Bill Bennett

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Spark remains New Zealand’s largest telecommunications company. Previously known as Telecom NZ, it was originally the state owned monopoly.

Fire Service, Motorola, Spark team for mask radio

Motorola Solutions and the New Zealand Fire Service have developed a new two-way radio for fire fighters.

The radio’s microphone built into firefighter breathing apparatus. Each radio also has a push-to-talk button positioned centrally on the body.This means firefighters can operate it through thick rubber gloves with a clenched fist or fingers.

It’s a unique design that allows firefighters to communicate easily and safely while in action.

Motorola Solutions says the unit’s performance under very extreme testing for heat, cold and audio performance is exceptional. The heat testing, in particular, exceeded specifications by around 25 percent.

NZ developed

The radio was co-developed by Motorola Solutions with the New Zealand Fire Service to meet the organisation’s specific user requirements. Motorola’s Australian-based team members worked on the project with the New Zealand team in the field.

Motorola Solutions says it hopes to roll out the technology globally.

Spark New Zealand also worked with Motorola Solutions teamed on the project. The pair won a sizable deal that will see Motorola give 4500 firefighter radios. Spark will handle the back-up support including service management and a customer help desk.

Motorola and Spark have a five-year contract for the radios. It also includes provisions for other government agencies should that want to use the radio technology. This could improve on-the-ground co-operation between, say, firefighters and police officers.

Exacting requirements

Paul Baxter, CEO of the New Zealand Fire Service, says his organisation had exacting requirements for the radios.

He says: “Communication is critical to safety on the incident ground, and much of that communication comes from the use of incident ground control (IGC) radio.

“The radios will help us to resolve radio interface issues with firefighters’ breathing apparatus while also delivering improved noise cancellation and battery life.”

The radios use a combination of single and multi-band radios operating across both VHF and UHF bands.

Baxter says: “This radio solution enables us to move away from using a mix of models and frequencies and toward a nationally consistent standard that will make it easier to work with our emergency service partners”.

Spark Digital CEO Tim Miles says: “Radios are life-saving tools for our emergency services, and great team communication can be the difference between a managed incident and a disaster. We are very proud to play a part in improving the on-ground experience for our Kiwi Fire Service heroes.”

Hanging on to the landline

Many people reading this will already stopped using and paying for a telephone landline. Few people under 40 have a landline at home.

Naked broadband plans, internet connections without traditional phone lines, are growing fast.

Spark New Zealand is realistic enough to understand landline are a legacy product. You can buy a Spark naked broadband plan for $20 less than those with a bundled landline.

If you buy internet elsewhere, but still want a landline, Spark has plans starting at $53.50 a month.

Money

That’s money down the drain if everyone in your house has a mobile or you can make broadband voice over IP calls.

Until a few years ago most of Spark’s revenue came from landline phone services. They now account for less than half and their share of the total declines every year.

Not only are landlines costly, at times they are annoying. In many homes, the only time the old school landline rings is when a telesales person, or worse a robot, calls. These calls are rarely welcome.

Sure, you can get sales call on a mobile, but callers often pay more to make cell call. This means mobile calling campaigns are often better targeted.

‘Free’ local calls

Forget the landline promise of free local calls. For a start, they’re not free. They are unmetered. It’s not the same thing.

You’d have to spend a lot of time chatting on a mobile to rack up $53.50 in local charges. And anyway, many mobile plans include unlimited voice calls for little more.

Despite the cost and the hassle of dealing with unwanted calls, there are reasons why you may want to hang-on to that landline. At least for now.

