Spark is the first New Zealand carrier to support embedded Sim or eSim cards. It’s a version of the Sim card that, instead of slotting in, is hard-wired into some of the latest phones and smart watches.
If you bought a 2018 iPhone, you have an eSim. Likewise it is there in the recent iPad Pro and Apple Watches. There’s also an eSim in the Samsung Galaxy Watch 4.
The list of eSim-equipped devices is growing fast, but for now Spark only supports a handful of devices: Samsung Galaxy Watch 4 and iPhone XR, XS and XS Max. Owners of other suitably equipped devices will need to wait.
eSim in Galaxy Watch 4
Spark timed today’s launch to coincide with the launch of the Galaxy Watch 4. Spark offers what it calls the Unlimited Wearable Plan to customers buying the watch but they must also have a Spark phone plan.
The Unlimited Wearable Plan gives customers data, calls and texts for $15 per month. Spark says unlimited data, calls and texts which means after you’ve downloaded 22GB Spark will drop the data speed to a lower rate.
If you manage to get through more than 22GB of data on a watch you deserve a medal, especially as you must already have a phone to get the Spark plan.
New iPhone owners can activate their eSim with Spark using a QR code. If you already have a suitable iPhone, you’ll need to visit a Spark store to have your current mobile number and plan switched to the eSim. This leaves the card slot free to take another number or plan. It doesn’t have to be with Spark.
This is a beach head for the eSim in the New Zealand market. Spark’s move will spur its rivals to get a move on with their plans. Vodafone has already hinted it has something on the way.
Lots of reasons to like eSims
One advantage is that there’s no need to stuff around removing and installing fiddly little cards. This is handy for phone owners, but essential in tiny devices like smart watches. It’s also important for industrial users and others wanting to use cellular connections in their Internet-of-Things devices.
Another feature of the eSim is that it allows a phone owner to add a second account, possibly from another carrier. This would be useful if you often travel overseas or if you need to work in a part of New Zealand only serviced by one carrier that’s not your first choice. Some people use this to keep separate work and private connections on a single device.
Spark New Zealand managing director Simon Moutter is retiring. From 30 June customer director Jolie Hodson will take over.
Moutter remade, rebranded and renamed Telecom New Zealand.
He inherited a Telecom NZ that was not of his making. Moutter was the company’s chief operating office between 2003 and 2008, then spent four years as Auckland International Airport. He returned to Telecom as managing director in 2013.
During his absence, the government reformed the telecommunications industry. This triggered a set of moves that saw Chorus demerge from Telecom to win UFB fibre contracts.
From vertical integration to retail telco
The Telecom Moutter left was a vertically integrated incumbent. The Telecom he rejoined was a retail telco forced to a level playing field with 90-odd rivals.
His first challenge was to make sure the business survived the changes. His second challenge was to put it back on the path to thriving. Moutter achieved both these goals with distinction. Today’s Spark is a vibrant, competitive telco.
It remains New Zealand’s leading telco by size. Spark also leads its rivals on innovation. At the time Moutter joined Spark was number one in broadband connections. It still is, although its market share has dropped a little.
Back then it was number two in mobile behind. It has since caught up. You could even argue it is now the market leader. It definitely has a technical edge. Spark is leading the way to 5G mobile networks.
Moutter was in charge when the business changed its name. The move told the world it was no longer a telecommunications company. Since then it has moved into the media sector. It has a sizeable streaming TV service and has made significant investments in streaming sports media.
We don’t hear much about it, but Simon Moutter has done much to make Spark a more equitable workplace. Spark won the Rainbow tick. Moutter has also spoken out against race or gender discrimination. He has pushed Spark into the 21st century.
There’s lots to admire.
It appears that Moutter planned his resignation and handover to Hodson some time ago. Yet the timing is a problem. Moutter leaves Spark while huge and risky projects remain unresolved.
This unfinished business may explain why investors pushed the company’s share price down 3.5 percent immediately on hearing the news. At the time of writing the share price has fallen further and ahead of the market. It is down a total of 4.5 percent since the announcement.
Spark faces three challenges
First, the Rugby World Cup. There are stories that people inside Spark are becoming ever more nervous about this project.
Even if everyone involved with fibre network connections works long hours, there still isn’t enough time between now and the RWC kick off to install fibre to all the customers who want it. This problem could blow up as the event gets closer.
Delivering on that narrow promise isn’t hard. Spark can borrow necessary spectrum in a small area around Auckland’s harbour. Installing half a dozen 5G towers is no big deal.
On paper there is the unresolved matter of Huawei building the 5G network. No matter, Spark has other options.
A more pressing issue is an Auckland Harbour-only 5G network might not satisfy customers elsewhere.
Rival mobile companies are not yet in a position to invest in 5G. Getting there first is important. It would cement Spark as the mobile leader without question. A prolonged delay on a wider roll-out could see customers and investors lose confidence.
Spark’s third challenge flies under the radar. Moutter lead Spark in a move to Agile working.
While all the official noises from inside the company say it has been a success, that’s not the message that’s circulating elsewhere in the industry with Spark employees keen to find employment elsewhere. There is still time for this to go wrong.
It’s normal for a leader to leave a company without drawing a line under big items, but Moutter’s personal brand is associated with all three of these. There may be nothing to it, but investors and analysts are not convinced. Moutter and Hodson have three months to show otherwise.
