Starlink takes rural broadband market by storm in NZ
Satellite broadband services are growing fast in New Zealand, accounting for 14% of rural connections last year, according to a new regulatory report.
August 15, 2024
![](https://eu-images.contentstack.com/v3/assets/blt3d4d54955bda84c0/blt35a2d38bd21bf82e/6595564ae01e82040a245baa/Starlink.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
Elon Musk's Starlink is in the driving seat at present, but with new competition expected in the near term, we could well see connections rise even further as prices come down.
Copper connections still make up over a third of rural broadband services in New Zealand, but 18% of those switched to an alternative in the last year, with many going to LEO satellite, the country's Commerce Commission noted in its latest Annual Telecommunications Monitoring Report, published on Thursday. It's worth pointing out that the data in the report refers to the 12 months to the end of June 2023, so it's not as fresh as it might be, but it still paints an interesting picture of the market.
Satellite was the fastest growing technology during that period, with nationwide connections – although we can surmise the vast majority are in rural areas – rising to 37,000, up from 12,000 the previous year. Those figures, driven by the entry of Starlink into the market, mean that New Zealand can claim to have the highest number of satellite connections per capita in the OECD.
"It's exciting to see competition heating up as Starlink – using its Low Earth Orbit satellite technology – disrupts the rural market and forces a response from existing providers," said Telecommunications Commissioner Tristan Gilbertson, in comments accompanying the report.
"Starlink is delivering speeds three times faster than other rural alternatives and consumers are voting with their feet – making Starlink the fastest growing rural broadband provider," he said.
Incidentally, Gilbertson may have undersold Starlink there. The report itself claims that based on download speeds, Starlink is more than four times faster than the next best alternative in rural areas; it clocked up 184 Mbps, while rural 4G-based cellular fixed wireless access (FWA) came in at 45 Mbps.
Those high speeds come at a cost though. Starlink's Standard residential plan is priced at NZ$159 per month, with a hefty set-up cost of NZ$1,040 for the required kit. Satellite in general takes up the highest percentage of average household income in rural areas at between 1.68% and 2.81%.
By contrast, 4G-based FWA prices range from NZ$96 to NZ$200 per month, which is still pretty costly at the top end, but provides consumers with cheaper options too. However, customers in urban areas have access to very similar plans at cheaper rates, and are less likely to be subjected to a data cap, so rural consumers are still getting a raw deal.
The Commission has just launched an interactive map to help consumers and businesses see what is available to them, which it believes will help rural customers in particular to stay abreast of market developments and the options – including prices – they have at their disposal. Greater market competition will help too.
"We're expecting new entrants in this space next year – including Amazon – which is likely to further intensify competitive dynamics," Gilbertson said. "Starlink is already trying to get ahead of this by offering a 'deprioritised' service that, so far, seems to deliver speeds close to its standard service for a lower price."
That being the case, next year's report, or perhaps those thereafter given the data timelag, should make for interesting reading.
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