FTTH (Fibre-to-the-Home) and ADSL2+ in NZ

May 11, 2010

Having explained this now 5x in the last 24 hours, I decided it was time to blog about it.

This post summarizes why NZ broad band doesn’t “suck”, why FTTH isn’t going to solve what your problems are, and what you can do about it in the mean time.

It’ll also explain to you how “The Internet” works, here in New Zealand, as well as giving you some figures to compare us against the rest of the world.

What’s on offer globally? NZ vs the World:

Lets start by looking at Japan.

They have 90% of their homes capable of getting Fibre (1), yet only 30% actually *have* it. Why?

Likely because it’s more cost-effective to get something like ADSL broadband instead, and the benefits that Fibre provides over ADSL2+ for most people is very slim.

What about Korea? They’re apparently well known for their high-speed connections, yet speedtest.net (2) shows an average speed of 22.5m/bit (NZ it down at 4.9m/bit currently). Sure, there’s a lot of things that can affect their speeds, but it’s a decent indication of a “real world” scenario.

Lets compare us to England. In England, the Govt has just pledged to get the whole country on to 2m/bit connections by the end of 2012 (3), whereas estimates are only 1/3 the country will get their “next generation” broadband, of 25mbps.

Now, lets look at New Zealand.

How things were, how they are, and how they’re going to be:

Telecom launched “Jetstream Broadband” back a decade ago now, in the year 2000. They were on the cutting edge of technology, considering ADSL had only been approved as a standard less than 24 months earlier!

Since then, there have been 5 major upgrades in the likes of the Telephone exchanges (The central place where all the phones meet in your suburb, internet is pumped out from there), each one just as costly for Telecom to install as the previous. Can you imagine how that’s got to look trying to justify that to a board of directors?
“Hey guys, we know we’ve only *just* finished the last technology upgrade in each of the exchanges across the country, but there’s something slightly better available now and we want it. Yes, it’s gonna costs millions and millions of dollars but we want to give NZ the best available!”

I don’t know how they pulled that one off time and time again, but they did!

So fast-forward 10 years down the track and the Govt is mandating that Telecom install roadside cabinets across the country. There’s 3600 of them in fact, and they’re over half-way done right now.  The Cabinets have the same technology as the Exchange, they’re effectively a “mini-exchange” if you will, so that houses within a 2KM radius get the absolute *best* in speeds. This is because, the way that ADSL broadband works, the further you are from your Exchange (or roadside cabinet), the slower your attainable speed.

This is a good visual explanation: http://www.chorus.co.nz/f472,15074/15074_Fast_broadband.jpg

Telecom are promising that over 80% of NZ will have 10m/bit+ by the end of 2011.

Englands Govt is promising England just 2m/bit by 2012…

But it gets better. In areas that have been upgraded, NZ’ers are seeing an average speed of 16m/bit! (1)

But it gets even better:

Where the real problem is now:

Right now, many people get half-decent speeds between their home and their Exchange, but that’s not where the problem lies.

The real problem is that because there are so, so many homes that have broadband, all going back to the one Exchange, that the pipe from “The internet” to the Exchange just simply can’t provide everybody with enough to reach their maximum attainable speed.

What does this mean in laymans terms?

Imagine the road to your home is a nice wide road, and you’ve got a pretty decent car too that goes pretty fast. Now imagine that around peak time (Rush hour?), everybody is on the road to your home. What happens? Traffic slows down, and so instead of doing 50Kmph you only end up doing 10Kmph. Make sense?

Picture the roadside-cabinet rollout like this:

Now there’s not just one main road in your area, but potentially dozens and dozens, but the speed limit has been increased from 50KMph to 200KMph!

That’s what the roadside cabinets are doing. Now, if only we could have the same sort of improvements with rush-hour traffic in Auckland!

As Telecom Chorus roll out the new roadside cabinets, with the new ADSL2+ & VDSL2 technology, they’re also preparing for the possibility of running Fibre from these roadside cabinets, and as such the back-end infrastructure is also significantly upgraded from the cabinet to “The Internet” so that there’s always far more than enough room for you to speed along at 200KMph, and then-some!

But won’t Fibre be even better?

Well that’s a really good question. In terms of max raw speeds, yes.

VDSL2 (Which is also being rolled out at the moment) has a max of 50m/bit. Fibre has a max of 100m/bit. However that’s not the issue.

Right now, most people across NZ have a 3GB cap. This is because of two things:

1) The base-cost associated with providing your home with an internet service of some form
2) The high per-GB cost of international data

Data is estimated to cost USD$0.20 per-GB for international data at wholesale costs (What Telecom gets it for). It gets resold in NZ for around NZD$2 per-GB.

Why is this relevant? Well, regardless of if you’ve got Dial-Up, ADSL, Cable or Fibre, it costs your ISP for you to use data internationally.

