GigatownEnable Networks, Northpower Fibre and Ultrafast Fibre plan to launch gigabit wholesale broadband services in October. They say they will offer download speeds of 1Gbps with uploads running at 500Mbps.

Meanwhile Spark New Zealand says it is already testing Enable’s gigabit services in Christchurch. The company had previously asked wholesale fibre companies to roll out gigabit services nationwide.

MyRepublic managing director Vaughan Baker says his company will automatically upgrade its 200Mbps customers in Whangarei, Hamilton, Christchurch to a 1Gbps plan for no extra cost when the service becomes available in October.

The three fibre companies planning a gigabit upgrade have local wholesale monopolies in about one-third of UFB areas. Northpower operates in Whangarei, Enable run the network in and around Christchurch while UFF is the fibre wholesaler for much of the central North Island.

It started in Gigatown

Chorus, which operates fibre networks throughout the rest of New Zealand says it is discussing the matter with its partners. It already offers a gigabit service in Dunedin which won Chorus’ Gigatown competition.

Dunedin has had a mixed gigabit broadband experience. While there’s evidence that some companies are making use of the high speeds, there has also been criticism about getting connected to the service. There is also a debate in the city over whether it has attracted businesses.

Even so, there’s ample evidence consumers want faster broadband speeds. That’s despite there being few residential applications to challenge the 200Mbps services already on offer.

Enable says most of its residential customers are now ordering services with download speeds of 100Mbps or 200Mbps. It says existing fibre users are upgrading to faster speeds.

The company says it plans to work with its retail service providers to launch new services to homes in Christchurch, Rangiora, Kaiapoi, Woodend, Rolleston and Lincoln.

New Zealand hooked on speed

After a slow start, Ultrafast Broadband is gathering momentum and the greatest demand is for the fastest services.

Communications minister Amy Adams says between March and June 2016, 87 percent of new residential connections were for 100Mbps services or higher. And 9 percent of new connections are 200Mbps or above.

She says: “There are already over 3700 active residential 1Gbps services in New Zealand, and I expect to see this grow. LFCs have announced wholesale products. I encourage the industry to collaborate to offer gigabit plans at a retail level on attractive terms.”

Christchurch skyline

Phones connected to Spark’s Central Christchurch mobile site can now download data at 1Gbps. Or, to be more accurate, they will when the hardware arrives in New Zealand later this year.

Spark has worked with Huawei to upgrade its Central Christchurch cell-site to 4.5G. The company’s Hereford Street building houses the Pacific region’s first commercial 4.5G site. It is one of the world’s first non-test 4.5G sites.

At the network launch today, Spark New Zealand managing director Simon Moutter says: “We built the network well ahead of the devices. One of the key things is to learn from this. We’ll build other sites later in the year.”

Gigabit wireless in New Zealand

Spark’s general manager, networks Colin Brown demonstrated the network’s ability to deliver gigabit speeds. He used special equipment for the demonstration. In the live test, download speeds reached 1.12Gbps. Brown said overnight the test gear recorded a peak of 1.25Gbps.

While 1Gbps is the 4.5G headline speed that’s not what most user will see when they connect. Brown says people will see speeds that are; “three of four times what you see today”.

The key to 4.5G speeds is the technology’s ability to use spectrum in different bands at the same time. The telecom industry calls this carrier aggregation. It also uses multiple antennae simultaneously to boost capacity.

With 4.5G data speeds and capacity increase at the same time.

Huawei New Zealand CEO Jason We says beside boosting data speeds, a 4.5G cell site can service ten times as many users as a 4G site.

Using 2300 MHz spectrum

One of the four spectrum bands used to deliver Spark’s 4.5G service is the 2300MHz block once owned by Woosh Wireless. The Commerce Commission cleared Spark to buy the spectrum at the end of March.

Moutter say it took just a matter of weeks to pull the 4.5G demonstration together. He says; “It demonstrates what we had our eyes on and why we were keen to acquire the Woosh spectrum.”

Because 4.5G is, in effect, a software upgrade to the 4G network, Spark could move fast.

Recipe for a 4.5G network

Brown says for a 4.5G roll-out Spark needs four things: “Above all else you need the software. We have this from Huawei and will be rolling out elsewhere between now and Christmas.