Reasons to keep the landline

  • Old folk. Many older New Zealanders grew up with landlines. They are unwilling to change the habits of a lifetime. You can’t force your mother, granddad or an older business client to switch — although it wouldn’t hurt to try.
  • Young folk. Everyone can use a traditional phone, even children who don’t yet have a mobile. This may seem unimportant until a child needs to make an emergency call when an adult can’t.
  • Power outages The copper phone network has its own power supply. It works fine even where the electricty lines to your home are down. You may live in an area where there are frequent blackouts. Of course many modern phone handsets, especially the wireless ones, don’t work without power. You’ll need to keep an old style phone somewhere in case.
  • Poor mobile reception. New Zealand’s mobile networks are good, but not perfect. There are black spots. Some homes are either marginal or don’t have great coverage throughout the building. If that’s you, then you’re going to need that landline for a while yet.
  • Emergencies When disaster strikes mobile networks are often congested. So long as the landlines are unbroken, the network should work, so you should be able to make calls.
  • You live in the wop wops. Despite the Rural Broadband Initiative and more mobile towers there are still places beyond cellular reach. Satellite phones are an option, but are expensive and tempermental in poor weather. Old copper phone lines laid decades ago often reach these remote places.
  • Long calls. A cellphone is good for short calls. For long sessions, say an interview that takes over an hour, it can be more comfortable to use a conventional handset or headset. And if you make frequent long, local calls, then you might squeeze the value from unmetered local calling.
  • Bad VoIP Many who drop tradition landline phone services run into problems. There are great VoIP services and there are awful ones. Some sold by ISPs are disappointing, many third-party VoIP products are worse. Geeks might not struggle to sort the wheat from the chaff but for everyday users it can be daunting.
  • Business needs. Mobiles are great and do most things. Likewise VoIP services over a broadband connection. Yet you might have good reason to hang on to your existing PBX, Centrex or other technology. At least for now. If what you have works and you’re happy with costs, don’t feel pressured to move. There’s plenty of time. The government has yet to announced a date to close the copper network.

Fixed wireless broadband hits its stride

After a slow start New Zealand’s Rural Broadband Initiative has hit its stride.

RBI is a government-subsidised scheme to give farmers and people living in rural areas a broadband network.

Communications minister Amy Adams says the first stage is now complete with 154 new cellular towers now built. The towers serve 3G and 4G fixed wireless broadband as well as conventional mobile phone services.

She says 300,000 rural homes and businesses can use RBI wireless services.

Towers of power

The towers also increase mobile coverage in rural New Zealand. Before the RBI began mobile services reach a little over one-third of New Zealand’s geographical area. Today mobile services cover half the area.

In addition to the 154 new cellular towers, Vodafone will have finished upgrading a further 387 existing towers by this time next year.

Vodafone won the original contract to build new mobile towers. Chorus, which was then still part of Telecom NZ, won the contract to connect fibre to the towers.

Despite building the towers, the RBI contracts insisted Vodafone allowed other carriers to install their equipment. This proved a smart move.

3G RBI not up to much

Early Vodafone RBI services using 3G technology were slow, expensive and had low data caps. This meant there was a pitiful take-up. One year ago the total number of customers signed for Vodafone’s RBI was officially around 8,000, although insiders insisted the number of active was lower.

In May 2015 Labour communications spokesperson Clare Curran called for an inquiry into the low take-up numbers. Tuanz CEO Craig Young said his organisation was disappointed with the low uptake of RBI services.

At the time Vodafone RBI customers paid $95 a month for 30 GB of data and free calling. The 3G broadband speeds could be lower than 1 Mbps and were rarely faster than 5 Mbps.

Spark enters

Things picked up soon after. A few months after the complaints, Spark entered the market with a competitive offer. Spark’s rural wireless broadband was 4G from day one, offered a higher data cap and had user-installed hardware making it easier to get started. Vodafone responded in kind and numbers picked up.

Today many rural users can get fibre-like speeds for little more than the price paid by urban broadband customers.

Spark and Vodafone offer similar packages where customers get 80 GB of data and local calling for $106 a month, or an 80 GB naked broadband plan for $96 a month. RBI users with a 4G connection could see speeds go as high as 80 Mbps, although typical peak speeds are more often in the 30 to 40 Mbps range.

In comparison urban residential customers can get unlimited data at fibre speeds of 100 Mbps for around the same price.

Competition

Adams says; “This agreement has been very successful, with approximately four out of every five new cell towers hosting a mix of competing operators.”

RBI doesn’t stop with the 154 new and 387 upgraded towers. The now completed first phase of RBI was subsidised with $300 million of government funds — some of this from a tax imposed on telecommunications companies.

