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Bill Bennett

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Tag: Spark

The telecommunications company formerly known as Telecom NZ. Still New Zealand’s largest telco and a major player in mobile and information technology services.

What Spark thinks about its fixed wireless broadband

Last week Spark announced its first half results for the six months to December 31. It is a solid report showing strong revenue growth.

Spark looks to be heading on the right track. Yet there is an interesting angle on one of the company’s strategic moves.

Nine paragraphs into the market release there is this quote from CEO Jolie Hodson:

“We made a deliberate decision to limit wireless broadband sales in the lead up to the Rugby World Cup, as a conservative measure to ensure customers had a great viewing experience while we introduced our new streaming service. Our capacity was more than sufficient, so we expect this to be a one-off and connection growth to return to trend in the second half.”

In other words Spark back-pedalled on fixed wireless broadband sales because senior management didn’t want customers to have a disappointing Rugby World Cup streaming experience.

Fixed wireless alternative

Spark pushes fixed wireless broadband to its customers as an alternative to fibre. It’s a strategic move because Spark owns its wireless network. That means the company doesn’t pay a wholesale fee to a fibre company. It keeps all the money and that makes for a higher profit margin.

Investors love that.

Downplaying fixed wireless broadband in the run up to the Rugby World Cup made sense. Although fixed wireless broadband should be able to give customers enough bandwidth to watch high definition streaming video, that’s not always the case in practice.

Unlike fibre, which has consistent and predictable performance, fixed wireless broadband performance varies from place to place. In some cases it also varies at different times of the day.

Fixed wireless broadband bandwidth is shared. So if a lot of people connect at once, speeds can drop. The Rugby World Cup saw data traffic peak across the nation. That put pressure on more marginal fixed wireless broadband connections.

Good at times

Fixed wireless broadband can be good. I’ve heard from happy fixed wireless customers who enjoy decent speeds and uninterrupted connections.

There are others who say their service does not do an adequate job with streaming video.

One common complaint is that wireless broadband speeds are not consistent. In some cases speeds vary in a regular pattern over the course of a day. Others say they get intermittent slow downs.

Conservative on fixed wireless broadband

Spark describes the decision to back-pedal on selling fixed wireless as conservative. That may be the case. But it underlines that the company is not confident about its fixed wireless performance.

There was no conservatism about selling fibre broadband to customers in the run up to the Rugby World Cup.

The message is clear: Spark knows fixed wireless broadband is a lower quality product. It knows customers get a better experience on fibre.

That said, fixed wireless broadband is often an acceptable alternative for customers living in areas that are not served by fibre. It is the main technology for Rural Broadband Initiative customers.

Again, going by user anecdotes, some people who can’t get fibre find fixed wireless performs better than their local copper broadband service. Others do better with a fast copper connection.

SamKnows

This is all anecdotal. Yet there is some evidence in the Spring 2019 Measuring Broadband New Zealand report prepared for Commerce Commission by SamKnows.

Broadband download speeds peak versus 24-7 performance

Customers with a 100 mbps fibre plan saw average download speeds of 99mbps. During peak time the dial barely moved. Samknows reported peak speeds at 98.6 mbps.

With fixed wireless broadband the average speed is 25.8 mbps. At peak times this drops to 22.7 mbps. That’s not a huge drop, but it squares with the anecdotal evidence that some customers see big drops while others see little or no drop.

Fixed wireless broadband latency

The SamKnows data also looks at latency. This is the time it takes for data to do a round trip. If latency is high, online users of applications like video conferencing and gaming can expect stuttering and dropouts. SamKnows says 30 ms is high.

SamKnows found nine in ten fibre connections had latency below 20 ms. In comparison 95 precent of fixed wireless connections had latency of over 30 ms. The average latency is around 50 ms.

Of all the latency tests performed on Fibre connections, 92% were below 20ms. At the other end of the chart, 95% of Fixed Wireless latency results were above 30ms.

Dropouts

That’s past the point where dropouts start. With everyday TV streaming, buffering can shoulder some of that load. Even so, it is a worse customer experience.

SamKnows’ summary says:

“…many fixed wireless connections will experience issues with latency-sensitive applications such as video calls and gaming.”

VDSL2+ can deliver near fibre speeds and in some cases is consistent and reliable. Before fibre came down my road I had a Spark VDSL2+ connection that delivered a consistent speed of more than 70mbps.

In three years it never wavered. You can read about my fixed wireless experience in this post. The speed was never anything like as fast as the VDSL2+ connection.

Fibre most reliable

Of course VDSL2+ is not as good as fibre. In the report summary SamKnows says:

“Households with multiple user should consider fibre, if available, for the most reliable performance.”

