Bill Bennett


Tag: rural

Final UFB leg secures West Coast network resilience

Chorus subcontractors finished the last stage of a 250km network extension to secure West Coast telecommunications.Chorus subcontractors finished the last stage of a 250km network extension to secure West Coast telecommunications.

Final UFB leg secures West Coast network resilience

A 250km fibre connection between Fox Glacier and Haast completes the project giving the West Coast modern and resilient communications.

Until now the region has depended on two lines. One runs along State Highway 6 from Nelson to Greymouth. The other connects Greymouth to Christchurch through Arthur’s Pass crossing the Alpine Fault seismic zone.

This arrangement left the West Coast vulnerable to communications outages during severe weather.

To Lake Hawea and the world

The connection between Fox Glacier and Haast and then on to Lake Hawea provides an additional route to the rest of the world.

Chorus GM, Customer and Network Operations Andrew Carroll says the connection gives West Coasters an additional layer of protection.

Crown Infrastructure Partners provided government funding for the project. The work was handled by Ventia and Electronet, two Chorus subcontractors and the Rural Connectivity Group played a significant role.

Communications minister David Clark says the UFB extension was financed through the Provincial Growth Fund.

West Coast connectivity

He says: “On the West Coast alone, the population with access to UFB has surged from 23 percent to 71 percent since 2017”.

On top of the connection, the new connection brings fibre to the small West Coast community at Haast. Around 90 homes there will now be able to order a fibre connection.

Carroll says: “Making fibre available to residents in Haast was a uniquely Kiwi initiative; it sees residents in one of the remotest towns in New Zealand having access to one of the fastest broadband technologies available.”

The new fibre has allowed the Rural Connectivity Group to add 16 further cell towers in the area. These add to the 26 cell towers operational on the West Coast. They mean residents will have 4G mobile services while 130km of remote state highways will have coverage.

Vocus and 2degrees get OIO nod

Vocus NZ and 2degrees welcome today’s statement from the Overseas Investment Office, providing consent for the acquisition of 2degrees, which will enable the merger of the two businesses.

Mark Callander, Vocus NZ CEO and named CEO of the merged business says, “We welcome OIO consent, which concludes the regulatory approvals for the transaction and will allow us to proceed with the merger of Vocus NZ and 2degrees. We expect the transaction to be finalised in the coming weeks and will come together as a combined business as 2degrees on June 1.”

Trustpower sale to Mercury now unconditional

Mercury NZ told the NZX its NZ$467 acquisition of Trustpower’s retail business is now unconditional.

The move sees the energy company move to become a second tier telecommunications retailer and New Zealand’s largest multiple service utilities business.

The remainder of Trustpower has been renamed as Manawa Energy and says it will focus on renewable energy.

While Trustpower was a minnow compared with Spark, Vodafone and the recently merged 2degrees-Orcon business, it was the next largest fixed-line broadband retailer with a six percent market share.

It recently added fixed-wireless broadband to its product offering.

Combined with Mercury’s customers this moves up to 7.8 percent. Spark is on around 40 percent, while Vodafone and 2degrees are each on roughly 20 percent. The top five account for more than 85 percent of all broadband customers.

Trustpower was a Spark mobile reseller. The company’s mobile phone business barely registers in market share terms and Mercury did not formerly have any business in this space. The deal is unlikely to move the dial unless there is significant change in the Mobile Virtual Network Operator (MVNO) sector.

Influential player

Despite being small, Trustpower was influential. It pioneered the strategy of cross-selling power and telecommunications. That meant it found a way to reduce customer churn. That’s something other retail broadband service providers continue to struggle with.

Vocus followed Trustpower’s lead when it acquired power retailer Switch Utilities Ltd in 2016. This move meant it could sell similar power-broadband bundles. The company says this has proved popular with customers. Today the business is branded as Vocus Energy although that may change after the merger between Vocus-Orcon and 2degrees.

In September, the Commerce Commission waved through the acquisition saying it was satisfied the deal was “unlikely to substantially lessen competition in any New Zealand market.” The consideration is based on the two companies’ position in the electricity market. The Commerce Commission official statement, barely mentions the telecommunications aspect of the acquisition.

Telcowatch: NZ mobile market stable

Telcowatch’s quarterly market share report shows there was little movement between New Zealand’s mobile phone carriers in the first quarter of 2022.

Spark remains the largest mobile carrier with a 36 percent market share under its own brand and a further 7 percent for its cut-price Skinny subsidiary. The total is 43 percent.