In the 2015 budget the New Zealand government earmarked a further $100 million to extend the RBI’s reach. There’s a further $50m to fill in mobile network black spots. The government says this will improve safety on highways and better serve remote tourism locations.

Adams set down ambitious goals for rural broadband, in May she issued a statement saying: “By 2025, I want to see 99 percent of New Zealanders able to access broadband capable of 50 Mbps, and the remaining one per cent in the hardest to reach locations able to access broadband of 10 Mbps.”

Spark, Huawei crack 1Gbps with Christchurch 4.5G

Christchurch skyline

Phones connected to Spark’s Central Christchurch mobile site can now download data at 1Gbps. Or, to be more accurate, they will when the hardware arrives in New Zealand later this year.

Spark has worked with Huawei to upgrade its Central Christchurch cell-site to 4.5G. The company’s Hereford Street building houses the Pacific region’s first commercial 4.5G site. It is one of the world’s first non-test 4.5G sites.

At the network launch today, Spark New Zealand managing director Simon Moutter says: “We built the network well ahead of the devices. One of the key things is to learn from this. We’ll build other sites later in the year.”

Gigabit wireless in New Zealand

Spark’s general manager, networks Colin Brown demonstrated the network’s ability to deliver gigabit speeds. He used special equipment for the demonstration. In the live test, download speeds reached 1.12Gbps. Brown said overnight the test gear recorded a peak of 1.25Gbps.

While 1Gbps is the 4.5G headline speed that’s not what most user will see when they connect. Brown says people will see speeds that are; “three of four times what you see today”.

The key to 4.5G speeds is the technology’s ability to use spectrum in different bands at the same time. The telecom industry calls this carrier aggregation. It also uses multiple antennae simultaneously to boost capacity.

With 4.5G data speeds and capacity increase at the same time.

Huawei New Zealand CEO Jason We says beside boosting data speeds, a 4.5G cell site can service ten times as many users as a 4G site.

Using 2300 MHz spectrum

One of the four spectrum bands used to deliver Spark’s 4.5G service is the 2300MHz block once owned by Woosh Wireless. The Commerce Commission cleared Spark to buy the spectrum at the end of March.

Moutter say it took just a matter of weeks to pull the 4.5G demonstration together. He says; “It demonstrates what we had our eyes on and why we were keen to acquire the Woosh spectrum.”

Because 4.5G is, in effect, a software upgrade to the 4G network, Spark could move fast.

Recipe for a 4.5G network

Brown says for a 4.5G roll-out Spark needs four things: “Above all else you need the software. We have this from Huawei and will be rolling out elsewhere between now and Christmas.

“The second thing you need is the antennae. You have to install them at the sites. To make 4.5G work you also need improved backhaul to take data traffic from the cell site to the internet. Generally speaking you need gigabit backhaul. You also need to devices”.

Huawei’s Wu says his company will be bringing 4.5G ready devices to New Zealand later this year.

Joint innovation

Spark’s 4.5G project is the latest fruit from the company’s joint innovation programme with Huawei. Previously the two built the world’s first commercial 4G network using 700 MHz spectrum

At the Christchurch launch David Wei, President Huawei South Pacific, says that earlier partnership pushed the boundaries of technology.

He says: “Today we continue that tradition with New Zealand’s first 4.5G giga site. For us one of the best parts of this partnership is that we are able to deliver technologies which until very recently only existed in our research and development labs.”

Spark and Huawei agree that video will be the big application on the 4.5G network. Wei says: “4.5G can support rich content streaming and true 4K video. It will be used to create a strong network supporting the emerging internet-of-things”.

Video made the radio star

Moutter says for practical 4K streaming video, a network must deliver a consistent 15Mpbs.

Brown says one aspect of 4.5G is the 2300 MHz spectrum can be configured with TDD (time-division duplexing). He says this means the spectrum can be optimised for downloading. This is an arrangement that works well with video traffic.

TDD is also used by a lot of fixed wireless broadband services. The potential for a 4.5G network to deliver fibre-like speeds to fixed wireless broadband customers could change the nature of services in rural New Zealand and present Chorus and the other fibre network companies with a serious challenge.