“The second thing you need is the antennae. You have to install them at the sites. To make 4.5G work you also need improved backhaul to take data traffic from the cell site to the internet. Generally speaking you need gigabit backhaul. You also need to devices”.

Huawei’s Wu says his company will be bringing 4.5G ready devices to New Zealand later this year.

Joint innovation

Spark’s 4.5G project is the latest fruit from the company’s joint innovation programme with Huawei. Previously the two built the world’s first commercial 4G network using 700 MHz spectrum

At the Christchurch launch David Wei, President Huawei South Pacific, says that earlier partnership pushed the boundaries of technology.

He says: “Today we continue that tradition with New Zealand’s first 4.5G giga site. For us one of the best parts of this partnership is that we are able to deliver technologies which until very recently only existed in our research and development labs.”

Spark and Huawei agree that video will be the big application on the 4.5G network. Wei says: “4.5G can support rich content streaming and true 4K video. It will be used to create a strong network supporting the emerging internet-of-things”.

Video made the radio star

Moutter says for practical 4K streaming video, a network must deliver a consistent 15Mpbs.

Brown says one aspect of 4.5G is the 2300 MHz spectrum can be configured with TDD (time-division duplexing). He says this means the spectrum can be optimised for downloading. This is an arrangement that works well with video traffic.

TDD is also used by a lot of fixed wireless broadband services. The potential for a 4.5G network to deliver fibre-like speeds to fixed wireless broadband customers could change the nature of services in rural New Zealand and present Chorus and the other fibre network companies with a serious challenge.

4.5G means bigger data caps

A network capable of 1Gbps downloads could mean customers will chew through monthly mobile data caps in seconds.

Moutter says: “The additional capacity of the 4.5G network is significant. It allows use to expand usage bundles at economic prices”. In other words: expect to see more generous monthly data allowances from Spark as the new network rolls out nationwide.

He offered insight into the pricing of mobile data saying Skinny’s Wireless Broadband which gives users 60GB of data for $55 would have been impossible just two years ago. The same applies to Spark’s wireless broadband product.

Moutter says: “Spectrum has been the constraining asset. We’ve invested in buying more spectrum. Using aggregation is the key to getting more from our investment”.

Christchurch technology

Moutter says Spark chose to use Christchurch as a demonstration site because it “wanted to do something special for the region.

He says Canterbury area is one of the first to be updated with 700 MHz spectrum services. He says: “We’re close to half-way done with that.

“After the earthquake we had to move the network around in Christchurch. Much of it, indeed much of the city, moved out to the edge. Now we want to focus on bringing technology back to the centre of the city. This was a good opportunity to commit to the rebuild”.

You can see the Spark 4.5 antennae on the top of the Hereford Street building in the photo at the top of the page. 

In March 2014 the New Zealand Herald sent me to Christchurch to write a series of features on the city’s rebuild after two earthquakes. While in town I visited the CCL data centre not far from the centre of town.

CCL or Computer Concepts Limited played an important role for the city during the and immediately after the quakes. Christchurch companies who had the foresight to commit early to cloud computing were among the first to restart following the quakes.

CEO Andrew Allen says one of the advantages he had was the business was deemed an essential service. This meant CCL could get into restricted areas, recover data early and help customers get back on their feet. You can read my interview online, it’s at the bottom of the main story.

At the time I was impressed by CCL. Allen told me in confidence the challenge he faced was that cloud computing was consolidating into ever bigger centres and ever bigger businesses. CCL had few opportunities to make acquisitions and its regional focus limited growth. Allen feared the company might struggle to find the investment needed for further growth.

So it was no surprise to hear that Spark Digital acquired the business earlier this week for NZ$50 million. It’s a good move for both parties.

CCL adds to Spark Digital’s earlier purchases Revera and Appserv. It strengthens Spark Digital’s position in the South Island and brings the company’s total investment in New Zealand cloud businesses to over NZ$150 million.

That may not compare with the money being spent by global cloud players like AWS, Microsoft or Google, but in a local context it is a huge deal.

Spark Digital is building up a head of steam with its cloud offering. One thing separating Spark Digital’s business from other cloud service providers is that it operates both the data network and the data centres. Customers get to deal with a single service provider in both departments and can keep both aspects of their operations in synch.

