Rural connectivity comes out of the wilderness

New Zealand now has the highest per capita satellite broadband adoption in the OECD, with 1.3 subscriptions per 100 inhabitants as of late 2024.

This surge, driven by Starlink’s rapid expansion, signals a fundamental shift in how rural communities access connectivity.

According to the Commerce Commission’s 2025 Telecommunications Monitoring Report, satellite connections nationally rose from 56,000 to 85,000 in the year to June 2025, with Starlink capturing 27% of the rural broadband market (up from 19%).

Around 72,000 of those connections are rural.

Telecommunications Commissioner Tristan Gilbertson calls it the biggest reset for rural connectivity in generations.

“In rural areas, change is occurring more rapidly. A growing mix of fixed wireless access (FWA) and satellite technologies are reshaping the connectivity options available to rural consumers,” he says.

Low Earth Orbit (LEO) satellite services, led by Starlink, are providing a step-change in performance for many households previously reliant on slower legacy options.

“Starlink has captured 27 percent of rural broadband connections, making it the largest rural broadband provider in the country. Much of that growth has come from consumers moving away from legacy copper services.”

Performance data supports the appeal.

Starlink’s Residential plans delivered average peak-time download speeds of around 226Mbps, roughly four times faster than 4G FWA.

The shift isn’t uniform, however.

Gilbertson says while satellite is driving competition, local providers are holding ground.

Just over half of rural customers coming off copper are choosing Starlink, but 46% are sticking with local providers, and local regional providers (WISPs) are in aggregate gaining more customers than they’re losing.

This mix of technologies is creating a more dynamic market.

“The result is not a market converging on a single solution, but consumers making different choices based on different priorities.”

Rural households still pay around $13 more per month for broadband than urban counterparts. Overall consumer satisfaction lags benchmarks.

Looking ahead, Gilbertson sees continued evolution.

The expected entry of Amazon’s LEO service and other providers should intensify competition.

“The disruption created by LEO satellite is real. But the evidence so far suggests that competition is becoming stronger, technologies are becoming more diverse, and consumers have more choices than ever before.”

One of those celebrating the change is Bevan McKnight, lessee of Northburn Station in the Dunstan Mountains, Central Otago.

Running 200 Angus cattle and 11,000 Merino sheep on 13,000 hectares, he says direct-to-satellite technology on Halter collars will unlock unconstrained grazing.

“Virtually fencing our extensive station using Halter will be a gamechanger for land utilisation.

“For the first time, we’ll be able to graze large blocks of land that have never been touched by our cattle, because we had no way of managing them there.

“To do that before this satellite solution would have required 25 towers, so this new practical option makes Halter a no-brainer for us.”

Halter launched direct-to-satellite technology for smart collars for beef cattle earlier in autumn, leveraging Starlink’ capability through One NZ Satellite.

By mid July, 500 New Zealand beef farms had joined Halter, with 185 on the new beef service.

The company described the move as a world-first in virtual fencing, unlocking benefits for beef farmers previously left out by poor connectivity in regions like Central Otago, Gisborne and Southland’s hill country.

Internal modelling estimates direct-to-satellite capability will expand access to Halter for New Zealand beef farms by at least 20%.

A 2022 New Zealand Institute of Economic Research study estimated $16.5 billion in economic benefits over 10 years from closing the rural digital divide through high-capacity broadband.

It calculated rural businesses would save $344 million a year in time alone, and gain at least $189.5 million a year in productivity.

Incremental benefits for rural households, like improved access to services, education, healthcare and online commerce, were estimated at $1.79 billion a year.