4.5G means bigger data caps

A network capable of 1Gbps downloads could mean customers will chew through monthly mobile data caps in seconds.

Moutter says: “The additional capacity of the 4.5G network is significant. It allows use to expand usage bundles at economic prices”. In other words: expect to see more generous monthly data allowances from Spark as the new network rolls out nationwide.

He offered insight into the pricing of mobile data saying Skinny’s Wireless Broadband which gives users 60GB of data for $55 would have been impossible just two years ago. The same applies to Spark’s wireless broadband product.

Moutter says: “Spectrum has been the constraining asset. We’ve invested in buying more spectrum. Using aggregation is the key to getting more from our investment”.

Christchurch technology

Moutter says Spark chose to use Christchurch as a demonstration site because it “wanted to do something special for the region.

He says Canterbury area is one of the first to be updated with 700 MHz spectrum services. He says: “We’re close to half-way done with that.

“After the earthquake we had to move the network around in Christchurch. Much of it, indeed much of the city, moved out to the edge. Now we want to focus on bringing technology back to the centre of the city. This was a good opportunity to commit to the rebuild”.

You can see the Spark 4.5 antennae on the top of the Hereford Street building in the photo at the top of the page. 

Spark fixed wireless broadband – a second front

Spark fixed wireless broadband arrived three months after subsidiary Skinny opened its fixed service.

There are three Spark fixed wireless broadband plans:

  • $80 a month buys 40GB of data and free local calling.
  • $90 boosts the data cap to 80GB.
  • $85 buys the same 80GB but subtracts local calling. Spark calls this its ‘naked’ plan.

Spark’s Home Wireless Broadband plans cost a little more than Skinny Broadband’s 60GB for $55 plan. Both charge $200 up-front for the fixed wireless modem. And no, you can’t bring your own modem.

However, customers prepay for Skinny Broadband, while Spark Home Wireless Broadband customers pay after the event through what we used to call the telephone bill.

You can take it as read that Spark’s move into fixed wireless broadband means the earlier Skinny Broadband launch has been a success.

Target market

Spark says Home Wireless Broadband is a service “for New Zealanders living in cities and towns who are frustrated with slow or unreliable copper broadband”.

There’s something in that. Waiting for promised fibre connections is frustrating for many. In some cases, a UFB link is still three years away.

Home Wireless Broadband will also be able to fill the gaps in some towns not serviced by either UFB fibre or by the Rural Broadband Initiative. In a sense Home Wireless Broadband extends the RBI beyond its existing boundaries to anywhere with a Spark 4G cellular tower.

Bypassing regulated services

Yet Home Wireless Broadband is also an end run around what service providers regard as expensive regulated local access fees for copper and fibre networks.

Spark has to pay a little over $40 to Chorus for each landline broadband account. With Home Wireless Broadband and Skinny Broadband, it gets to keep all the money. That means higher gross margins.

Fibre still best for most

Fibre remains a better choice for many customers. It’s faster, will get even faster and is more reliable.

Most fibre plans sold now are 100 Mbps or higher and are uncapped. That last part, no data caps, is important for people who stream a lot of video — and these days that means most users.

Typically you’d pay around $100 for a 100 Mbps uncapped fibre plan. Compared to $90 for 80GB of wireless data that’s a relative bargain — so long as you can get fibre.

Like Skinny Broadband only less skinny

Home Wireless Broadband uses the same technology as Skinny Broadband, it even comes with the same Huawei fixed wireless modem.

Most users will get low-end fibre-like speeds, although that depends on signal strength at your home. You should see around 40 Mbps which is more than adequate for streaming video. This is better than the 30GB basic fibre option.

However, 40 GB of data doesn’t leave much room for binge TV watching — an hour of decent-quality streaming video might use a gigabyte. Add in even modest day-to-day internet use and a Game-of-Thrones marathon will soon bust your cap.

Spark’s positioning

Spark recognises this limitation. It says Home Wireless Broadband is specifically for low to moderate data users.

