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New Zealanders have three mobile phone networks to choose from. New Zealand sensors will soon have four dedicated Internet of Things networks to choose from. That’s a competitive market by any measure.

You can’t move in this country at the moment without someone talking about the Internet of Things.

Two weeks ago Communications Minister Simon Bridges spoke about a report commissioned by the New Zealand Internet of Things Alliance. The report says the IoT could be worth $2 billion to the economy over ten years. That may prove to be a conservative estimate, although it depends on how you define the Internet of Things.

The New Zealand IoT Alliance is part of NZTech. It is an umbrella group set up as the voice of the technology sector.

Accelerate IoT adoption

All the main local IoT players are part of the Alliance. It’s job is to accelerate the adoption of the IoT. That sounds like it’s a good thing. It is a good thing. But it is also about sales.

When tech firms promise something approaching nirvana it is wise to remember Virgil’s Timeo Danaos et dona ferentes. Loosely translated means fear the geeks even when they bring gifts. OK, Virgil was talking about the Danaans or Greeks, but the point stands.

Vodafone says it will roll-out an IoT network early next year in anticipation of explosive demand. The company will offer Narrowband-IoT, a low-power wide area network. It uses dedicated, licenced spectrum. Vodafone says its IoT technology is secure and will cover vast geographic areas.

Spark also plans a Narrowband-IoT network. It says the network will open this time next year.

The telcos will join two existing IoT networks already in operation here. Wellington-based KotahiNet and Australia’s Thinxtra.

Premium IoT technology

Vodafone technology director Tony Baird describes his company’s NB-IoT as a premium technology. He says: “It is supported by over 40 of the world’s largest mobile operators plus many more suppliers and innovators that serve the majority of the global IoT market.”

His last point is important. If a business wants to invest in the IoT, it needs to make bets that will last for the long-haul. There’s always a danger of choosing a dead-end IoT technology like Betamax or CDMA. Vodafone’s message is that you’re not going to get stuck with unusable technology if you follow its path. On the other hand, premium also means not cheap.

The Internet of Things is about connecting sensors and other devices to the network. This is something Vodafone has been doing for some time now. The company already has more than 1.4 million devices on its 2G phone network in New Zealand. It will oversee many times that number of devices around the world.

Overseas expertise

Vodafone is a multinational business. It is a natural first choice for multinational players operating in New Zealand. They won’t need to start learning all over again to set up a local IoT network.

Vodafone says the NB-IoT is the same technology it uses elsewhere. The company has already tested NB-IoT in the field in a trial with Nokia, its technology partner for the project.

Spark is also working on a narrowband network that has evolved from cellular phone technology. It is working with Kordia to build the network.

Connected farms

The company is using its Connected Farms project to roll-out pilot capabilities on farms in the Waikato.

Vodafone and Spark have a number of things going for them. They have brand recognition, market power and a considerable installed based to call on. Both have signification infrastructure already in place.

If Vodafone and Spark have a downside, it is that they are often not as nimble as smaller players. They may get around this by partnering with local specialists. The IoT is a natural fit with New Zealand’s Wireless Internet Service Providers.

Big data, big bickies

Spark’s trump card is the link with its Qrious big data and analytics operation. Sensors produce a huge volume of data. Helping customers make sense of that adds value.

However, the big telcos don’t have it all their own way. KotahiNet has already staked out ground with its $1 per sensor per month easy to understand flat fee approach. That may yet be important in this market. When you deal with thousands of devices, the unit cost matters.

Two other things are impressive about KotahiNet. First, although it is small, KotahiNet already has plenty of runs on the board. That means customers to act as brand ambassadors or case studies.

Also, the business takes a bottom-up approach to IoT. The big telcos are much more top-down. You can buy a starter kit in the KotahiNet shop for a few dollars. That way you can tinker with the technology before making a large financial commitment. This approach could prove to be powerful when it comes to building partnerships and reaching engaged business owners.

Sky TV to become Vodafone-SkyHere in New Zealand, television stories dominate the week’s telecommunications news.

Sky and Vodafone bow to the inevitable and call off their merger. Meanwhile TVNZ goes all in on streaming video.

For more than 40 years journalists have written about convergence. The telecommunication triple play idea: combining voice, data and television, is well over 20 years-old. I first heard about it in around 1990. That’s right, it pre-dates the commercial internet1.

Almost overnight, we’re on the other side of the revolution. Some bewildered people are looking back and wondering what happening. The rest of us wonder why it took so long to get here.

You say you want a revolution

The revolution is not that hard to understand, television uses electrical signals. They used to be analogue. Digital is better. Once TV was digital, it was only a matter of time before it became another stream of bits travelling through networks.

It took longer for the industry to grasp what that means in practice. Today we have Netflix and a cluster of junior would-be netflixen. We have binge viewing. We have on-demand viewing. Yacht races from across the world beam on to our mobile phones as we commute to work.

What we still don’t have is the choice and flexibility we get from other online media. That’s coming.

