You need to buy a fixed wireless modem from Skinny before you can use the service. It costs $100 and a courier will deliver it to your home.
Seven months since Skinny Broadband launch
When Skinny Broadband launched, the price for a 60GB data plan was $55 a month plus $200 upfront for the modem.
Soon after launch, the modem price dropped to $100. Then Skinny added a 100GB plan for $65. This week Skinny settled on the cheaper and simpler 100GB for $52 plan.
One advantage Skinny Broadband has is it is prepay. This means customers only buy as much internet as they need. You might, say, use it if you move to a seaside bach for a couple of months over the summer. Students may sign for the service in term time, then use their parent’s internet during vacation.
Spark’s cunning fixed wireless plan
Skinny is a Spark subsidiary brand. It began by selling low-cost prepaid mobile phone plans. It expanded into prepaid broadband earlier this year.
While Skinny says “sales to date continue to hit target”, Spark is more positive.
Speaking at the company’s full-year results announcement, Spark New Zealand managing director Simon Moutter says fixed wireless broadband has exciting potential. He says it uses the significant spectrum assets Spark acquired in recent years.
Moutter says Skinny Broadband is a beta test of the company’s wireless internet plans. To date that service has signed about 12,000 customers.
Now Spark plans to ramp up its wireless broadband offering. It aims to add another 50,000 more connections in the next year.
The next step will see a full market launch of a fixed wireless service. Spark plans to promote it as a substitute for fixed-line broadband. The company will target the low-end of the market.
Beyond Skinny and Spark
Spark already sells fixed wireless to out-of-towners as part of the Rural Broadband Initiative. What is less known is that the company sells it to townsfolk as well.
Vodafone does much the same with its RBI fixed wireless offer. For now, Vodafone is not talking about ramping up its fixed wireless offer to urban customers. Yet a move would make sense. The company has the spectrum and the necessary technology is already in place.
Rival 2degrees has less suitable wireless spectrum to play with. Even so, in theory, it could offer its own fixed wireless service.
Much of the telecommunications industry interest in fixed wireless internet comes down to bypassing high wholesale landline charges. Thanks to a Commerce Commission ruling the wholesale cost of a copper line is $41.69. This is high by international standards and makes fixed wireless broadband more competitive.
Readers ask how they can know in advance if they’ll get decent speeds. Skinny says it offers a money back guarantee so you can test the service for 30 days to check it works for you.
Before going to the trouble, there’s a simple tool on the Skinny site that tells you if you can get a connection. You can also check the Spark 4G coverage map — Skinny Broadband uses the Spark 4G network.
In theory, the darker the pink, the better reception you’ll get at your home. In practice, you need to be careful. At one level the map shows my house is in a pink zone, but I only get so-so coverage. If I zoom in to the highest resolution, the coverage map shows my house only gets ‘fair’ 4G reception.
There are antennae sockets on the back of the Skinny Broadband modem, but no antennae in the box. The sockets are hidden by a plastic lid.
According to the documentation in the modem box, you can buy the antennae separately. I asked Skinny about this. Skinny doesn’t sell the antennae. It doesn’t seem keen on the ideas. According to Skinny: “The testing we did showed they provided little material improvement to the speed.”
That could be right. I found a spare antennae I had from another product, it made no improvement. Although tempted, I decided not to attempt running a cable to the roof and mounting a higher antennae. There’s only so much I’m prepared to do in the name of science.
If I was going to stick with Skinny Broadband, I’d experiment with a home-made Yagi antennae. If anyone has done this I’d be keen to hear about it.
One problem I have here is that where I live is not yet covered by 700 MHz 4G, the local signal seems to be 1800 MHz, which has different characteristics.
One other good piece of advice I had from Skinny was to locate the modem as far as possible from other electronic equipment. I found I got better speed, 25 Mbps instead of the 20 or so I could see, when I moved the modem to a room without any computers, servers or routers.
Even though the speed isn’t great at home, I’m almost tempted by Skinny Broadband. For me the deal breaker is the 60GB data cap.
While this is more than my household would use most months, there are times when we go way, way over. When I do a big cloud backup we might use close to a terabyte. That might happen twice a year. Then there are times when we have visitors and the data load jumps.
