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Tutela’s Consistent Quality percentages

Tutela says Vodafone has New Zealand’s fastest mobile data. It wins with downloads and uploads. The mobile industry research company says 2degrees has the highest consistent quality and the best latency.

When it comes to raw mobile speed Vodafone is well in front of Spark and 2degrees. Its median download speed is 23.9 Mbps. Uploads come in at 9.2 Mbps.

Spark trails with a median download speed of 20 Mbps. That’s not far behind Vodafone, yet it has the slowest upload speed at 7.7 Mbps.

Tutela speed test results June 2020

While 2degrees has the slowest median download speed at 19.5 Mbps, that is only 4.4 Mbps behind the leader. The company is second when it comes to upload speeds with a median of 8.1 Mbps.

Tutela reports on consistent quality

According to Tutela the 2degrees network is good enough for applications like high definition video calls, streaming video and mobile gaming for 85.6 percent of the time.

Tutela calls this measure ‌Excellent Consistent Quality. The mobile carriers are only compared in places where they all have coverage.

Spark follows a fraction behind meeting the standard for 84.9 percent of the time.

Vodafone brings up the rear on that measure, reaching the required level 81.9 percent of the time.

The numbers are so close that it might help to think of the scores as a draw with Vodafone a tick behind.

2degrees wins on latency

2degrees had the best one-way latency result at 24.5 ms. It was followed by Vodafone at 25.9 ms. Spark in third for a median one-way latency of 29.4 ms.

Looking at these numbers it seems there is not much in it. Although Vodafone and 2degrees do better than Spark in almost every measurement, no single carrier is a long way ahead or behind the pack.

The report also shows that if Vodafone’s December 5G launch has made any impact, it is mainly at the margins.

To get these results Tutela took 3.89 billion network quality measurements including 1.36 million speed tests.

Tutela carried out tests for the June 2020 report between March and May of this year. As New Zealand was in lockdown for much of this time the numbers may not reflect everyday mobile performance.

An infrastructure sharing agreement with Vodafone means 2degrees can expand its network reach by around 200 towers.

Most of the towers are in less densely populated areas. These are places where, until now, customers would need to roam on the Vodafone network.

The agreement between the two telcos echoes the network sharing work being done by the Rural Connectivity Group. Vodafone and 2degrees, along with Spark, are partners in the RCG.

Vodafone has installed Multi Operator Radio Access Network (MoRAN) hardware on the towers. They allow 2degrees to use its own spectrum.

Performance gains

2degrees says customers will notice improved download speeds, as well as better video calling and streaming.

Adding these towers means the carrier can fill in the remaining gaps in the company’s coverage which. Before the agreement the network reached about 98.5 percent of the population. Yet it covered considerably less geographic area than Vodafone or Spark.

The carrier says the move will see an end to national roaming and all customers will “receive the full 2degrees experience”.

Martin Sharrock, 2degrees’ chief technology officer, says; “Using our spectrum in these areas for the first time is like adding a new motorway for our customers to use, they move from sharing our partners’ network to a network dedicated just for 2degrees. This is possible without building new cell towers.”

2degrees smart move

It’s a smart move by both companies. Vodafone gets to earn a handy extra revenue stream without undermining its competitive position. Although carriers don’t look at the revenue generated per tower, that extra income means the 200 or so more remote sites will do a better job of earning their keep.

Meanwhile, 2degrees gets to extend its reach without the need for capital expenditure.

Capital is going to be tight. The company will need to build a 5G network. That’s expensive, but majority shareholder Trilogy International Partners is struggling.

In the past 2degrees has used vendor financing from Huawei, its network equipment partner, to expand its coverage. With Huawei locked out from building a 5G network in New Zealand that avenue is also closed.

Regulating termination rates introduced ten years ago kick-started mobile market competition in New Zealand. Now it’s time to review the rules. Don’t expect to see much change.

To no-one’s surprise the Commerce Commission’s draft review of mobile termination rates recommends they stay regulated.

A termination rate is the price one phone company charges another when a call from one network is made to a customer on another network. Mobile termination rates affect calls between the Spark, Vodafone and 2degrees networks.

Until a decade ago mobile termination rates were unregulated. Carriers could charge what they liked. And they did. New Zealand termination rates were high.

This stifled competition and meant mobile calls were expensive by international standards. That in turn meant people here didn’t use their phones as much as people overseas.

Calls between networks

Before regulation Telecom NZ, now Spark, and Vodafone, would charge customers less to call others on the same network than the cost of calling another network.

In the jargon of the time they offered have different prices for on-net and off-net calls.

Mobile termination rates mean customers on the least popular network end up, over time, paying more to use their phones.

This acted to stop people choosing 2degrees, in part because potential customers feared friends might call less often.

In 2010 the government stepped in. Termination rates have been regulated since then.

The move triggered a dramatic drop in call prices to the point where New Zealand moved from being an expensive place to use a mobile phone to a relatively cheap place.

Flat playing field

Most of all, the regulation flattened the playing field. This meant the third mobile network, 2degrees, could grow beyond being a niche player.

In turn this further boosted competition and paved the way for cheaper calls more innovative price deals.

Today we have a vibrant, competitive and innovative mobile market.

Mobile termination rate regulation almost didn’t happen. Ten years ago Telecom NZ and Vodafone negotiated a voluntary agreement with government to lower charges. The Commerce Commissioned agreed.

It was all set to go. Then Vodafone began selling the most aggressive on-net plan ever seen in New Zealand. The Commerce Commission reversed its earlier decision.

