an acute lack of leadership and vision and people being able to say “What are we going to do with the fibre and why do we want the fibre?” So we talk about demand and supply but there’s very little talk about the economic, social and cultural transformation that the fibre and rural broadband will bring us. So I think that there’s a very real danger there that we will continue to talk about fibre simply in terms of faster or how can we upload more things... there’s very little about “So what does this actually mean for New Zealand?” The second thing about the fibre is that, if things work out, it will mean the separation of Telecom into two different organisations and that’s really interesting because that holds a promise for more competition, more innovation, more ability for multiple players to start innovating and using the Internet rather than simply having a single incumbent with very little competition, which is what we have today. So to me that’s a huge promise of fibre beyond the faster speeds that we will get.

The main thing about Pacific Fibre was simply the announcement of a second cable has led to a huge drop in international prices so that’s really important. So irrespective of whatever happens, we’ve already seen the benefit in 2010 of the announcement. And that’s the way international capacity works is pricing based on future capacity. So that’s already a good thing. The second thing is that New Zealand has a very large proportion of its Internet traffic heading overseas and having a second cable means that we have the capacity and the cost in the future to be able to reduce the cost of that. And that’s really important. I don’t think we’ll ever get lower prices at home if we don’t have enough international capacity. Now it’s a separate issue that we have to solve this problem of so much of our traffic going overseas and increasing the amount of content hosted within New Zealand – but as long as that happens... Something like 80-85 percent of our traffic goes overseas so having a single cable is probably a big risk to New Zealand.”


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