Vodafone is second on 25 percent with 2degrees bringing up the rear with a 23 percent market share. Movement between the brands was minimal during the quarter with 2degrees dropping half a percent of market share.

Phone shipments tumble 9 percent in first quarter 2022

IDC reports worldwide phone shipments tumbled 8.9 percent in the first quarter of 2022 when compared with 2021.

Rival analyst company Counterpoint Research puts the 2022 q1 fall at seven percent to 328 million units. IDC puts the total sale at 314 million units. This is behind IDC’s earlier forecast.

There’s a closer look at 2022 first quarter phone shipments on the main blog site.

New Zealand signs Declaration for the future of the Internet

New Zealand joined the United States, every European Union nation, Australia and 31 other countries to sign a wide-ranging Declaration for the Future of the Internet.

It lays out a set of priorities for an “open, free, global, interoperable, reliable and secure internet”. The document includes lofty ideas such as affordability, net neutrality and dealing with illegal content while not getting in the way of free expression. There are few details on how the signatories will achieve any of this, but the concept sounds good.

All this comes at a time when countries like China and Russia are clamping down on the freedoms outlined in the declaration. And significantly it contradicts Ukrainian demands to have Russia cut off from the wider internet.

Apologies to anyone upset by the non-appearance of last week’s The Download newsletter. I caught Covid and was out of action for a few days.

In other news… At Reseller News Rob O’Neill covers research from Spark’s CCL operation on New Zealand companies’ cloud investment plans. Half the companies surveyed by CCL say they intend to invest more in cloud services next year.

The Overseas Investment Office has given Amazon Web Services the go-ahead to proceed with its plans for an AWS region in New Zealand. The project will involve multiple data centres which Amazon says will means spending NZ$7.5 billion.

Seeby Woodhouse’s Voyager Internet is working on a 100 gigabit network upgrade. It should be complete in November. A blog post on the Voyager website says the upgrade means the ISP can offer customers 10G services, L2 Ethernet and national backhaul.

2degrees is working with Microsoft and Umbrellar on its Cloud Navigator portal. The service gives customers self-service control over managing abut being Microsoft licences and products.

A report in the Wall Street Journal says the NFT market is “collapsing”. Average sales of NFTs are down 92 percent from their peak in September and the number of active wallets, which indicate people trading in NFTs, is down 88 percent. “Collapse” could be too strong a word, but it looks like reality is intruding on the market.

Engineers at CableLabs demonstrated 8Gbps downloads and 5Gbps uploads on an HFC network using a DOCSIS 4.0 modem. In theory the technology could be used to revive Vodafone’s UFC Broadband.

Peter Berghaus New Zealand (PB Traffic), is using Internet of Things (IoT) technology from Pollin8 and Thinxtra to maintain road safety and optimise traffic flow at infrastructure development sites. The company uses the technology to keep track of its temporary traffic lights.

Mobile shines for Spark, tower division planned

This week saw a buoyant set of first half results from Spark, Chorus and Sky. Spark plans TowerCo spin-off.

Mobile shines for Spark, tower division planned

Spark reported a five percent lift in revenue to $1.9 billion as it turned in a strong set of figures for the first half of the 2022 year.

At $179 million, after tax profit is up 22 percent on the previous year.

The company announced plans to establish a separate TowerCo business unit to manage its 1500 mobile towers. This will allow it to attach fresh third-party capital.

Vodafone has previously talked of similar tower spin-off plans. Both companies now see the passive network infrastructure as not providing a competitive advantage.

Mobile service revenue was up five percent while broadband revenue fell 3.9 percent. The company maintained its gross broadband margin as it switched customers from fixed-line to fixed-wireless internet.

Spark says it plans to introduce further competitive wireless broadband offers in the second half of the year.

Cloud, security and service management revenues grew 3.2 percent. Spark says this growth was fuelled by demand for public cloud and growth in the health sector.

IoT connections surged 31 percent during the half year to 623,000.

Spark confirmed its Ebitda guidance range for the 2022 financial year at $1.13 to $1.16 billion and says it expects to come in at the top end of this range.

CEO Jolie Hodson says: “Despite closed borders keeping roaming revenues suppressed, we delivered a market-leading mobile performance, underpinned by precision marketing and increasing customer demand for data, with 48 percent growth in our Endless plans year-on-year.”

Chorus ups guidance as UFB near completion

Chorus reported a first half net profit of $42 million, up from $27 million in the same period in 2021.