Enable Networks reports it is connecting about 600 customers a month to the Christchurch fibre network. It has a total of 6,100 customers already connected — making a total uptake of 11 percent across the city. That’s a little better than the national average.

Three Christchurch suburbs now have more than 20 percent of premises connected to the network. Rolleston tops the list with 24 percent connected, Burnside is on 22 and Addington has 20 percent.

These numbers are good. In fact, sign-up rates are improving at a fast clip across the entire country. This underlines the wisdom of extending the UFB network beyond the 75 percent of the population into smaller towns.

Meanwhile, the fibre roll-out is paying off in terms of overall speeds. The latest Akamai State of the Internet report notes New Zealand saw a huge 21 percent quarter-on-quarter rise in average fixed connection speed, taking it up to 6.8Mbps. The year-on-year headline speed is up 47 percent.

New Zealand’s average peak fixed connection speed climbed 31 percent in the quarter to 31.8Mbps. That’s a 52 percent year-on-year increase.

Enable Networks is part of Christchurch City Holdings Limited structure

Enable Networks faces a $64 million cost blowout as it struggles to meet Ultrafast Broadband deadlines.

The blowout shows up in a footnote to the Christchurch City Holdings Limited 2013 annual report. Under the heading Capital Commitments on page 36, the report notes:

As at 30 June 2013 the estimated cost of the UFB network including connections, central office construction and other components of the network, to December 2021 was $401m (2012: $337m).

The costs are against Enable Services Limited, which is contracted to build the network on behalf of Enable Networks.

Christchurch local fibre company

Enable Networks is the Local Fibre Company selected to build the Ultrafast Broadband network in Christchurch, Rolleston and Rangiora.

Christchurch City Networks Limited and Crown Fibre Holdings are partners in the LFC. CCNL is is a subsidiary of Christchurch City Holdings Limited which is wholly-owned by the Christchurch City Council.

Further problems facing Enable show up in the glossy CCHL annual review. Most of the document is written jaunty, spin-doctored prose. However on page 11, it says:

The company’s biggest challenge in the past year has been deploying the network at the required rate against its agreed plan with Enable Networks Ltd and Crown Fibre Holdings Ltd. The civil construction labour market in Christchurch remains very tight – meaning Enable’s contractor, Transfield Services Ltd, has faced enormous challenges up-weighting civil construction resources in a timely manner.

Things don’t look quite so jolly when the subject is dealt with in the annual report.

Page 37 of the CCHL  annual report says Enable Services is currently in dispute over terms and conditions with Transfield Holdings. The two have had a rocky relationship, in November 1012 The Dominion Post reported problems between the two companies which says the pair may have overestimated the amount of existing infrastructure that could be re-used for the UFB project.

At the time of its appointment, Transfield valued the Enable Networks contract at $260 million.

The annual report says:

The Network Infrastructure Project Agreement signed between Enable Services Ltd, Enable Networks Ltd, Crown Fibre Holdings Ltd and CCHL provides that, if Enable Services Ltd fails to achieve any milestone to which liquidated damages (LDs) apply on or before the applicable milestone Date, Enable Networks Ltd will be entitled to claim the LDs applicable to that milestone for each day (or part thereof) that any such milestone is not met.

It is clear that LDs are potentially payable to Enable Networks Ltd, but to date this demand for LDs payment has not been made. Legal advice has confirmed that Transfield Services (NZ) Ltd would likely be subject to a general damages claim regardless of whether or not the LDs provisions in the TSL contract are enforceable. However, the timing and quantum of this would be subject to a legal process.

Enable Networks a CFH partner

Crown Fibre Holdings announced Enable Networks as a partner in May 2011 at the same time as Telecom NZ, now Chorus, was selected as partner for 24 areas including Auckland and Wellington. At the announcement, Enable was described as a special case because of the recent earthquakes in Christchurch. Northpower and Ultrafast Fibre were appointed as LFCs for seven of the 33 candidate areas in December 2010.

In 2011 Crown Fibre Holdings said the Christchurch LFC partnership “is undertaking an initial 10 year spend of around $440M for UFB deployment in Canterbury”.