Huawei has played a central role in New Zealand’s telecommunications infrastructure for a decade. The company’s New Zealand deputy managing director, Andrew Bowater, says it started working with 2degrees four years before the telco’s network was switched on in 2009.
The 2degrees partnership played a crucial role when in 2013, Telecom, now Spark, chose Huawei’s hardware to power its 4G mobile network. Bowater says; “We wouldn’t have won that without 2degrees, we wouldn’t be here today without them.”
Huawei’s relationship with Spark went deep. The two worked together to break new ground, they were the first to use 700 MHz spectrum for a 4G mobile network. New Zealand got that ahead of the world. Likewise, they were early getting 4.5G technology to market.
This is the second post in a series looking at how 5G’s reality might differ from perception. The first, Don’t expect a 5G big bang, boils down to how, often, the move from 4G to 5G mobile technology will be almost seamless.
Author William Gibson summed up a lot about technology when he said: “The future is already here — it’s just not very evenly distributed.”
That’s how it’s going to be with 5G mobile.
America’s Cup 5G
Spark New Zealand’s 5G plan is a good example of how this works. Managing director Simon Moutter has repeatedly said that his company aims to have a 5G network working on Auckland’s waterfront in time for the 2020 America’s Cup yacht races.
His idea is to showcase New Zealand technology to the world. Or at least the part of the world that watches yacht races. At the same time it will send a powerful signal to New Zealanders about Spark’s capability.
The company has a nationwide mobile network. Its 4G coverage extends to places where more than 97 percent of the population live, work or play. There are hundreds of 4G towers.
The 5G network pencilled in for 2020 is likely to be half a dozen or so sites. It won’t even cover all over central Auckland. There’s nothing wrong with this. It makes sense to start with a modest network build and then extend it to reach elsewhere.
New Zealand is not alone with this. Very few countries are building national 5G networks from scratch. The upgrade is expensive and the higher bandwidth, lower latency 5G offers is not essential everywhere. At least not yet. It will be over time.
Spark’s 5G mobile plan
It will take years, if ever, for New Zealand to get uniform nationwide 5G coverage. There’s a clue for this in Spark’s capital expenditure plans. Simon Moutter has previously said the company will fund its 5G mobile roll out from its existing budget.
In other words, the company doesn’t plan to spend up big in year one rolling out new hardware everywhere. It could take a decade.
There’s another aspect to this uneven distribution which we’ll look at in another post: it’s possible different places will end up with different types of 5G.
Chorus says it now has 500,000 Ultra-Fast Broadband connections on its network. The wholesale network company also announced plans to cut wholesale prices for the fastest connection speed.
Fibre demand has accelerated in recent months. It took Chorus five years to connect the first 100,000 fibre customers. The most recent 100,000 joined in six months.
In September, Crown Infrastructure Partners released numbers showing there were 605,000 connections nationwide for all Chorus, Northpower, UFF and Enable. That total would be higher today.
Connection speeds rising too
Customer connections are rising fast, so are their connection speeds. Chorus says customers are moving from entry-level plans to higher speeds. In order to speed the move up-market, Chorus will cut the wholesale price of gigabit fibre broadband connections for home users.
From the middle of 2019 the wholesale price for a home gigabit connection will fall from $65 to $60. Chorus promises a futher drop to $56 in the middle of 2020. This will reduce the price gap between a standard 100mbps plan and a gigabit plan, making the latter a more attractive proposition for many customers.
While dropping the wholesale price sounds like good news for consumers, it is up to retail service providers to decide whether they pass some or all of the savings onto customers. Some may do this, others may use the cut to fatten their margins.
Strange times at Spark
Writing at Stuff Tom Pullar-Strecker reports that Spark described the price cut as a step in the right direction. The company went on to say something quite strange;
…the wholesale price of fibre-optic broadband remained “far too high” and the retail prices Spark charged didn’t “allow for anything like an acceptable margin”.
This is bizarre as Spark is free to decide on its margin. If it thinks margins are not acceptable, it is free to raise prices. Any constraint on pricing comes from market competition, not the wholesaler.
The unvoiced subtext here is that Spark is annoyed that the Commerce Commission regulates fibre pricing. This means they have no leverage to demand a sharper wholesale price than other service providers. By law Chorus and the other fibre companies must offer the same wholesale price to everyone.
Given that Spark accounts for getting on for half the retail broadband market it might normally expect to get a lower wholesale price than smaller competitors. In effect, you can interpret Spark’s complaint as it doesn’t like facing its competition on a level playing field.
This is all the more odd, because some parts of Spark are hurtling towards the fibre era with gusto.
In the company’s media statement, Chorus CEO Kate McKenzie says fibre broadband demand has been rapidly increasing. She says: “…even more so now as more content moves online and New Zealanders prepare to live stream the Rugby World Cup and other sporting events in 2019. The irony here is that Spark is starting to dominate streaming sport. Presumably the margins on Spark are ‘acceptable’ for the company. But they wouldn’t be achievable without ubiquitous fibre.
Bill Bennett edits The Download magazine for Chorus. He also writes a weekly telecommunications newsletter. That doesn’t mean he wrote this post On Chorus’ behalf, nor does it necessarily reflects the company’s option, although it might. It’s all my own work, blame him if you don’t like it.