Ebitda increased 5.5 percent to $347 million on a 1.3 revenue increase to $483 million.

Chorus says it aims to pay 35 cents per share this year and a minimum of 40 cents next year. In 2024 the planned payout rises to 45 cents. An interim payout of 14 cents per share is set for April.

The company says it will buy back up to $150 million shares over the next year.

Chorus CEO JB Rousselot says the government supported Ultrafast Broadband network build is nearing completion.

“Our fibre rollout is now close to completion with just 30,000 or so premises left to pass.More than 1.3 million homes and businesses have fibre at their doorstep; of these 67 percent have now chosen to connect.”

Fibre connections grew 47,000 in the first half of the year. They now total 918,000. Rousselot says Chorus is on track to meet its goal of a million connections by the end of the year.

A highlight of the year for Chorus was its move to boost basic fibre speeds to 300mbps. This has helped lift New Zealand up the world broadband speed rankings. It now ranks 11 in the world for fixed line broadband speeds.

Sky resumes dividend payment

Sky reported a first half net profit of $28.3 million, down from $39.6 million a year ago. Revenue was up four percent at $371.7 million with the company’s streaming revenue up 34 percent year on year. The company says it will return to paying a shareholder dividend from this year after putting payments on hold.

$47 million earmarked for rural broadband upgrades

Crown Infrastructure Partners has signed contracts with private sector contractors to work on a series of rural broadband upgrades.

The Rural Capacity Upgrade includes new towers in rural areas where there is poor wireless broadband performance. In other places existing towers will be upgraded. There are plans to extend fibre and VDSL coverage in places.

David Clark, the communications minister, says 47,000 rural households and businesses can expect faster internet speeds and better reception by the end of 2024.

Money for the upgrade comes from the government’s Covid response and recovery fund.

Clark says: “The Covid-19 pandemic has shown us reliable internet is critical to being able to work, learn and socialise from our homes. Having been through lockdowns, it’s clear some rural networks had real trouble adapting to the extra usage.”

Vodafone expands FiberSense monitoring pilot

Vodafone says it will expand its real time underground fibre cable monitoring trial. The trial uses FiberSense monitoring technology to check on more than 100km of fibre in the company’s central Wellington optical network. It looks for threats to the network from earthquakes and from civil works, water or gas leaks among other risks.

Improving Measuring Broadband New Zealand programme

Telecommunications commissioner Tristan Gilbertson says there are opportunities to improve the Measuring Broadband New Zealand programme and wants industry feedback on the ideas.

One option is to include more technologies, providers and plans in the coverage. This may include satellite broadband. Another is to include monitoring of in-home Wi-fi performance.

Submissions to the Commerce Commission close 16 March 2022.

Tuanz CEO Craig Young says the Measuring Broadband reports are important because the industry has used confusion as a marketing tactic. Being able to make better comparisons between providers changes that.

InternetNZ concerned about social media harm

In an opinion column published by Stuff, InternetNZ chief executive Jordan Carter warns of the dangers of a social media monopoly.

Carter quotes InternetNZ research which shows almost four out of five New Zealanders use one of the services operated by Meta each day. Meta is the new name for the Facebook organisation.

This, he says, means there is, in effect, a social media monopoly and that it is causing an ever increasing amount of harm. In particular he notes the negative impact of misinformation.

Tonga reconnects submarine cable

It took two weeks for engineers to restore the single submarine cable connecting Tonga to international networks. The international cable and the domestic cables connecting the nation’s islands were cut by the violent January volcanic eruption. While the external link is working again, connections between islands remain broken. Reports from Tonga say wireless communications are struggling to provide adequate coverage while the islands wait for cable repairs to complete.

In other news

CommsDay reports Singapore-based MyRepublic plans to launch mobile services in New Zealand.

The University of Waikato, Kordia and ASB have set up Scott Bartlett Memorial Scholarship to give financial support to final year students studying business management and the sciences. Each year three students will get the $4000 award. Former Kordia CEO Scott Bartlett died in 2020.


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Rural fixed wireless costs three times urban price

Spark charges unlucky rural customers almost three times as much as city dwellers for fixed wireless broadband.

The banner price for Spark’s Everyday Wireless plan is $60 a month. For that you 4G fixed wireless broadband and unlimited data. There are contracts, but you can get an open term deal meaning you can go elsewhere when you choose without a penalty.

Meanwhile Spark’s Naked Rural Wireless plan costs $176 a month if you use an antenna and $166 if you don’t.