I understand my use is far from typical. While Skinny Broadband may not suit your needs or my needs, the data cap is plenty for average users. Your parents might appreciate it even if you don’t. I’m already recommending it to people I know who are light data users.
It is competitively priced. Even after the $200 upfront payment for a suitable fixed wireless modem, Skinny Broadband is New Zealand’s cheapest mainstream broadband plan.
We’ve been conditioned to think wireless data is expensive. So you might think it odd that Skinny can deliver wireless broadband for less than any terrestrial broadband plan.
Skinny bypasses the copper tax
The reason is simple. Skinny doesn’t pay Chorus or any other network provider a regulated $42 (or thereabouts) each month for copper or fibre network access.
Don’t underestimate the effect this is going to have on the broadband market.
Some have described the access fee charged by Chorus as a copper tax. I’m told by industry insiders and advocacy groups that the government threatens retribution if they use that term again.
Flaw in UFB project
Forget what the Commerce Commission says. Government needed a high copper tax to placate Chorus shareholders. That’s because the government nailed fibre network builders to the floor when negotiating contract prices. Without the copper tax income, Chorus shareholders would get an unfair investment return.
In effect, the UFB deal the government first offered Chorus was financially unsustainable. The company had no choice at the time but to accept a poor deal and hope it could negotiate or lobby for concessions later. Concessions like, say, the Commerce Commission settling on a high copper tax.
Before winning a higher copper tax through the lengthy Commerce Commission process, that earlier, strong-armed fibre deal represented a threat to Chorus and to the company’s shareholders.
It also threatens the government’s UFB fibre broadband project.
A bigger picture
The threat goes further. If word got around that doing big NZ government infrastructure projects was financially risky, the government would struggle to get roads, railways, airports or hospitals built. Shareholders wouldn’t let managers bid for future NZ government projects.
Experts, analysts and industry lobbyists argued the toss over the right copper tax level for months. In the end, the Commerce Commission settled on a regulated access price that pleased the government and Chorus shareholders while disappointing everyone else.
Now that high price has become a different problem. It makes fixed broadband vulnerable to wireless competition.
Copper tax headroom
If the Commerce Commission had settled the access price at the lower level the industry had previously anticipated, there wouldn’t be much headroom for an alternative like Skinny Broadband to muscle in.
Who knows what market share Skinny will pick up? It will win some business for sure. The price is keen enough to pull customers from existing plans.
Assuming Skinny Broadband grabs more than a handful of customers, it will mean a slice of the potential market is lost to copper, to UFB, to Chorus and to the other fibre companies. That will, in turn, change the economics of those businesses. Costs will spread over few customers.
The UFB business model only works if a large number of potential customers sign up. It may even mean the Commerce Commission will need to return and strike a higher copper tax to keep Chorus and the UFB on track.
There’s more to this than Skinny
If this was just about Skinny Broadband, Chorus and government would have little to fear. They could shrug it off as a small competitor.
However, Vodafone is sitting on a huge chunk of suitable bandwidth. 2degrees has some. Spark may enter the market it its own right. As New Zealand’s largest ISP that would cause headaches for UFB.
There are other slices of spectrum. In theory all, or at least most, of it can be used to bypass UFB fibre with similar wireless broadband products.
New Zealand has a small population and relatively uncrowded airwaves. There may be enough spectrum to meet all the market demand for broadband.
Should all these broadband alternative chickens come home to roost at once, they could put a serious dent in fibre demand.
Forewarned about wireless
Wireless has been a known threat to fibre since the UFB was first announced. Wireless was listed as a possible risk before the UFB contracts were awarded. The technology has improved since then.
Now it is maturing as a viable alternative, not for everyone, but for some users. Maybe enough users to upset market assumptions. Fibre may have advantages, it may be a better technology. History shows us that merely being a better technology has never been enough to ensure success.
While this is enough of a challenge for terrestrial broadband planners to be getting on with, it is only the start. Work is already underway on 5G mobile, that promises to deliver fibre-like speeds with greater efficiency.
No-one in government is going to heed the words of a journalist like me, but if it wants to avoid future problems with UFB, now would be a good time to revisit those original contracts and offer Chorus and the other fibre builders better, more sustainable terms.
Then revisit the so-called copper tax.