Spark knows all of this. The reason it pushes fixed wireless broadband is that the margins are higher. That’s because there is no wholesale charge.

For many Spark customers fixed wireless broadband is the right product. But let’s not pretend it isn’t an inferior product to fibre. Spark is willing to let its investors know that.

Disclaimer: I edit The Download magazine for Chorus as a contractor. It covers the company, the telecommunications industry and fibre broadband. These are my views and not those of Chorus. 

Telcowatch: Tracking NZ mobile market share

Telcowatch says Vodafone is New Zealand’s mobile market leader.

There’s not much in it. Vodafone is one percent ahead of Spark on 36 percent.

The two were neck and neck for most of last year.

While the lead is real, it’s not dramatic.

Nor is it the whole picture. The way Telcowatch measures the market means that Spark’s Skinny business is counted separately from its parent company.

Adding that back into Spark’s figure puts the company well ahead of Vodafone with a 41 percent market share.

Telcowatch monthly market share 2018 - 2019

However you crunch the numbers both Spark and Vodafone have a clear lead on 2degrees. The third mobile carrier’s market share is stable at 23 percent. That makes it a little over half the size of Vodafone and Spark.

That’s a respectable showing for the youngest mobile carrier which entered a market that was almost at saturation point. And there is no question 2degrees has reshaped the market.

It probably suits everyone concerned to count Skinny as a seperate business.

Yet Skinny is definitely a Spark brand.

When Skinny started it was more distinct from its parent than it now is.

Today Skinny’s product alignment can be seen as rounding out Spark’s offerings. It’s a no-frills version. In supermarket terms it is PaknSave to Spark’s New World.

The two share the same network infrastructure. Skinny employees may be loyal to the brand, but they are Spark employees. Spark’s management decides Skinny’s strategy.

Skinny remains the smallest of the four brands. In December its market share was 5.6 percent. It has been between roughly five and six percent for the last couple of years.

The most interesting aspect of the recent report from Telcowatch is not the interplay between Spark and Vodafone, but the way Skinny has been growing its market share at the expense of the parent company.

Over the last year Skinny is the best performer in terms of market share growth. It has grown gradually.

It’s not hard to understand why. Despite all the fuss about 5G, the mobile phone market is mature. There’s less differentiation between brands and less of a premium in Spark’s brand when compared to Skinny.

There is, however, a considerable price difference. Slowly, but surely, customers are waking up to this. You can buy what amounts to the same mobile experience for less money. The big surprise is that more people have yet to realise this.

What New Zealand’s 2020 5G spectrum auction reveals

In March, New Zealand’s government will auction 16 10MHz blocks of spectrum in the 3.5GHz band.

It’s an unusual spectrum auction. Most past spectrum auctions in New Zealand have been for 20-year licences. This time, the licences are for two years.

The reason for this is that the industry is pressuring government to release the spectrum they need for 5G mobile services.

Treaty claims

At the same time, the government has yet to reach a Treaty of Waitangi settlement with iwi over spectrum. Selling short-term licences buys time to complete negotiations.

Each of the 16 10MHz blocks has a reserve price of $250,000. Bidders need to deposit $500,000 to take part in the auction.

If everything sells at the reserve price, the government will raise $4 million. Prices can go higher. The last time spectrum was auctioned prices went much higher.

No single bidder will be able to buy more than four blocks in the first auction round. This is less than the 80MHz to 100MHz recommended for full 5G services by the GSMA, an international mobile operator trade association.

The rights are not tradable, are nationwide and buyers must use them for 5G mobile services.

More spectrum later

Licence terms start later this year and finish at the end of October 2022. The government will hold a further, long-term auction for the spectrum that year. The government says it expects to free up more spectrum later.

Bidders in the March auction will have to return existing 3.5GHz management rights to the government.

This affects Vodafone more than any other carrier. It is possible Vodafone’s existing 3.5MHz holding will fall. Returning existing spectrum will help flatten the playing field. There will be a refund for returned management rights.

Radio Spectrum Management, part of the Ministry of Business, Innovation and Employment, will use a simplified version’s of a combinatorial clock auction. In effect, this starts with the seller offering blocks at the reserve price. If the demand for blocks is greater than the supply, it increases the price.

Beyond the three mobile carriers

New Zealand has three existing mobile networks. There are 16 spectrum blocks on sale and each bidder can buy four in the first auction round. That means the government expects a fourth buyer to enter the auction.

This is a departure. The earlier auction for 700 MHz band spectrum was tailored to cater for the three mobile carriers; Spark, Vodafone and 2degrees.

The obvious candidate is Dense Air. The company owns 70 MHz of 2.5 GHz spectrum. At the moment Dense Air acts as a wholesaler to the mobile carriers. Spark’s tiny South Island fixed wireless broadband 5G project uses Dense Air spectrum.

