Fairfax Media's move into the ultrafast broadband (UFB) market could be a feast or famine for the company, a media commentator says.

Fairfax Media-owned news website Stuff is launching an internet provider that will compete with Spark, Vodafone and dozens of smaller providers.

The service, Stuff Fibre, is majority-owned by Fairfax Media and expects to launch within three months.

RNZ Media commentator, Gavin Ellis talks to Kathryn Ryan about Fairfax's fibre announcement.

Media commentator Gavin Ellis told RNZ that UFB was an interesting market because, despite 1.5 million people having access to the technology, the uptake was only about 240,000.

READ MORE: Stuff Fibre a risk worth taking

UFB was either a rich market ready to be exploited or it would be a hard job getting people to sign up, he said.

FAIRFAX NZ Fairfax Media confidentially advised the Commerce Commission about Stuff Fibre when it applied to merge with rival NZME, says Fairfax NZ boss Simon Tong.

"The media market in New Zealand is full of surprises and this came out of the blue," Ellis said.

Stuff Fibre will offer uncapped UFB with a 100 megabit download speed and Auckland-based customer support.

The other shareholders are five executives previously employed by Vodafone or Sky TV.

Stuff Fibre will not offer copper-based broadband or serve businesses, instead targeting the 80 per cent to 90 per cent of homes that are slated to get fibre-optic, (UFB).

Fairfax NZ chief executive Simon Tong said pricing would be "competitive" and Stuff Fibre would aim to stand out through customer service and by providing high-quality broadband routers.

Stuff Fibre managing director Sam Morse said parents would be able to filter out "unsavoury" internet content and reduce exposure to social media by changing account settings.

Safety had become a bigger issue as children connected to home networks using more devices, he said.

"We are giving homeowners the ability to put themselves in control of the content that goes into their homes."

Telecommunications Users Association chief executive Craig Young said Stuff Fibre had a good chance of being successful as UFB retailers competed on a level-playing field and Stuff had a strong brand.

The lobby group had an issue with content providers getting into the internet access market if they planned to advantage their own content, but Young said that did not appear to be Fairfax's goal.

Tuanz had "no current concerns" but would keep a watching brief, he said.

Spark, Vodafone and Australian-owned company Vocus provide 92 per cent of the country's broadband connections, according to the Commerce Commission. But the UFB market has been more evenly contested between 90 suppliers.

Only 240,000 of the 1.5 million homes and businesses that are currently scheduled to get UFB have upgraded to fibre so far, leaving the bulk of the market up for grabs.

Tong would not forecast how big Stuff Fibre might become or reveal how many customers it needed to break even.

Fairfax was "not getting carried away with the size of the opportunity", but it had surveyed people's willingness to buy from Fairfax and "tech" was an opportunity that stood out, he said.

"We have got to find some other ways to generate revenues that are not tied to advertising. This is the first real one of significance outside of 'events' that we have decided to have a crack at."

Stuff Fibre could leverage Fairfax' "huge audience" to promote itself, he said. "Advertising with us works, we know that."

Fairfax NZ's decision to branch out into the broadband market comes as the country's competition watchdog examines its proposed merger with rival publisher NZME, owner of The New Zealand Herald.

Tong said NZME had been told about Stuff Fibre and Fairfax had also confidentially advised the Commerce Commission when it sought approval for the merger in May.

He was not expecting complications. "This is a startup business, so I think it's pro-competition."

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