Government boosts broadband with $270M expansion

There was a surprise bonus when Prime Minister Bill English joined Communications Minister Simon Bridges to announce the RBI2 contracts on Wednesday. The government added enough extra money to plug almost all remaining fast broadband coverage gaps.

There was also cash to speed up the rest of the build. 

As a result, by 2022 all but the most remote New Zealand homes will be able to connect to fast broadband. The fibre network will extend deep into regional New Zealand.

Five years from now, a total of 390 towns will have fibre to the premises. Fibre will reach 87 percent of the population. The rest of the population will get what promises to be one of the best rural networks anywhere in the world.  

Rural Connectivity Group wins RBI2 funds

Spark, Vodafone and 2degrees, operating together as the Rural Connectivity Group won the $150 million earmarked for RBI2 plus an extra $100 million to further extend the network.

The RCG will build 450 more rural cellular towers. Under the RCG plan, the three members will share the tower and the antennae. In effect, the three mobile carriers will operate as MVNOs — mobile virtual network operators. The money will also be used to extend the mobile network coverage along rural highways.

 The government then announced it will spend a further $130 million extending the UFB to a further 190 towns. This will cover about 60,000 more homes and businesses. The network was already on target to reach 200 towns. Chorus will get most of the extra UFB money, with the other fibre companies also extending their reach into the regions.

Another $40 million is set aside for further rural broadband. Of that, $13 million will go to regional wireless internet service providers or wisps, the small operators who service more remote areas.

In total the government announced an additional $270 million of spending, yet that’s not the cost to the taxpayer. The sum is made up of $240 million recycled from earlier stages of the UFB project and $30 million from the Telecommunications Development Levy. Bridges says the announcement brings the total government money spent on broadband to more than $2 billion.

Spark’s Paris warns small business not online as Amazon looms

Jason Paris, who heads Spark's Home, Mobile and Business division says New Zealand small businesses are not adapting fast enough to the online world. 

Paris says 40 percent are still not online and that's dangerous in a world where commerce will soon be dominated by Amazon.com. He warns against complacency. He wants small business owners to get on line and spend more time working with social media. 

Spark is using numbers from the Digital Journey tool which runs on the Spark Lab website and is promoted by the Ministry of Business, Innovation and Employment. 

If anything, the Digital Journey numbers are more optimistic than a similar survey run by accounting software company MYOB which found almost half its small business customers have no digital presence. And many of those who do have no more than a Facebook page. 

Chorus annual profit climbs 24%

 Chorus reported an annual profit up 24 percent on the year earlier. Net profit climbed to $113 million up from $91 million in 2016. Revenue grew three percent to $1.4 billion. Expenses fell 6.7 percent to $388 million. 

 The company says it was helped by a increase in the regulated price of copper connections. In a statement to the NZX it says: "Chorus's financial results for 2017 were underpinned by a strong focus on costs as we streamlined copper provisioning processes and began capitalising labour expenses relating to certain fibre provisioning costs."

During the year Chorus faced increased competition from Spark which has moved customers onto its fixed wireless network cutting Chorus out of the deal. 

 That move helped Spark boost its margins. Earlier in August the company reported a 13 percent increase in profits. In part that was driven by higher margins with 84,000 taking up fixed wireless broadband.  

 Chorus was always going to lose customers as people in non-Chorus fibre areas move from copper to other service providers. Spark's wireless offer increased the decline in connections. During the year copper connections fell 7 percent to 1.6 million and broadband connections were down 3 percent at 1.2 million.

Mobile data competitions bites

Today Spark dropped the price of its all-you-can eat mobile data plan from $130 to $80 a month. The plan includes 22GB of data at full speed, unlimited talk and texts to New Zealand and Australian numbers.

It’s not quite unlimited. After an account uses 22GB, Spark will drop data speeds. The deal also includes Spark’s familiar sweeteners; Lightbox and Spotify. There are conditions: users are not allowed to tether or use phones as hotspots. 

Last week 2degrees introduced plans for mobile data users.  The company sells 10GB of mobile data  for $55 a month and 15GB for $70. The company also has its own $130 unlimited plan. 

Google fault takes out Japan’s net

Much of Japan was without internet for an hour last Friday. It happened at lunchtime when an error on Google’s network meant the search company hijacked traffic on two major telecommunications networks: NTT Communications and KDDI. Google told the Asahi Shimbun newspaper: “We set wrong information for the network and, as a result, problems occurred. Among others the outage took out banks and railway networks as well as disrupting online Nintendo games players.