At the time Chorus was still part of Telecom NZ. If Telecom NZ didn’t agree to build the UFB network it would have found itself up against a government subsidised and supported fibre network competitor. ↩
Skinny Broadband is cost effective alternative to a copper or fibre internet connection. It is a fixed wireless broadband service piggybacking off the Spark 4G mobile data network. Sometimes this approach is known as BoLTE: broadband over LTE.
You get the same basic data service as a Spark mobile phone user on the 4G network, but in a fixed, not mobile, package. A Skinny Broadband connection only works from the address where you register the account.
In many ways, Skinny Broadband is a nationwide version of the service Vodafone and Spark use to connect remote customers to their fixed wireless rural broadband networks. It even uses the same fixed wireless broadband modem.
Skinny is Pak N Save to Spark’s New World. A low-cost no-frills brand that hits important competitive markets without harming the corporate mothership’s upmarket reputation.
Which explains why Skinny Broadband uses Spark’s 4G network. This is important, Spark owns more 700 Mhz spectrum than any other carrier. So, in theory anyway, it will out-perform any direct competitor. It also means Spark has spare capacity to support Skinny Broadband.
At NZ$55 a month plus a one-off $200 for the modem Skinny Broadband is one of the cheapest and fastest ways of getting online.
For when a fibre connection is too much
Skinny Broadband is a great option for users who feel they don’t need a fibre firehose blasting vast amounts of data into their homes.
Another advantage is that Skinny allows casual contracts — that makes Skinny Broadband an ideal back-up or an option for a bach or second home. Once you’ve paid for the modem, you only need to pay for the months you are using the service.
Broadband for dummies
Skinny Broadband also happens to be one of the simplest ways of getting online. Immediately after the courier dropped off my modem, I was on the phone to organise a review account. I was connected within 20 minutes of the delivery.
There is no waiting for engineers to install anything. No hanging around for remote provisioning.
Skinny sent me a Huawei LTE modem. Some rural wireless broadband customers get the same device. It is not as pretty as my Netgear modem and the Wi-Fi isn’t as fast, but it comes with four gigabit Ethernet ports so you can plug in your network devices. There is one bright yellow Ethernet cable in the box.
You’ll get the best broadband performance if you plug your PC into one of the Ethernet ports. But that’s optional. It needs to be as many modern devices don’t include Ethernet ports.
Not the best Wi-Fi
The router has Wi-Fi so you can connect all your devices: computers, phones, tablets, TVs and so on without the need for cables. The documentation says it will handle 32 devices. It doesn’t say how well it will handle that many.
It supports the 802.11 n version of Wi-Fi. An 802.11 ac device would be better. You can’t use your own device, the Huawei kit is locked to the network.
The router needs a mains power socket. It comes with a cable that’s about a metre long. This could be a problem. Skinny’s technician told me to put the router on a window sill — luckily there’s a suitable one — we’ll come back to that point in a moment — within a metre of my distribution board.
The instruction leaflet that came with the modem mentions optional extension antennae, there were none in my box.
These extra antennae might be useful. My home has only moderate Spark 4G coverage. I never noticed this with my phone.
If I choose to keep the Skinny Broadband account I’ll start hunting for the antennae.
Performanace is a mixed bag
When I first connected I saw a speed of around 18 Mbps down and 7 Mbps up. By moving the modem unit around I managed to get this to 21 down and 7.5 up. I could get a better speed if I cheated and taped the modem to the top of my office window, but that is not a good look when visitors come to the house.
Performance is far more sensitive to the modem position that you might imagine. When out cat jumped on the window sill and moved the modem about 100 mm, the speed dropped 5 Mbps. This lead to an hour hunting for the optimal, non-taped spot, which, luck would have it, was my first choice.
If I could get that speed, I’d be sold on Skinny Broadband today. I tested other places around my house, 22 Mbps is the best I can get unless Spark does something to my local tower.
My existing VDSL account is consistent at about 40/9 Mbps. It may bounce around but only by a few percent. The ping time to Spark’s Auckland service is 9ms on VDSL, with Skinny Broadband I was getting 20ms plus for pings to local servers.
In contrast, Skinny Broadband’s speed varies over a wide range. On Friday I was nudging past 20 Mbps. Saturday it was topping out at 17. Early Sunday morning — there’s a reason for this, read on — it was back above 20. By Sunday evening it was just 12 Mbps.