Other parties may be interested in the spectrum. Few of New Zealand’s Wisps1 could afford the $500,000 deposit or the $250,000 per block asking price. Yet if they were to act collectively a bit might be possible.

If the government doesn’t sell all 16 lots in the first auction round, it may offer them to existing bidders.

Given that the amount of spectrum being auctioned is not enough for carriers to offer a full blown 5G service, it looks as if will be some time before New Zealand gets all the benefits of the technology. There’s enough bandwidth for fast data speeds, but, as things stand, maybe not enough for carriers to deliver the gigabit plus speeds 5G hype has promised.


  1. Wisps are small, local wireless internet service providers. They cover rural and remote gaps in markets not served or poorly served by bigger telcos. ↩︎

Seven biggest tech moments of 2019

Every year throws up a long list of news stories, product launches and events. This year was better than most. Here are six 2019 stories that resonated with me. It’s a personal, unordered list and it’s written from a New Zealand perspective. You may have other highlights. Feel free to share them in the comments below.

Apple AirPods Pro

Apple AirPods Pro

Apple used a busy, noisy Auckland cafe to show off the AirPods Pro. By the time they hit New Zealand there was already an excited buzz about the noise cancelling ear buds. I expected a positive experience.

Even so, the sound quality was surprising. It wasn’t only the active noise cancelling, although that’s impressive enough. The AirPods sound is accurate. It doesn’t seem possible that something so small could sound so good.

My review says Airpods Pro offer affordable noise cancelling. I recommend you read this.

Samsung galaxy foldSamsung Galaxy Fold

Until 2019 it had been a long time since I left a product demonstration with a smile on my face. Then it happened twice in a short period. First with the Apple AirPods Pro, then a second time with the Samsung Galaxy Fold.

The price tag is be north of three grand (NZ$3400). Samsung’s first generation folding phone is a touch more fragile than I’d like. Yet here is the first major breakthrough in handset design since Apple’s first iPhone. Samsung has broken the mould and come up with real innovation.

Samsung’s Galaxy Fold is less a phone, more a small tablet that you can fold and carry in a pocket. You might even see it as a pocket computer. Either way, it is beyond impressive.

When folded it is a long slim phone, a little thicker and heavier than we’ve come to expect. Unfolded it is about the size of an iPad Mini and does much the same job.

Huawei showed its folding phone earlier at Mobile World Congress. A brief look confirmed it was a contender. So far, only one of the two models on show in Barcelona has made it to market in New Zealand.

No doubt there will soon be more, better folding phone designs. I’d love to see what Apple can do with this format: how about an iPhone that morphs into an iPad?

But for now, this is Samsung’s triumph.

Spark Sport, Sky Sport Now

Spark Sport’s Rugby World Cup service came in for flak and some cruel media attention. That’s what you get for interfering with New Zealand’s favourite sporting code.

In my experience the streaming service worked fine during the RWC. I’ve racked up well over a hundred hours with the app. A lot of that was watching Premier League football1.

There have been hiccups, yet it is better experience than the BeIN service it replaced. My only gripe was I enjoyed the preview shows and the run-up coverage before big games on BeIN. Spark offers less of that. Also, half time is not so much fun without pundits.

Spark’s entry into streaming sport services has seen Sky lift its game. The new Sky Sport Now app has 12 channels of sport around the clock.

Sky Sport Now has excellent cricket coverage. It fills the European and international football gaps left by Spark. Most of the time there are enough channels to cover every game. Although there was one Champion’s League round where my team, Chelsea, only showed up as a replay later in the day.

I’m not complaining. The service is excellent. It’s good to see Spark and Sky compete by offering the best customer experience. It would be great if we had more of this kind of competitive tension.

The two streaming sport options are great value. Buying Sky Now and Spark Sport works out less each month than an old-style subscription to Sky’s satellite service. By my reckoning, there’s a broader selection of content to watch. That’s a win.

Deebot Ozmo 900 with Howl Bennett

Deebot Ozmo 900

Robot vacuums aren’t new. The Deebot Ozmo 900 updates the idea. It offers mopping as well as vacuuming. I had low expectations before I saw it in action. It impressed me once we used it. This is the only way to go.

The best part about the Ozmo 900 is that it’s low-slung body can get under beds, cupboards and tables. These are places where manual vacuuming gets hard. Another great aspect is, because it does all the work, you can vacuum more often keeping the house cleaner.

Ozmo 900 is a long way from the Androids science fiction writers promised for 2019. The good news is we don’t need to hire bladerunners to take them out when we’re done with them.

