Telecom business Chorus has just switched on the first of eight new fibre optic cabinets which it says will improve broadband speeds there.
The upgrade is part of a $500 million push to boost the entire broadband network.
Another 78 cabinets are being installed in urban Dunedin.
Chorus fibre-to-the-node programme manager Ed Beattie said the cabinets contained broadband equipment previously housed in the upgraded telephone exchange.
Bringing them closer to customers would improve broadband speed, as speeds slowed over distance.
Estimates suggested speeds of at least 10Mbps were possible, he said.
The first new cabinet was installed on Gladstone Rd and would improve broadband to about 220 customers in the immediate area, he said.
The upgrade should be finished by the end of the year, but the programme that started in Dunedin in July 2008 would continue until the end of next year.
Mr Beattie said Chorus added 76km of fibre to the 523km already in the Dunedin network.
More than 11,000 customers were connected to the fibre-fed cabinets.
About half the homes connected to the cabinets would be within 5km of the fibre optic network, and 90% would be within 1km, he said.
Customers close to telephone exchanges would continue to receive service directly from the broadband equipment at the exchange.
The nationwide programme should enable broadband speeds of at least 10Mbps for 80% of New Zealanders by the end of next year, Mr Beattie said.