While that speed is disappointing, it is still useful. Sunday and Monday mornings I watch English football on my iPad Air with Premier League Pass. VDSL handles the streaming video with aplomb. I was interested to see how Skinny Broadband coped.
On the day Skinny Broadband didn’t miss a beat. For two hours the sound and vision streamed a glorious Retina image without missing a beat. I also used it for a Facetime conversation to Paris, again without a glitch.
I suspect that I would struggle to get that performance if anyone else in the house was online at the same time. But for me, that’s my most demanding regular internet application. Skinny Broadband passed the test.
The monthly NZ$55 fee buys 60GB of data. That’s enough for day-to-day browsing, emails and basic Internet use. There’s even headroom for some streaming video although binge viewers of HD quality video might hit the data cap.
Extra data costs $20 for 10GB. This is far cheaper than buying extra 4G data for a mobile phone account. In part Skinny can sell its broadband for less than a standard 4G mobile account because it is fixed. The network operators know where the users are located and can provision their service accordingly. With mobile data this becomes more complex and expensive.
Skinny Broadband’s price is on a par with Spark and Vodafone’s rural wireless broadband services. Both companies sell their basic service for $105 a month. That money gets rural users 80GB of data and unlimited national calling. To get 80GB with Skinny you’d pay $95, add $10 for a VoIP service and you’re looking at the same price.
This goes some way to explaining why Skinny Broadband is one of the cheapest options on the market. Dial-up is cheaper but useless. Trustpower has a $75 for 50GB ADSL plan and a $49 unlimited plan, but that means buying other services from Trustpower and signing for a 24-month term.
The catch is the $200 upfront for the modem. If you stick with Skinny Broadband for a couple of years you’ll definitely be ahead over the long term. Although, in effect, that’s the same financial burden as signing a contract. Otherwise you’ll need to weigh up that cost. If fibre is coming down your street in the near future, it may pay to wait.
Who should buy Skinny Broadband?
Fixed wireless broadband isn’t for everyone. If you need lots of data, perhaps you’re an avid TV viewer, then get a terrestrial connection. It’ll be cheaper in the long term. The same applies if you run large online backups or similar applications.
Likewise, if fibre is available and you need consistency and speed, then that is usually going to be a better choice. I’m not a gamer, but I suspect the latency in a terrestrial connection will be more to your taste if you are.
Everyone else, and that’s the majority of users, should at least consider Skinny Broadband. It will change life for people who live in fringe areas at the edge of fibre or copper networks, but still close to mobile towers. I think it is an especially good choice for moderate internet users who want to keep costs under control. That probably doesn’t apply to many readers — but you can influence your friends and family members.
What I’d like to see with Skinny Broadband
The router is fine, but basic. I couldn’t log in to the admin page, which won’t worry most users but is a concern to me.
I’d also like to see support for faster Wi-Fi. It would also be helpful if Skinny could supply the add-on antennae, even if that means an additional cost.
Also not clear from the documentation is whether it is possible for Skinny or Spark to tweak the antennae on towers to improve performance for individual users.
Skinny doesn’t offer a VoIP option, that’s a shame because, otherwise, the broadband service is an excellent reason to cut the cord. At $55 a month, the price is not much more than the price of an old school telephone connection.
60GB of data for $55 a month is one of the best broadband deals around if you’re comfortable with a $200 upfront payment for the modem.
Some people get solid speeds, you may not. It would pay to check the quality of Spark 4G reception before paying the $200.
A good option if you think you won’t need fibre broadband.
The 4G fixed wireless broadband service costs $55 a month for 60GB of data. From reading the Skinny site it is clear the official modem is not optional.
If you stick with Skinny for a year the cost adds up to an extra $16 a month. Over two years it would be $8 a month.
So long as you can make a case for buying Skinny’s 4G broadband service in the first place, the extra cost of the modem makes sense.
Making customers buy the modem first means the company can offer 4G broadband without restrictive contracts. That flexibility makes the deal more attractive to some users.
I’d choose buying the $200 modem over a 12 or 24-month contract any day.
To put the price in perspective, I recently saw an invoice for a 33 Kbps modem I bought 20 years ago when working as a magazine editor in Sydney. It was A$700. That’s well over NZ$1000 in today’s money.