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You may be right if you think you’re not ready for or don’t need 10Gbps residential broadband. For now, it’s a niche product for a niche market.

Yet it won’t be long before it is mainstream.

Next month, New Zealanders will be able to test the world’s fastest residential broadband. From mid-March, 30 volunteers will get early access to 10Gbps on the Chorus fibre network.

It’s not the world’s first residential 10Gbps service. Singapore already has 10Gbps. Yet Chorus is early to the technology.

Now is the time for 10Gbps

There are good reasons to start testing now.

First, New Zealand’s UFB fibre infrastructure is ready for faster services. That was the plan from the outset. Moving to 10Gbps means new equipment at either end of the fibre. It’s an upgrade.

Second, it’s good to be ahead of the demand curve. When UFB was first dreamed up, planners expected one in five people who could get fibre to take it up by 2020.

Today, roughly half the people who can connect to fibre do. That number is set to increase as we get closer to the Rugby World Cup.

There are reasons why uptake is greater than expected. Netflix and Lightbox are the usual suspects. But that’s immaterial. The point is fibre growth has been well ahead of predicted demand curves. The same could be true for 10Gbps.

Prestige

Another, less tangible, reason to get cracking with 10Gbps is prestige.
New Zealand would be among only a handful of countries to offer the service. It’s a testament to our network and planners that we get there early.

On a more practical level, Chorus managed to announce its service ahead of competitors. It faces a form of competition from ISPs who want to unbundle fibre. Offering a faster 10Gbps service was one way an unbundler might have differentiated. That’s no longer an option.

Likewise, 10Gbps puts clear blue water between UFB fibre and fixed wireless broadband. When 5G arrives, it, in theory, could offer wireless data speeds that match today’s best UFB speeds.

On paper the 5G specification could see 10Gbps fixed wireless services. That is years off. Apart from anything else, it needs more spectrum than is available to cellular companies either now or after the next round of auctions.

Get ready for 10Gbps

A more subtle point is that having 10Gbps now encourages customers to prepare for faster broadband.

As things stand few homes can make full use of the speed. Devices operating at 10Gbps are scarce. The line speed is much faster than home wi-fi networks. You can buy network storage devices that run at 10Gbps, but slower speeds are more common.

Even among the homes that have wired networks, many can’t handle 10Gbps at the moment. The most popular residential Ethernet routers offer 1Gbps.

That’s why Chorus is being picky about who can take part in its test run.
Chorus is looking for 30 volunteers. Candidates need to already have a 1Gbps plan with one of the partner RSPs.

Chorus is a wholesale broadband provider. That means it can only serve 10Gbps broadband through one of its retail partners. Kordia, 2degrees, Trustpower and Stuff Fibre are among the first to sign up. Others will follow.

Test pilots have to live in one of three Chorus exchange areas. That’s Johnsonville in Wellington, Avondale and Birkenhead in Auckland.
Another must-have is a device with a 10Gbps port. Trialists will need to agree to provide feedback on the service.

Big (home) data

The trial is most suitable for people who work with large data files, say movies or high-quality audio. It may also be useful for homes with some high-end gamers or use other demanding applications.

The Chorus 10Gbps trial is a collaborative project. It will use Nokia’s XGS-PON (passive optical network) fibre technology.

Chorus chief customer officer, Ed Hyde says 10Gbps underpins New Zealand’s digital future. He says it will “continue our decade long commitment to innovation and keeping New Zealand’s broadband infrastructure at the cutting edge.”

If the trial is a success, Chorus aims to roll out the service nationwide. You can take that as read. It may not be everywhere this year, but it’s coming.

While Bill Bennett edits The Download magazine and a weekly newsletter for Chorus, this post is an independent opinion.

Rolleston Canterbury New Zealand fibre

In one sense the Commerce Commission’s move to investigate backhaul comes at a time when the sector has never been more competitive. Yet that’s not how everyone see things. There are issues that may need resolving by a regulator.

Although few everyday users hear of it, backhaul is vital part of the telecommunications network. It connects local exchanges and major hubs.

The local loop moves internet traffic from homes and offices via cabinets to local exchanges. Backhaul takes it from these local exchanges to central exchanges. From there, internet service providers take over with their own national networks and international connections.

While backhaul also connects cellular towers to the wider internet for mobile traffic, that doesn’t appear to be part of the investigation.

Fit for purpose

Telecommunications commissioner Stephen Gale says a new inquiry and discussion paper explores whether the current regulatory regime is fit for purpose.

