Locals in Queenstown on the west coast of Tasmania fear jobs and income will be lost if the NBN is not delivered by fibre to their town.

Key points: Queenstown was scheduled to have NBN connected via fibre

Queenstown was scheduled to have NBN connected via fibre Government announces it will be delivered instead via satellite

Government announces it will be delivered instead via satellite NBN co halts rollout until decision is made

NBN co halts rollout until decision is made Labor promises it will spend $30 million to deliver fibre to region

The remote town was scheduled to be connected via fibre to the node, but that was changed last year to instead be serviced by the new NBN Sky Muster satellite service.

Local business owners said if the NBN was not delivered to them via fibre, their businesses would be affected and they would lose customers and work.

Queenstown has been trying to rebuild its economy since the local mine closed more than two years ago, and jobs have been hard to find.

Many have seen tourism as the industry which could revitalise the town and rebuild the local economy.

One of Labor's election promises has been that it would spend $30 million delivering fibre to the west coast region.

Local Liberal member Brett Whiteley has asked the Government to also opt for fibre, with a decision expected soon.

But until the politicians decide on how the internet should be delivered, the NBN has called a halt to the rollout of its service.

Queenstown has been trying to rebuild its economy since the local mine closed more than two years ago. ( ABC News: Felicity Ogilvie )

Without a fast internet connection business owners like Joy Chappell, who runs a bed and breakfast, said they were worried about their future.

"Everyone expects wi-fi now, and free wi-fi preferably — especially the Asian tourists, that is the first thing they ask when they get here... they generally won't even book accommodation unless wi-fi is available," she said.

Ms Chappell said she would not be able to offer wi-fi to her guests if the NBN was delivered via satellite.

"The biggest problem with the satellite is you're restricted as to the amount of access you have, so once you've used your monthly data there is no more," she said.

"So I won't be able to allow my guests to use wi-fi at all because I can't take the risk of them using it all and me being left with no wi-fi for the rest of the month and not being able to run my business."

Alex Williams' EFTPOS machine often stops working, causing her to lose business. ( ABC News: Felicity Ogilvie )

Hairdresser Alex Williams said the slow internet was frustrating because it often affected her EFTPOS terminal, causing it to stop working at times.

"You often lose business because people just use their cash and don't buy other products," she said.

"We would also like to have a cloud based booking system and to do that we would have to have strong internet as well."

Mathew Faulkner said he uses an ADSL 2 internet connection to make phone calls for his work as a market researcher for computer companies.

Mr Faulkner says he will not be able to use the NBN if the decision is for it to be delivered via satellite. ( ABC News: Felicity Ogilvie )

Mr Faulkner has been living in Queenstown for 18 months, lured from New South Wales by the quiet lifestyle and the promise of high speed internet.

But he said he would not be able to use the NBN if the decision is for it to be delivered via satellite.

"Part of my work involves voice over IP, which is an internet telephone, [and] there are no voice over IP programs that will work over satellite, so basically I would not be able to do my job," Mr Faulkner said.