Auckland's first fibre
Steven Joyce installing Auckland’s first UFB cable – Albany – 24 August 2011

UFB: end of part 1

In the end builders finished the national UFB fibre network on time and under budget. That’s rare for a major infrastructure project and unusual given the project length. Read how the project started in The Download.

For me one of the clearest signs the original UFB project succeeded is that government found more money to connect another 169 areas. The so-called UFB2 takes coverage to around 85 percent of the country.

Another clear sign of success was Spark’s decision to stream Rugby World Cup coverage.

Next year, Chorus and central North Island fibre company UFF will offer 2Gbps and 4Gbps fibre. We’ve come a long way from ten years ago. Then a 30mbps fibre service looked like the last word in modern data communications.

Vodafone 5G

The Vodafone giant awakes

In recent years it seemed as if Vodafone’s New Zealand operation wasn’t going anywhere. In part this was because the parent company felt it had better things to invest in than the second telco in a small, remote country.

That changed in May. Infratil and Brookfield Asset Management took control in a $3.4 billion deal. Chief executive Jason Paris wasted no time getting the new owners to free up capital. This let Vodafone steal a march on Spark and get a sizeable 5G network running. Vodafone switched 5G on earlier this month.

There has also been an investment in customer support. That’s something that was an embarrassment in the past.

These initiatives are important, yet there’s more to the change. It’s as if Vodafone has had a vitamin injection. Now there is an energy to the business that wasn’t there before. It helps that Paris recruited fresh talent to senior positions, but it goes beyond that. It is as if the company has awoken from a slumber.

What it means in practice is that Spark faces greater competitive pressure than it did 18 months ago. Likewise the next tier of telcos; 2degrees, Vocus and so on, are also feeling the heat. Ten years after government restructured the industry we are seeing the competition those moves aimed to unleash.

Christchurch call

Six of the biggest tech moments of 2019 are positives. The seventh is also a positive, but it’s a positive that came about because of an horrific negative.

In May Prime Minister Jacinda Ardern spoke at the Christchurch Call summit in Paris. It was a response to the Christchurch mosque shootings. The terrorist shooter filmed his crimes, streaming them online in real time.

The summit attempts to force social media companies to take more responsibity for material they publish. During the year, 48 countries signed an agreement to stop social media publishing terror messages. The US didn’t sign.

It isn’t clear if the initiative will work. Yet it is a first step towards wrestling control of online media away from the murderers and criminals who use it as a weapon. I suspect there is more to do, but the longest of journeys starts with a single step.


  1. It could be more than 200 hours, I’m not counting ↩︎

Spark dips toe as Vodafone 5G readies for take-off

Vodafone’s 5G network will launch any day now. Spark wants you to know it already has New Zealand’s first commercial 5G service.

That’s only part of the story.

If Vodafone is about to dive headlong into the pool, Spark dipped a toe in the shallow end.

When it launches Vodafone will have over 100 5G towers in parts of the three biggest cities and in Queenstown. Spark’s network is restricted to what it calls heartland communities.

This is code for small South Island towns. More precisely; Alexandra, Westport, Clyde, Twizel, Tekapo and Hokitika. Collectively the population of these places is around 16,000.

Small reach

That is about one-third of one percent of New Zealand’s population.

Vodafone won’t have city-wide coverage in its launch cities. Even so, its network could cover getting on for half the population. Even a pessimistic look at the numbers suggests Vodafone will reach 100 times as many potential 5G customers as Spark.

That’s not all. Spark’s network only offers fixed wireless broadband. While fixed wireless might suit some people, most people would see it as a second rate alternative to fibre.

Tekapo and Clyde don’t have fibre, the other places do.

Not preferred 5G spectrum

There’s another angle to this. Spark’s network will use 2600MHz spectrum. The company says this is not its preferred 5G spectrum. Spark doesn’t own the spectrum, it belongs to Dense Air.

The number of commercial Spark 5G heartland community customers for the next few months will be measured in hundreds, not thousands. Vodafone probably expects to sign more customers in a single day.

Spark does also have 5G around parts of Auckland Harbour for the America’s Cup racers. But that’s a private network.

Fate has been cruel to Spark’s 5G ambition. Spark’s plan to show 5G leadership have been hit by three external forces.

First, there is the GCSB’s unwillingness to sign off on preferred partner Huawei building the network.

Spectrum

Second, the government has ignored Spark’s pleas to speed up the Spectrum auction. And third, Vodafone pulled a rabbit out of a hat when the parent company sold the New Zealand operation to new owners willing to invest early in a new 5G network.

Of course the idea carriers are jockeying to win a 5G race is ridiculous. The technology will be around for 10 years. Getting it right is more important than getting it first. Few customers will jump ship just because they have to wait a few months.

While there may be a small first mover advantage, the real winner will be the carrier that can make its network pay over the long haul.