“Just seven percent of Australian broadband users subscribed to 100Mbps services, compared to 29 percent of New Zealanders.”
A report in today’s Commsday quotes S&P Kagan’s research on Asia Pacific 100Mbps broadband usage.
However, it isn’t clear if S&P is only counting users on 100Mbps or those on 100Mbps and higher speeds. The company hadn’t responded to a request for more information at the time of writing.
This compares with figures from Chorus which says that 71 percent of mass market customers on the company’s network have connection speeds of 100Mbps or higher. Mass market in this context means consumer and small business accounts.
The S&P Kagan number for New Zealand stacks up with local figures. In round numbers, about half the people with fibre access choose fibre plans. We know the numbers for other fibre areas are roughly in line with Chorus. We also know that fibre reaches at two thirds of the country at the moment. So give or take a point or two, 29 percent seems right.
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.
New customers signing for Vodafone’s home fibre plans can get an Ultra Hub Plus modem as part of the deal. This means they get a connection on the carrier’s mobile network straight away. Lucky customers will connect via 4G. Less fortunate ones may have to do with a 3G connection.
Ultra Hub Plus is an interim fix while customers wait for fibre. It means their connection is not disrupted during the installation. Once they are on the UFB network, it then acts as an always on backup connection. Like a lot of these things it is good in parts.
Vodafone’s press release says the Ultra Hub Plus makes for a smoother switch to fibre.
It goes on to describe the Ultra Hub Plus as a “game changer”: isn’t everything these days? The release also says it is super easy to set up and use and a seamless experience.
I tested the device and found Vodafone isn’t exaggerating on those counts. Yet it’s not all wonderful. The Hub’s fixed wireless broadband performance is only so-so.
When you sign up, Vodafone dispatches an Ultra Hub Plus modem by courier. Open the box and along with the modem and its power supply are a couple of sheets of paper. One says: “Five minute easy start”.
Experience says that a marketing department that uses words like “game changer” then adds both ultra and plus to an otherwise straightforward product name might not take a lot of care over a claim like five-minute easy start.
In practice, Vodafone’s claim is modest. I had a working connection in four minutes.
You plug the device in, then hit the power button. The instruction sheet says the modem’s wi-fi is active in around 90 second and the 4G or 3G connection is ready in three minutes and thirty seconds.
Both sets of indicator lights switched on more or less on schedule.
The next step is to connect wireless devices to the modem. Vodafone includes another sheet of paper with a QR code. All you need to do is point an iPhone or iPad camera at the code and those devices will connect.
If you use Android, you’ll need to download a QR app first. Depending on your circumstance, this could take you past the five minutes. But not by much.
There are three Ethernet ports on the back of the Ultra Hub Plus, so connecting a laptop or desktop with a port is a breeze. Connecting by wi-fi is also straightforward. Either use the scan code or press the WPS button and find the Hub in your wi-fi router list.
This is as easy and fast as Vodafone’s marketing promises.
It is not the end of the set up story.
While the set-up speed for Ultra Hub Plus is impressive, the broadband speed is not great.
As you can see from the screen shots, I get around 13 mbps down, less than 5 mbps up.
While higher speeds are possible in theory, Vodafone says it throttles the speed to 12 down and 6 up. At the same time, it tweaked the hardware to deliver a decent level of service.
How decent? In practice the throttled, optimised throughput is plenty for acceptable high-definition television streaming. When I first tried, we saw plenty of buffering. Once things started the modem seemed to cope with the stream.
Next I tested Sky’s Fan Pass and BeIn Sport on an iPad. In both cases the apps stumbled at first. Each gave me an initial error message. Fan Pass thought there wasn’t a network connection for a few seconds. BeIn went blank.
None of this happens with my normal connection. It might scare less tech-savvy users, but everything worked fine only seconds later.
In both cases the picture was acceptable soon after. There was a little stutter at first, then it settled down. I even managed to get two streams running at the same time. Which says a lot about acceptable baseline speeds for non-specialist home internet users.
Vodafone Ultra Hub Plus verdict
There’s a clever balance here between ‘enough broadband to tied you over’ and ‘not clogging the mobile network with fixed wireless traffic’ or ‘encouraging customers to choose this instead of fibre’. Vodafone has the mix spot on for what the Ultra Hub Plus promises on the box.
The Ultra Hub Plus’ ability to act as a back-up connection for when fibre fails is also smart.
Fibre doesn’t break down often, except in a power cut which, ironically, would also take out the Ultra Hub Plus. In that case then you’ll need to use a mobile phone. Many of us are so dependent on broadband that an alternative channel, that’s still able to handle Netflix is an insurance policy.
What will move New Zealanders from copper to Ultra-Fast Broadband?
Or as we used to say in the 1990s: “What is the UFB killer app”?
Video is the simple answer. It’s not the only answer. We’ve been using video communications tools such as Facetime and Skype with success since the early days of ADSL. Video conferencing worked up to a point on dial-up connections. It worked better on ADSL and performs fine on most copper-based VDSL connections.
The same goes for streaming video entertainment. You can, at a pinch, watch it on all but the most feeble connection. True, you get a better experience on a faster connection. And there’s little point trying to watch a high definition movie if you have slow internet.
High definition video
Yet even HD video works fine on a VDSL connection. You need to have rarified tastes to need more than, say a 30 Mbps connection.
Sure, 100 Mbps plus is necessary if more than one person in your house is watching at the same time. And, yet, Vodafone does specify that you need a 100 Mbps connection to watch Vodafone TV.
Fibre improves the video experience mainly because it is faster. It’s also more reliable, less prone to outages.
Speed is the real killer app for fibre-based broadband. Faster broadband means you can do things that were either marginal or flaky with copper connections.
What about wireless?
Many fixed wireless broadband customers are able to get speeds that are fast enough to watch streaming video. Most of the time. There are issues.
First, fixed wireless bandwidth is shared. That means if you live in a neighbourhood with lots of other fixed wireless broadband connections, the performance can drop when everyone else is online. The can mean peak evening TV viewing hours.
Second, for now, the fixed wireless broadband plans on sale in New Zealand have data caps. That means you only get so many video viewing hours each month. That’s fine if you’re a light TV watcher, but is a deal breaker for many.
Even when everything is working fine, fixed wireless broadband connections tend to be slower and less reliable than fibre connections. Technology may change that — one day. For now, you can’t be guaranteed there will always be enough speed.
2degrees has signed a multi-year backhaul contract with Chorus. The deal replaces a mix of services from providers including Spark and Vocus.
The network will connect UFB points of presence and data centres to the international network. 2degrees says it now has a fully diverse and highly resilient network that transports voice and data worldwide.
Mark Petrie, 2degrees chief fixed officer says: “By combining 100Gbps links into our network we’re future proofing our ability to support the ever-increasing data demands of the country’s largest enterprises, for whom having this capability is critical.”
The deal marks the first national customer to sign for Chorus’ 100Gbps nation-wide fibre backbone network. Chorus’ chief commercial officer, Tim Harris describes 2degrees as an important strategic partner for Chorus.
While it is an important business win for Chorus, there’s an even greater significance. It marks the national wholesale network provider’s move away from regulated monopoly services into a more competitive space. This gives Chorus a route away from settling down as a mere utility provider into more commercial areas.