History lessons

If you look at the sweep of online history, a merger between Vodafone and Sky TV makes perfect sense. It made sense to the management and board of both companies. If you look at the deal with the eyes of a competition regulator, nixing the deal makes sense. It could have established a monster.

There is something odd about the Commerce Commission’s decision on the Vodafone-Sky merger. Yes, a merger would give one telco access to the crown jewels of sports programming. Yes, it could be exclusive access.

But Sky still has a monopoly on that material. A stand-alone Sky can cut an exclusive deal with a broadband company. Indeed, it’s quite possible that it will strike an exclusive deal with Vodafone. Today’s agreements and contracts between the two companies point in that direction.

Exclusive anyway?

So the Commerce Commission vetoed a merger because of something that will happen anyway. Am I alone thinking that is odd?

Whatever the logic, Sky and Vodafone have come to terms with the decision. The two issued a terse statement to the New Zealand Stock Exchange on Monday. It gave no reasons. But said they withdrew their High Court appeal protesting the Commerce Commission’s decision.

The marriage may be off, but the two companies remain good friends. The relationship is still on.

Free Sky Sport for Vodafone customers

In June Vodafone said it would give 12 months’ free Sky Sport to customers buying broadband and a basic Sky TV service. This is, more or less, the kind of arrangement the Commerce Commission worried about.

Elsewhere, Vodafone mobile customers can get a deal which includes free Sky Neon. And Sky is providing Vodafone with exclusive live coverage of All Blacks matches.

There’s a secondary commercial logic here, the phone company is now the team’s sponsor. Yet both deals have a whiff of the exclusivity that the Commerce Commission feared. Remember, in February the Commerce Commission said a proposed $3.5 billion merger would reduce competition.

Separate, but vertically-integrated

It said Sky and Vodafone had an opportunity to create a vertically-integrated business. That would give a single telco access to all popular sports broadcasting rights. There was a fear the market power wielded by the new business would lock out other potential bidders.

Now rivals fear the two non-merged companies are doing the same thing anyway. They are building a form of vertical integration without all the parts being in a single company.

The tragedy here is that, unlike Australia’s ACCC, our regulator can’t impose rules. That way it could OK the merger and insist the new company licence Sky content to all-comers.

There’s a ridiculous lack of broadcasting oversight in New Zealand. The Commerce Commission’s job is to ensure competition. We have intense telecommunication competition, but one company holds a TV sport monopoly.

TVNZ goes all-in on digital

From Monday, Television New Zealand will livestream channels One and Two. Viewers will be able to see all broadcast material over the internet on PCs, tablets and phones. Everything will be available online in HD 720p format. There will also be a new catch-up on-demand service.

Some material will be in box-set format for binge viewers. Programmes will be on Chromecast from next month and Apple TV later this year.

TVNZ plans to optimise its streaming service for mobile devices. It will also keep programmes available online for longer.

For now, there are no plans to do anything about television transmission. Although TVNZ says that could change depending on demand.

The ghost of Netflix

All these moves acknowledge the changing way people use television. The spectre of Netflix is somewhere there in the background.

The key problem for TVNZ is that it earns its revenue from advertising. This is more annoying and intrusive online than on broadcast TV.

If TVNZ wants to address Netflix head on, it might think about offering an ad-free paid option. Of course, it would need to have enough high quality material to make that viable. It could start by investing more in its news and current affairs programming.


  1. People started talking about the idea in the 1990s. I first heard the term around the time Kiwi Cable was building an HFC network on the Kapti Coast. The first serious attempts at triple play didn’t come until later. ↩︎

After reporting a series of poor results, broadband monitoring company TrueNet notes a welcome return to form for Vodafone broadband performance.

The latest Urban Broadband Report notes:

“Vodafone Cable connections show a 31 percent increase in NZ webpage average speed this month compared to last month. Vodafone Fibre shows a 29 percent increase month on month.”

In recent TrueNet reports Vodafone turned in poor numbers on both its UFB fibre broadband services and its own FibreX-branded HFC network. The performance drop-off was especially noticeable at peak times.

TrueNet Fibre Cable NZ April May 2017
Source: TrueNet

The similarity of the drop-off and the fast bounce back on both networks suggests something broke that Vodafone has since fixed. It is possible that the TrueNet performance monitoring helped Vodafone identify the problem.

Meanwhile, TrueNet has added Vodafone’s fixed wireless service to the Urban Broadband Report. This shows Vodafone fixed wireless customers get twice the speed seen by Spark and Skinny customers. Skinny and Spark manage more consistent speeds throughout the day.

TrueNet Fixed Wireless
Source: TrueNet

This story was first published for The Download Newsround, a weekly wrap of New Zealand telecommunications news that I prepare for Chorus. You can subscribe here

Vodafone fibrex

“What’s in a name? that which we call a rose
By any other name would smell as sweet”

– Juliet’s speech from Shakespeare’s Romeo and Juliet

Consumer makes an important point. It writes:

“People considering signing up for Vodafone’s FibreX service might be surprised to learn they won’t actually be getting fibre broadband.”

