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Enable NetworksHats off to Christchurch local fibre company Enable Networks. The company says it now has 50,000 customers connected to its network. CEO Steve Fuller says that means one in three of those who can get the company’s services are now connected.

Fuller says 24,000 have switched to fibre in the last 12 months. He says: “We’ve connected about 100 customers to fibre every business day – about 50 percent more than we thought we would connect at peak uptake rates”.

Enable now has 6,240 business connections which is an increase of 2,142 in a year. By the time Enable’s network build finishes next year, it will reach around 180,000 premises.

The Canterbury town of Rolleston is Enable’s star performer with a connection rate of around 70 percent.

Enable’s 50,000 connection milestone an achievement by any measure. The fibre build hasn’t been easy for Enable Networks, which was named as the government’s Christchurch UFB partner soon after the 2011 earthquake. At the time, the city was still reeling from after shocks.

broadband

Vodafone is using the promise of a three-day install and lower gigabit prices as a lure to its FibreX network.

FibreX is the new name for the Vodafone HFC (hybrid-fibre coaxial) network that services parts of Wellington, the Kapiti Coast and Christchurch.

A naked unlimited data gigabit plan costs $110 a month on FibreX. That is $30 less than Vodafone’s equivilant plan for a UFB fibre connection.

Customers who have a qualifying Vodafone mobile account will pay $100. All FibreX plans are 24-month contracts.

Gigabit in three days

Consumer director Matt Williams says Vodafone will install customers with an existing cable connection in three days.

He says: “It takes a lot longer than three days to install a UFB fibre connection and there is a waiting list. When a customer signs with us, we’ll have engineers turn up with a modem and they’ll make the connection in three working days. If we don’t we’ll give the customer a $100 credit.”

Vodafone says it spent more than $20 million upgrading the HFC network to gigabit speeds. So far about three-quarters of the network has been upgraded. Vodafone says it will complete the rest by the end of the year.

Docis 3.1

FibreX is one of the first networks in the world to use the new Docis 3.1standard. Australia’s NBNco plans to use the same technology on the Telstra HFC network.

In theory Docsis 3.1 can deliver speeds of up to 10Gbps down and 1Gbps up. For now Vodafone is offering 1Gbps in New Zealand and points out that in practice this means about 950mbps in normal use.

Vodafone technology director Tony Baird says the company worked with Huawei to upgrade the network. He says it uses the GPON2 while the UFB network uses GPON1.

Away with shared bandwidth

In the past Vodafone’s HFC network offered fast headline speeds but much of the capacity was shared. This caused slow-downs at peak times when the network was congested.

Baird says there has been a complete replacement and the network now uses GPON and fibre to feed kerbside cabinets. From there each customer has their own line.

He says there are about 600 cabinets on the network. If there is more demand, the number of cabinets can be expanded.

Customers signing for FibreX will need a new cable modem. Baird says this is the same Huawei device that Vodafone uses for its UFB customers.

Minister calls for better experiences

Williams says the FibreX network is Vodafone’s response to Communications Minster Amy Adams call for service providers to deliver better broadband experiences. He says the fast install is an important part of this and slow installs have been a source of frustration for other fibre customers.

Vodafone passed up on the opportunity to offer FibreX customers broadband services bundled with Sky TV subscriptions. Williams says customers on the FibreX network will be able to buy the same Sky packages as everyone else.

While Vodafone is coy about the number of customers on its HFC network, earlier reports and comments from the company suggest it passes around 145,000 homes. That’s around 11 percent of all New Zealand homes, but more like 15 percent of the UFB footprint. The two networks overlap.

FibreX competes with Chorus, Enable Networks

This means puts FibreX in direct competition with Chorus in Wellington and on the Kapiti Coast and with Enable Networks in Christchurch.

Unlike UFB which has a regulated, fully separated wholesale layer, Vodafone’s FibreX network is vertically integrated. The company does not pay an access fee to Chorus or Enable Networks. This gives Vodafone room to move on price.

It’ll be interesting to see how the new network performs in comparison with UFB fibre. Williams thinks it is a compelling alternative.

When asked if Vodafone will offer both FibreX and gigabit UFB he said the company “will provide whatever the customer wants. But I can’t imagine why you would want the other fibre if you were in the FibreX area”.

Vodafone FibreX press release.

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.”

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”.