INSIGHT: The road to survival for small NZ fibre providers

Industry expert Brendan Ritchie, CEO, DTS provides his road to survival for small fibre providers in New Zealand...

Chorus are steadily rolling out UFB fibre across New Zealand, and as they do, they are encroaching on areas where a number of smaller regional providers hold a substantial market share.

Vector, CityLink, Electricity Ashburton (EA) and Unison all sit within this category (there are probably others, but I don’t know enough about them to comment on their operations).

These providers face off against Chorus, a giant in the industry which is being heavily funded by the Government to roll out their national network.

The small players are the incumbents, meaning that they stand to lose when the market changes.

They have been charging clients at rates they deem to be fair when measured against the costs of providing their services, but are now forced to match prices against Chorus who are not subject to the same market conditions, and it is interesting to observe the various ‘game plans’ these local providers have put into play.

EA and Unison for example, have reacted very differently to CityLink and Vector.

These are the key ways that EA and Unison are making sure they continue to be a viable choice:

• As local lines companies both have very strong connections with the community and have deep enough pockets to sponsor local events and projects.

Through a highly visible and parochial approach, they have garnered significant loyalty from their communities.

• Both quickly took the step to introduce a GPON class of service to match that offered by Chorus once they realised they were not going to be awarded a Crown Fibre contract.

Sure, the speeds are sliding off the pace a touch at their current maximum of 100Mbps/50Mbps, but they have expressed a willingness to improve on that and likely won’t be left behind for long.

• Installations are the worst thing about working with Chorus, but are made infinitely easier through EA and Unison.

Both companies show a willingness and ability to fast track orders where required, something Chorus will not do under any circumstances (except medical or civil emergencies).

• Bespoke solutions and a personalised touch. We recently had EA offer to take a router to a client of ours as part of a troubleshooting process.

That sort of support can’t be provided by a heavily regulated behemoth like Chorus.

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