A Spark press release quotes Mobile and Business CEO, Jason Paris who says: “While fibre broadband is the preferred solution for customers living in areas where UFB has been rolled out and who use a lot of broadband data each month, our wireless broadband services represent a great new choice for low to moderate data users, giving them fast, reliable and affordable broadband.”

Further down the press release Spark says it already has “more than 3000 customers” using 4G mobile for broadband services instead of using the traditional copper line network. This will be Spark’s rural customers, the company now sells an RBI service in direct competition with Vodafone.

Vodafone next?

Many in the industry expect Vodafone to roll out a similar fixed wireless broadband service to urban customers in the near future. It’ll be interesting to see if Vodafone sharpens its pencil to win market share.

Wireless broadband represents a threat to Chorus[1].

Last year Chorus celebrated what it saw as a win when the Commerce Commission set the regulated price for copper and fibre connections higher than anticipated (or welcomed) by the internet service providers.

That higher access price effectively opened the door for competition from fixed wireless broadband. If the regulated price came in at around the $30 mark, as expected, the economics of fixed wireless versus copper and fibre would look quite different.

Chorus has a monopoly on the local copper network. In about two-thirds of the UFB area it also has a local monopoly on fibre. Other wholesalers; NorthPower, Enable Networks and UFF, also have local fibre monopolies.

Wireless poses fibre risk

In each case they would have built their original business plans on the assumption they could maintain local monopolies. Wireless was always known as a possible risk, but when the UFB contracts dropped affordable fast wireless broadband was still a relatively distant prospect.

If fixed wireless takes off the value of the UFB contracts will have eroded.

The fact that Spark moved to launch its Home Wireless Broadband so soon after Skinny Broadband suggests there is demand for fixed wireless broadband.

Fibre companies are able to sell wholesale connections for less than the regulated price, so long as they offer all customers the same price. They won’t want to do this for obvious reasons, but if enough consumers opt for fixed wireless broadband fibre operators could find themselves outflanked.

The shape of things to come

For the most part, fibre companies will see fixed wireless as an annoyance more than a serious threat. However, today’s fixed wireless broadband services are only a foretaste of what is to come.

With 5G mobile, expected to land in New Zealand in about five years, wireless broadband speeds will equal today’s fibre speeds.

Equipment makers promise 10 Gbps. They also promise more efficient use of spectrum and greater capacity. This means fixed wireless operators will either be able to drop data caps or extend them so far they are no longer a barrier to all but the greediest data users.

The move to 5G is also likely to give fixed wireless operators room to move on price. While there’s a huge upfront capital cost for new network hardware, once installed operators will want to maximise their return on investment and that’s likely to drive fixed wireless broadband prices down. It could become cheaper than fibre.


  1. Spark’s entry in the fixed wireless broadband market also threatens companies already operating in this space.

    New Zealand has a number of local fixed wireless broadband networks, mainly in the regions. These are usually small players who have offered an alternative broadband service. They are likely to find the going tough as well-capitalised Spark, and maybe Vodafone, muscle in.

    On the other hand, having the big players enter will give them and their technology greater visibility. ↩

Spark winner in NZ mobile spectrum owner shift

Two years ago Vodafone owned more mobile spectrum than any other carrier.

While it still owns the most spectrum, Vodafone’s lead is slipping. It may yet fall further.

We’re seeing a land rush as carriers prepare for the next generation of mobile data services and Spark is grabbing more territory than anyone else.

One feature of 5G mobile is the ability to aggregate spectrum in different bands. In simple terms, the more spectrum a carrier holds, the more wireless bandwidth they have at their disposal. More bandwidth can either mean faster data speeds or a higher number of simultaneous customers.

5G changes the picture

As Analysys Mason explains, 5G cellular will need new spectrum. At the moment much of the potential 5G spectrum is set aside for other uses. From a telco point of view, all existing spectrum investments could be used for 5G, that doesn’t mean they will be.

In the future the carrier with the most bandwidth will be able to dominate the market.

This explains why Spark has pushed hard to catch-up with Vodafone. Depending on how you look at the raw numbers, it may already have overtaken its rival.

