Business demand for #Gignation UFB low

I travelled around NZ last week, meeting with clients and channel partners. At each meeting I tried to gauge the level of interest these businesses have in the new Gbps/500Mbps BS2a UFB service from Chorus, and the answer seems to be, “not much.”

The business owners are typically keen to have it at their home, mostly for novelty value, but see little value in paying an extra $30 p/month for it (DTS rates) if they are already on 200Mbps/200Mbps BS2a UFB fibre.

This clearly isn’t a scientific study, and I don’t want to sound like Donald Trump (“trust me, I hear things, people tell me…”) but the UFB inquiries this month are just like those last month, namely asking for 100/100 or 200/200 speeds.

Unfortunately, this lack of demand isn’t a good thing. The cost of upgrading the network to cope with the potential increase in data volumes has no chance of being earned back if the demand for the service doesn’t eventuate. But, the ability to provide the service on an equal or better footing than the competition needs to exist regardless of initial demand.

This is likely to lead to some promotions being run to drive up demand.

The lack of demand essentially comes down to two things:

1. Clients aren’t maxing out existing 200Mbps services, and no near term technology will change that.
2. No one likes spending money without good reason. The new service is slightly more expensive, and given point 1, no justification for the spend exists.

What are we supposed to call this thing anyway?

Some decision makers in the industry are not keen on advertising this service with “Gbps” in the title as it is widely known that download speed can’t be reached. The concern, one which I share, is that advertising a speed that can’t be attained is a great way to have a Consumer Guarantees Act complaint lodged against you.

Others are more comfortable with the idea given they see Gbps as more of a service category rather than a description of speed that should be expected.

Chorus for their part had previously referred to a BS3 service of theirs with Gbps access speeds as “Business Max”, but are widely referring to the new BS2a service as #Gignation.

At this stage DTS has advertised the service based on its access speed, and we are being careful to make clear in all documentation that the service speeds are best effort. My gut feel is that we should change the title to “Max/500Mbps”, but ideally we should have an industry standard so that one ISP isn’t seen as providing better speeds or a guarantee of some sort because it keeps “Gbps” in the title, or because consumers don’t understand the term “Max”.

Brendan Ritchie