Naked Rural Wireless is built on the same 4G technology as the Everyday Wireless plan.

Rural fixed wireless data caps

There is a data cap of 300GB. If you want more data, that costs a dollar per gigabyte.

To get Naked Rural Wireless you have to sign for a 24 month contract. If you want to leave before the contract finishes there is a $350 early termination fee.

Vodafone has a $65 a month unlimited 4G wireless broadband plan for urban customers. It sells rural plans through its Farmside subsidiary. A rural plan with a 200GB data cap costs $166 a month. Extra data is $20 for 15GB.

Broadband competition

In the cities and towns, Spark and Vodafone sell fixed wireless broadband in direct competition with fibre and copper based broadband services.

While there can be competition in rural areas, that isn’t always the case. In effect there are places where Spark and Vodafone have a local broadband monopoly.

To be fair. It costs more to provide telecommunications services to rural areas. There is more low-hanging fruit in urban areas.

Yet it doesn’t cost three times as much to service a rural customer. In many cases a government subsidy helped pay to build rural towers.

Wireless Internet Service Providers

Wireless Internet Service Providers or Wisps offer rural services in competition with Spark and Vodafone-Farmside.

They tend to be small, regional players. This makes it hard to compare their prices directly with Spark and Vodafone-Farmside,

Yet in places, they can offer a similar fixed wireless product at a lower cost.

At the time of writing Taranaki-based Primo has a $99 rural wireless plan with 250GB. The company’s unlimited plan is $149.

Filling the rural broadband coverage gaps

Wisps, do a great job filling in the rural broadband coverage gaps. Anecdotally they are more popular with customers than the large telcos and are more flexible.

Prices for fixed line telecommunications services are the same throughout New Zealand. This applies to the UFB fibre network and the copper phone network.

The idea that everyone pays the same is part of the Telecommunications Act. In legal terms it is known as non-discrimination.

Another idea that’s important is known as equivalence.

Can’t play favourites

In plain English non-discrimination and equivalence mean network operators can’t play favourites. They can’t favour partners or wholesale customers, even if they are part of the same business.

Chorus has to give equivalence and non-discrimination undertakings to the Crown on its copper network. All the fibre companies do the same on the UFB network.

There are similar undertakings for the Rural Broadband Initiative covering Chorus, Vodafone and the Rural Connectivity Group. There are no undertakings for Wisps.

In effect, Vodafone can’t charge other telcos more to use its rural towers than it charges its own retail business. This should encourage competition.

Fierce competition in towns

As things stand in early 2022, the competition for urban broadband is intense. Prices are stripped back, margins are lower and customers get great deals.

Out of town the competition can be less intense. In many rural places there is a limited range of options, if any. And customers can need to join a waiting list to get a connection.

Fresh competition from low earth orbit satellites like Starlink will give the market a shake. We’re not seeing that make a huge impact yet. Give it time.

Government could give many rural customers better broadband options by extending the fibre footprint. Soon New Zealand’s UFB fibre network will reach 87 percent of the population. Realistically the fibre footprint could extend further, say to 92 percent or more.

It will cost money, but it would be a powerful nation-building investment. We managed to foot the bill building a New Zealand-wide copper network when there was far less money around.

Yet, for now, unlucky rural fixed wireless broadband customer have to pay three times as much, can consume less data and face stiffer contracts than their urban cousins. We can fix this.

Unlimited rural fixed wireless broadband trial

Vodafone is running an unlimited rural fixed wireless broadband trial.

Farmside is offering the trial. The rural broadband specialist has been a wholly owned Vodafone subsidiary since 2018.

Capacity constraints mean Vodafone has to limit the trial to customers in areas covered by the second stage of the government sponsored RBI programme.

It will run for three months. Customers will pay $80 a month. There is a fair use policy, which means Vodafone may restrict users who abuse the unlimited data offer.

Wholesale operators to get same deal

Wisps (wireless internet service providers) who buy wholesale services from Vodafone can offer unlimited rural fixed wireless broadband deals to their customers.

Farmside trialled unlimited data options last year. These ran from midnight to noon.

Trials aside, rural wireless broadband customers have had to live with data caps until now. This is in contrast with New Zealand’s urban broadband customers. The majority of fibre customers buy unlimited data plans.

Unlimited rural fixed wireless broadband needs capacity

Service providers like Vodafone use data caps to manage demand and reduce congestion on wireless broadband networks. Because users share bandwidth, performance can drop if many attempt to connect at the same time.