Two years ago Len Starling, policy and planning manager at the Radio Spectrum Management division of the Ministry of Business, Innovation and Employment, explained on this site:

For clarity, the spectrum bands currently used for cellular in New Zealand are:

  • 850 MHz (Telecom only) – 3G
  • 900 MHz (2degrees & Vodafone only) – 2G and 3G
  • 1800 MHz (all operators) – 2G and 4G
  • 2100 MHz (all operators) – 3G

In the bands currently used for cellular, the operators hold:

  • Vodafone: 130.4 MHz
  • Telecom: 110 MHz
  • 2degrees: 99.6 MHz (some of which is owned by 2degrees’ shareholders, Trilogy Ltd and Hautaki Ltd) .

Starling went on to say:

Soon, the 700 MHz band will also be used for cellular. All three operators will own rights in this band.

The 700 MHz spectrum auction took place soon after the earlier story appeared. By the time it finished, the ratio between the three main carriers in the bands Starling names as used for cellular had changed. Spark (formerly Telecom) picked up 40 MHz, Vodafone took 30 MHz while 2degrees could only afford to buy 20 MHz.

The new holdings are:

  • Vodafone: 160.4 MHz
  • Spark: 150.0 MHz
  • 2degrees: 119.6 MHz

Spark now has almost as much existing cellular spectrum as Vodafone, while 2degrees slipped further behind.

With cellular frequencies, lower numbers are better

On the whole lower frequency spectrum is more valuable than higher frequency spectrum.

Lower frequency signals travel further. This means carriers need to install fewer towers to cover the same number of customers. Signals find it easier to penetrate buildings and pass obstacles at lower frequencies.

In round numbers, spectrum lower than 1 GHz is prime wireless real estate. Staying with round numbers, we can assume the small edge Vodafone has over Spark in terms of absolute spectrum in the bands currently used for cellular is balanced by Spark holding more of the better frequencies.

Some animals are more equal than others

In other words, at the moment, the two companies are about equal when looking at the existing cellular bands. Meanwhile, 2degrees is behind, but not out of touch.

Given the current structure of the cellular industry, 2degrees will need a different strategy to the two big carriers.

So far we’ve only looked at the spectrum that MBIE describes as “currently used for cellular”. That’s not all the spectrum available to carriers. As Analysys Mason points out, with 5G all spectrum potentially comes in to play.

Revisiting the 2013 numbers

This takes us back to late 2013 and Vector’s submission to the Commerce Commission in the run up to the 700 MHz spectrum auction.

In particular is the graph below, which shows the New Zealand UHF (ultra-high frequency) spectrum rights holdings in late 2013.

UHF Spectrum Right Holdings New Zealand

Some of the spectrum shown in this graph wasn’t used for cellular at the time. Some of it still isn’t.

Ratio is important

Yet in simple terms the graph shows that, in late 2013, Vodafone, Telecom — now Spark and 2degrees held spectrum in a ratio of roughly 3:2:1.

In the brave new world of 5G mobile, the absolute amount of usable cellular spectrum in what matters. This ratio defines the potential future power balance between carriers.

So long as we’re talking in round numbers, the 700 MHz spectrum auction left that ratio intact. There was a small shift in Spark’s favour, but not enough to shift the big picture.

Spark moves on Woosh

That changed last week when the Commerce Commission gave Spark permission to buy 70 MHz of spectrum from Craig Wireless that was previously held by Woosh.

In effect Spark now has almost as much UHF spectrum as Vodafone. The two have almost three times as much spectrum as 2degrees.

A back of an envelope calculation estimates today’s UHF spectrum share as:

  • Vodafone: 320 MHz
  • Spark: 315 MHz
  • 2degrees: 120 MHz

This is an estimate based on the Vector graph plus the extra 10 MHz Spark won in the second round of the 700 MHz auction and the 70 MHz Spark purchased from Craig Wireless.

There may be more or overlooked spectrum not included in that last list but unless the overlooked blocks are large, the important point here is that Spark has shifted the 3:2:1 ratio to something closer to 3:3:1.

Disclosure: Bill Bennett has worked as a consultant for Spark Digital.