He says: “Backhaul services are a key component of the telecommunications market and critical for ensuring New Zealanders can benefit from access to quality broadband services”.

The Commerce Commission wants responses to its discussion paper by 23 September.

New Zealand backhaul providers include Kordia, Voyager, Vibe and other smaller players.

Last year Chorus has announced plans for a new backhaul service connecting points of interconnect for the Ultrafast Broadband network. In effect, the new Chorus service will connect ISPs operating in regional areas to the main hubs when they don’t have their own circuits.

Critics

Existing industry players criticise these moves saying the new service will undermine their backhaul investment. They argue Crown Fibre Holdings encouraged them to invest in backhaul. Crown Fibre Holdings is the government agency overseeing the UFB network roll out.

Now they see Chorus muscling in on the business. The implication is that they would never have invested in backhaul if they knew Chorus would enter the market.

There is little question Chorus’ entry will change the nature of the market. While a big new player is most likely to increase competition in the short-term, there are long-term implications.

DTS CEO Brandon Ritchie explains the issue from an ISP perspective in Chorus to increase revenue/influence in market shake up.

Chorus backhaul

Ritchie says Chorus is entering the backhaul market because it will allow the network wholesaler to increase the revenue it earns from ISPs. This will help small ISPs, reducing their costs and simplifying relationships. From the Chorus and small ISP point of view, it’s a good move.

Yet, Ritchie points out many ISPs invested in providing their own backhaul services as a way of gaining competitive advantage. Now Chorus plans to offer an alternative, that investment could be wasted.

Of course all of this should have been foreseen when the telecommunications regulations for the UFB era were first established. But that’s easy to say in hindsight.

The UFB deal and regulation backed Chorus into a corner. It can’t be blamed for seeking legitimate ways of expanding its footprint and earning extra revenue. The company has an obligation to shareholders. Meanwhile, the ISPs who invested in backhaul, possibly with CFH encouragement have every reason to feel cheated.

So what looks like an unnecessary investigation into an area where competition seems to be working, turns out to be important after all.

kordia-takes-vodafone-challengeState-owned network business telecommunications specialist Kordia posted a $10.7 million profit on revenues of $309 million for the year to June 2013.  The result reflects the company’s ‘continuing operations’, that is, not taking the Orcon business unit, sold in March, into account.

The 2013 profit represents a rise of of 46 percent when compared to the year earlier. In 2012 Kordia’s profit was $7.3 million on revenues of $306.4 million.

Kordia grew out of the government owned operation originally set up to manage television transmission services. For most of its recent the history the company has been preparing for when the analogue TV network switches off – that is due to happen next year and will have a significant effect on the company.

Kordia ‘well-placed’

Group chairman David Clarke says the company is well placed to deal with the analogue TV network closure. “Over the last several years, Kordia Group has improved its core profitability, increased its dividend, reduced its gearing and is ready for the analogue switch off. Gearing reduced to 36 percent at 30 June 2013, from 46 percent at the half year,” he says.

“With net debt at its lowest level for eight years there continues to be plenty of headroom under our bank facilities and covenants to fund continued growth in the business.  The performance of the on-going business in FY13 together with the divestment of Orcon has strengthened the balance sheet,” Clarke says

New Zealand braces for earnings hit…

The analogue switch off will hit 2014 earnings, yet Clarke says Kordia saw solid revenue growth from its telecommunications products, including the core corporate offering,  managed WAN product OnKor. He says the company will increase the range of its products and services.

Kordia also reports continued strong demand for digital television transmission services and good growth int telecommunications sector.  Clarke says the Kordia Solutions New Zealand business made progress identifying new opportunities both nationally and in the Pacific region.

…while Australia surges

Kordia’s Australian business continues to perform well consolidating the 2012 growth with another year of record revenues. Clarke says the business has driven further into new market segments and expanded its service offering. Significantly 40 percent of the unit’s revenue in 2013 came from services that didn’t exist three years ago.

He says: “The transformation of the business has continued from providing specialist services to becoming a true end-to-end services provider across the entire network deployment value chain.  This capability enables Kordia Solutions Australia to work with its customers seamlessly, enhancing value and reducing cost.”

“This growth was underpinned by the progress of work for APLNG in the energy and natural resources market, civil infrastructure design and construction works for mobile operators, and design work for the Australian National Broadband Network (NBN)”, he says.