The new name for Vodafone’s rebranded cable service implies customers are getting fibre. There’s no getting away from that.

FibreX is not fibre

But they’re not getting fibre. Not fibre as New Zealanders understand the term in 2017. They get the old Vodafone hybrid fibre-coaxial.

The fact the term HFC includes the word fibre confuses matters. HFC is a long way from Ultrafast Broadband fibre. It is, in effect, a high-quality copper connection.

Vodafone’s HFC cable has been around for ever. The company picked it up when it acquired TelstraClear. Before that, the network’s name was Saturn. Even Saturn wasn’t the original incarnation.

Before Saturn it was Kiwi Cable. That company was a long ahead of the market in the 1990s. If my memory serves me well — readers may be able to clarify — the company produced its own TV show. How modern.

Pimp my copper

Vodafone pimped the HFC network’s software with an upgrade to DOCSIS 3.1. That means it has faster speeds1 than the old HFC network. But customers don’t see all the extra performance all the time.

That’s because, unlike a UFB fibre connection, FibreX customers share bandwidth. It’s like fixed wireless broadband in that sense. If a lot of people are on a cable segment at the same time, the speed drops. In contrast, when you have an old fashioned ADSL or VDSL copper broadband connection, there is a dedicated line from the cabinet to your house.

Even on a good day FibreX is slower than a real fibre connection.

Look at the latest TrueNet performance measured by time-of-day chart. It’s reproduced below, but you can see the chart better online.

Webpage download speeds
Webpage download speeds – data from TrueNet.

The FibreX speed is slower than any of the true fibre services. It is even slower than Vodafone fibre, which takes the wooden spoon in this TrueNet report.

Slow at peak times

More to the point, FibreX slows to a crawl at peak times. As you can see, it downloads web pages at about one-third of the speed you’d get from an Orcon connection.

It is clear, as Consumer says, the FibreX name is misleading.

The Commerce Commission cracked down on service providers calling fast broadband services ‘gigabit’.

That decision was overzealous. Service providers around the world use gigabit to describe their broadband services. They run at the same speed as those in New Zealand, in some cases they are slower.

Many of those countries have tighter regulatory regimes than New Zealand.

A gigabit connection is what service providers buy wholesale. The speed drops because service providers need headroom for network control.

If ISPs can’t describe broadband at 90 percent of a gigabit as “gigabit”, then Vodafone shouldn’t use FibreX. The broadband product is zero percent modern fibre.


  1. In theory DOCSIS 3.1 can shovel data down a pipe at 10 gigabits per second. Australia’s NBN find the technology exciting. Other Australians do not. ↩︎

Silverdale 4.5G cell siteCompetition and regulation economist Donal Curtin says in a blog post there may be unfinished business with the mobile termination rate.

The mobile termination rate is the sum one cellphone company pays another for calls going from network to network.

Curtin is responding to the Commerce Commission annual report on the telco market.

He writes:

I speculated last year that maybe it is time to revisit our regulated mobile termination rate: it’s still unrevisited, at a left-high-and-dry level by comparison to current overseas rates, for no obvious reason that I can see. And there’s an ongoing issue with the high cost of mobile data downloads to data-only devices.

It’s a good point. Some see the MTR as done and buried. Yet there were always plan to reset the rate. As Curtin points out, the charge in New Zealand is high by international standards.

Yet, I’d argue this is far from the most pressing piece of telephone industry regulation. I’ll write more about what should worry the Commerce Commission in another post.

Mobile termination rate

The mobile termination rate is a financial transfer between the three cellphone companies. Vodafone, Spark and 2degrees pay each other.

This was of vital importance when 2degrees was still a fledgling cellular company as it meant the company ended up paying a larger slice of its revenue to its rivals. This made it a barrier to market competition. In effect, the MTR rate penalised 2degrees for being smaller than its rivals.

What matters most about MTRs is not the total payment from one company to another but the net payment. As 2degrees’ market share increased, the net handover of MTR money decreases.

Competition barrier

If you had three players with identical market share, the net MTR transfers would be zero. We’re not at that point, but the market is moving towards it.

It speaks volumes that 2degrees hasn’t sought to raise the issue again in recent years. During the company’s early years it did a lot of lobbying about MTRs. That can be distracting to a business and imposes a different set of costs.

The lack of noise from 2degrees is not the only reason that MTRs are of less interest.

Curtin mentions mobile data. The cellular market is switching from voice calls to data use at a clip. Data is already more important than voice. In other words, the MTR has less impact. When the Commerce Commission last regulated the MTR, calls were close to 100 percent of the cellular business. Today they might account for 50 percent at most.

Underlining this switch, all three mobile carriers offer affordable unlimited voice plans. Skinny has unlimited calling plans starting at $30 a month. Spark’s and Vodafone’s start at $60. With 2degrees unlimited call plans covering New Zealand and Australia start at $50.

If carriers can deliver all-you-can-eat mobile plans at these prices, the MTR doesn’t seem to be a barrier to competition.

Sure, reducing the MTR would mean a flatter playing field, but in many respects the New Zealand cellular market works fine.