The case against mobile termination rates

Fast forward to today. The Commerce Commission now says there may be a case for dropping regulation of termination rates for SMS text messages. That’s because of the popularity of alternative over the top services like WhatsApp.

This external pressure has reduced txt prices to the point where many plans offer customers unlimited texting at no extra cost. High charges are unlikely to return.

The Commerce Commission says voice call termination rates should remain regulated because there are few competitive alternatives.

That’s true on one level, but it’s not straightforward because today’s mobile battleground is all about data. With lots of data, customers can make voice calls using free or cheap over the top services.

And anyway, voice calls are not as popular as they were ten years ago.

If, in a world without regulated mobile termination rates, a carrier attempted to charge higher voice call rates, the move to data calls would accelerate. The trend away from voice calls would speed up. So, it’s possible we no longer need to regulate.

On the other hand economist Donal Curtin thinks the regulation needs another look.

The Commerce Commission now wants feedback on its MTAS draft review findings.

Vodafone’s rural broadband unit Farmside says a wave of new customers joined immediately after June 1. That’s Moving Day in the dairy farming calendar. The day when farmers traditionally move equipment, stock and people to new farms.

Farmside general manager Jason Sharp says the business has now passed 15,000 customers. Most connect via RBI fixed wireless but many Farmside customers have fibre or satellite connections.

Sharp says Farmside saw a 74 percent increase in the amount of data used by RBI customers and a 35 percent increase in satellite data during Covid-19 lockdown levels 3 and 4.

Farmside says it was able to continue connecting remote customers during lockdown and prioritised work for those who needed a physical installation.

Pandemic changed rural broadband

Earlier this year Sharp noted that pandemic had a huge effect on rural broadband.

He says: “As I reflect back on what was an incredibly busy period, it was also a turning point for rural communities forced to go online in ways never experienced before. I’m proud of what we’ve been able to achieve. I also see lots of opportunity for the future of the internet in the country.

“In the past month we’ve seen stock auctions go online, our major agriculture exhibition become the Fieldays Online event and online discussion groups replace face to face gatherings. This comes with a broader reach in terms of markets – but also relies on good internet connectivity so that parts of the country aren’t left behind.”

Rural broadband challenge

That’s the challenge facing rural internet providers like Farmside. Despite continued government investment in infrastructure, the fixed wireless broadband technology used for most rural connections was never intended for the kind of intense use that has become an everyday fact of life.

When RBI was first planned about 12 years ago, the idea of streaming Netflix or interactive games to farms and other remote locations wasn’t in anyone’s sights.  And that’s before we get to streaming the Rugby World Cup.

At the time fixed wireless broadband looked more than adequate for most rural business applications. Since then the amount of data used to run a farm has exploded.

Sharp says: “… satellite connections have become even more important for those who aren’t within the 35km range of rural wireless broadband – or because the landscape renders line of sight to a cell tower impossible.”

New satellite options are coming online which should improve matters for the most remote users. And there are potential upgrades for fixed wireless that can improve data speeds and allow for larger data caps. Yet the best way to level the playing field for rural broadband customers would be to extend the reach of fibre networks further into the bush.

IDC vice-president Hugh Ujhazy says 5G is going to be huge for the mobile carriers 

 He says: “We’ve done a telco capex [capital expenditure] forecast for the Asia-Pacific region excluding China and Japan. The fastest growing single capex item is the build out of 5G radio access networks. It’s going to grow at 93 percent compound annual growth rate [CAGR]  over the next five years. That’s in a context of a decline of about 1.6 percent CAGR decline in in their total capex. So, it’s obviously going to be big for operators.” 

For Ujhazy, 5G remains mainly an enterprise play, but there is also a consumer play in the mix. He says carriers need 5G technology because it simplifies and streamlines their job of provisioning and managing a cellular customer. They also need it so they can keep offering the increase in performance and capacity that we’ve all come to expect. 

Ujhazy has changed his view of network slicing in the last year. “I didn’t believe in the private networks that are possible with 5G. Vodafone Global changed my mind. They said they have about 160 different requirements – that’s expressions of customer interest – already on the table. So there will be a place for it. I’m not sure how that will make sense over time. But it is coming.” 

No overnight change

Another aspect of 5G is that it won’t be an overnight revolution. He says: “It is going to be with us for the next 20 years. There’s no need to run up to the buffet to grab a quick bite, it will be here for a while.  

“Everything about the landscape for 5G is a co-existence strategy with 4G. And that 4G network isn’t going anywhere probably for the next two decades. When we look at things like broad widescale coverage over long distances, a lot of that is best left to 4G.”  

 The big change will come with stand-alone 5G. Once the millimetre spectrum is available, that will be where customers get to see the promised high speeds. He says: “It is only going to be there in pockets where it is needed. You’ll see a blended environment in terms of the Gs for some time.”  

This mixed environment goes for all the Gs: 3, 4 and 5G. Ujhazy says each of them does something interesting. “The 3G is used today for M2M [machine to machine], for cellular connected devices that will probably move to narrowband. Some markets are retiring their 3G, but the message here is all about the overall portfolio of connectivity options you now have as a user. 

“It’s the same for enterprise customers and consumers. You have everything from fibre to Wi-Fi 6 to 4G and 5G. We’ve got more choices than ever before and building the right strategy for that is the challenge we face.”  

Sydney-based Hugh Ujhazy is vice president, IoT and telecommunications for IDC. He leads the research company’s analysis of fixed and mobile network services for the Asia-Pacific region. This story was originally published in The Download, the Chorus stakeholder magazine