Vodafone acting consumer and SME director Ralph Brayham says there is spare capacity on a number of the recently build RBI2 cell sites.

Not everyone will be able to get the unlimited data option. Brayham says Vodafone will contact the households where it is possible. He says: “We’ll then assess whether we can offer unlimited RBI2 data plans longer-term.”

Rural Broadband Initiative part 2

RBI2 is a $150 million program to provide better broadband. When complete it will reach84,000 rural homes and businesses not covered by the first stage of RBI.

The work is being done by The Rural Connectivity Group.

This is a joint venture between Spark, Vodafone and 2degrees.

At the time of writing the RCG has built 250 mobile towers. By the end of 2022 this will be 400 towers.

While Vodafone’s uncapped trial is welcome, the biggest problem facing rural fixed wireless broadband customers is poor performance when there is no line-of-sight to a RBI1 tower.

Rural mobile closing the gap thanks to RCG

New Zealand’s rural mobile users face slower download speeds than people in towns. In almost every case the rural mobile experience is worse.

Although the gap between rural and urban has closed, it could open again as carriers roll out 5G networks.

Opensignal’s May 2021 mobile network experience report puts the improvement down to government-led initiatives.

Both the updates to the Rural Broadband Initiative and the Mobile Black Spot Fund have played a role.

Rural Connectivity Group kudos

Above all, credit must go to the Rural Connectivity Group. This is a joint venture between Spark, Vodafone and 2degrees set up to deliver rural network upgrades.

The three companies had government funding and invested their own money to build additional cell sites in areas needing extra coverage.

To date there have been 200 new RCG towers. Eventually there will be more than 500. If it seems like only yesterday there were 100 RCG towers, that’s because it happened less than a year ago.

RCG carriers share spectrum and resources. The towers are open access, other carriers can use them.

RCG delivering

Opensignal’s analysis shows the programme is already delivering results. There is more to come as further towers are added to the network.

To measure mobile network performance Opensignal collects data from handsets. The business is UK-based and produces similar research in a number of countries.

UK-based Opensignal says the gap between rural and urban mobile experiences is closing.

In its May 2021 report Opensignal says while disparities between rural and urban mobile remain rural mobile is improving.

Time connected to 4G

It reached this conclusion by looking at the proportion of time users spend connected to 4G networks.

In recent months this figure has increased at a faster rate for rural users than those in urban areas. Although rural comes from a far lower base, it is catching up.

Opensignal takes a competitive view of performance. It also zooms in on applications like video and mobile gaming. Yet the interesting angle is how the urban – rural mobile gap is closing.

It ranks the three carriers against each other. If you’re wondering about Skinny, that’s a Spark brand with customers using the Spark network.

2degrees shows the greatest improvement, Vodafone the least.

Customers on the Vodafone network saw the gap between urban and rural time on 4G networks fall 4.8 percent. For Spark users the drop was 5.8 percent. At 2degrees it fell 7 percent.

Closing the gap

Opensignal says before the Covid lockdown 4G availability for rural users was close to 25 percent behind urban levels. Now it sits at around 17 to 18 percent behind.

The report goes on to compare the mobile experience with different types of use. It says only 2degrees urban customers enjoy an excellent video experience. The company’s rural customers do better than Vodafone’s urban customers.

Meanwhile the mobile games experience is underwhelming everywhere. The three carriers deliver a ‘fair’ gaming experience in urban areas. This drops to ‘poor’ outside the towns and cities.

Opensignal scores for rural download and upload speeds are a long way behind urban speeds. Spark is fastest overall. Its urban customers can download at an average of 41.9Mbps. In rural New Zealand, 2degrees’ customers get less than half that speed: 20.2Mbps.

5G can close or open rural mobile gap

The report concludes that if carriers use 5G on lower frequency bands in rural areas, the performance gap with urban mobile would close.

Eventually carriers will be able to use a range of frequencies for 5G.

The distance a mobile signal covers changes depending on the frequency. Lower frequencies travel further, higher frequencies cover a small area. There’s more bandwidth the higher you go up the spectrum.

Alternatively, if they focus on adding high capacity in urban areas, the mobile digital divide will widen.

To date Vodafone has concentrated on building 5G in urban areas. That’s where it sees the greatest demand, not necessarily the greatest need.

Spark started its 5G build in small South Island towns. Now it is building capacity in the main centres.

If the government wants to narrow the rural mobile experience gap, it may need to impose usage conditions on 5G spectrum in future auctions.