Ask yourself this: Is it even remotely logical that we would get a super high speed plan, capable of downloading masses of data in a short time, for the same price as you currently get just 3GB to 10GB?

The long and short: No.

With having a higher speed fibre plan, you’re either going to chew through your measly 3GB data cap in seconds, or it’s going to cost you significantly more to have a bigger monthly data allowance. What’s the point in having a line that can burn through your data allowance in under a minute? Imagine if you get infected with a virus and it starts sending out to the internet, your bill at the end of the month would be astronomically higher because of the faster speeds.

Sure, prices may have adjusted then, data costs may be less, but why would the ISPs suddenly *give* away their margins?

I certainly wouldn’t roll out a multi-billion dollar fibre network, and then make a loss. Heck, if it’s the latest and greatest, then I’m going to charge for it and make it a “premium” product, just like everything else in this world is when they’re brand new.

Even when it’s not “brand new”, because it’s still “top of the line”, it’s never going to be as cheap as the likes of ADSL2+ or VDSL2, because there’s less involved in cabling to your house. They just have to lay new cable to each of the Cabinets as they upgrade them (3600 of them), not to millions of homes and businesses.

It’s also worth noting that new technology has shown speeds of 500m/bit achievable through using just a standard copper telephone line (4), and given Telecom’s history, if this technology is decent, do you think it’ll take long to get to NZ?

But I can’t survive with ADSL broadband!

Well actually you most probably can.

In fact, almost all the issues that you’ll find you have with ADSL, you’ll have with fibre.

If you’re going to be watching High-Def video on YouTube, gaming, VoIP calls and browsing the web all at once, you’re potentially going to run into issues on both Fibre and on ADSL2+.


Well when you load up YouTube, it just goes full-throttle downloading the video as quickly as it can. That’s just the nature of the beast. If you’ve got ADSL2+ or Fibre, you’re still going to run into issues where it uses up all of your connection and leaves no room for gaming, browsing or VoIP calls.

What you need is your ISP or your Router to manage the flow of things. Because in NZ we currently don’t have any ISP’s who will do this (Although I’ve discussed with multiple Big-Cheeses at Telecom the prospect of this), you have to do it yourself.

Basically what you do with your Router is what’s called “QoS”, which stands for “Quality of Service”. In a nutshell, it’s going to give some types of traffic, such as Gaming, or Voice calls priority over other things, such as file-sharing or video-streaming.

Some routers do this better than others, ask around your techno-savvy friends, on PressF1.co.nz for advice, or even here in the Comments

So, what are you saying with all this?

I’m suggesting that Fibre to the Home in New Zealand is *not* going to be the long-awaited savior people are hoping, but rather education about the different types of broadband available, and helping people get on to ADSL2+ (And cabinetized) connections will solve pretty much all of New Zealands issues that can be solved at an infrastructure level. Not only this, but it will all happen within the next 18 months, rather than 10 years.

Naturally there are exceptions to this rule, some people want to do things like real-time High-Def video broadcasting which you simply must have Fibre for. They’re the exception, not the norm. For the vast majority of NZ, Fibre’s not going to be any cheaper nor provide any tangible benefits in terms of usable speed or data caps.

Do yourself a favor, and get ADSL2+!


1) http://www.nbr.co.nz/opinion/chris-keall/average-nz-internet-speed-just-297mbits-akamai

2) http://speedtest.net/global.php#0

3) http://news.bbc.co.uk/2/hi/technology/8618507.stm

4) http://www.gizmag.com/ericsson-vdsl2-500mbits/11296/



  1. metres per bit??

    • Megabits per-second 🙂

  2. It seems you just spent a lot of time to say that you’ll use up your data cap faster o.o
    I think what most people would think is that generally when you are downloading something it will just take less time but I don’t see how it would use up more data unless youtube browsing or reckless downloading..

    • To be honest Ben, it will happen. When you go to websites that have a YouTube clip embedded that auto-plays (Bebo used to be a huge culprit), the video will start downloading. If you’re on a faster connection, you’ll chew through more of it.
      Because you won’t be spending so long waiting for pages to load, you’re more likely to sit there, for example on Facebook, and just click through all 200 new photos a friend uploaded in higher resolution rather than in small thumbnails.

      Using lots of data itself isn’t a bad thing, Big Time has proved there was a demand for it, as has Slingshots recent unlimited plan that has dismally affected that ISPs speeds. People want bigger data caps, and I definitely think they should be given them. I do however object to such an enormous spend on creating a network that largely duplicates what is already available multiple times over. There’s already FTTN through Chorus, and many other providers. Lots of places can get HSNS and on an unlimited plan, but the cost is the prohibiting factor. Same for Fibre, there’s a LOT of NZ covered, but its the cost that’s stopping wider adoption of the already available networks. Building yet another isn’t going to decrease the cost of anything.

  3. thanks chillingsilence, that’s one of the most succinct information pieces for we plebs i’ve read. cheers, glen.

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