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Spark esim Samsung Galaxy Watch 4

Spark is the first New Zealand carrier to support embedded Sim or eSim cards. It’s a version of the Sim card that, instead of slotting in, is hard-wired into some of the latest phones and smart watches.

If you bought a 2018 iPhone, you have an eSim. Likewise it is there in the recent iPad Pro and Apple Watches. There’s also an eSim in the Samsung Galaxy Watch 4.

The list of eSim-equipped devices is growing fast, but for now Spark only supports a handful of devices: Samsung Galaxy Watch 4 and iPhone XR, XS and XS Max. Owners of other suitably equipped devices will need to wait.

eSim in Galaxy Watch 4

Spark timed today’s launch to coincide with the launch of the Galaxy Watch 4. Spark offers what it calls the Unlimited Wearable Plan to customers buying the watch but they must also have a Spark phone plan.

The Unlimited Wearable Plan gives customers data, calls and texts for $15 per month. Spark says unlimited data, calls and texts which means after you’ve downloaded 22GB  Spark will drop the data speed to a lower rate.

If you manage to get through more than 22GB of data on a watch you deserve a medal, especially as you must already have a phone to get the Spark plan.

New iPhone owners can activate their eSim with Spark using a QR code. If you already have a suitable iPhone, you’ll need to visit a Spark store to have your current mobile number and plan switched to the eSim. This leaves the card slot free to take another number or plan. It doesn’t have to be with Spark.

This is a beach head for the eSim in the New Zealand market. Spark’s move will spur its rivals to get a move on with their plans. Vodafone has already hinted it has something on the way.

Lots of reasons to like eSims

One advantage is that there’s no need to stuff around removing and installing fiddly little cards. This is handy for phone owners, but essential in tiny devices like smart watches. It’s also important for industrial users and others wanting to use cellular connections in their Internet-of-Things devices.

Another feature of the eSim is that it allows a phone owner to add a second account, possibly from another carrier. This would be useful if you often travel overseas or if you need to work in a part of New Zealand only serviced by one carrier that’s not your first choice. Some people use this to keep separate work and private connections on a single device.

Spark’s eSim press release.

A new unlimited mobile plan from 2degrees can be yours for as little as NZ$40 a month if you are on a shared account. If only one person pays the bill it’s NZ$85. This makes it the best bang-for-buck mobile plan in the country, but there are fish-hooks in the small print.

Unlike rival unlimited offers from Spark and Vodafone, the new 2degrees unlimited plan allows hotspots and tethering.

Yet a sensible journalist might suspect something is up when a press release comes with a footnote attached to the word unlimited.

That’s because unlimited has a non-standard meaning in the 2degrees English dialect. While you may think the word means all-you-can-eat data, at 2degrees it stands for 40GB then the data hose becomes a dripping 1mbps tap.

On top of that, the small print warns: “hotspotting speeds may be reduced further during periods of network congestion”.

So, it’s not unlimited in any usually accepted sense.

That said, the new 2degrees unlimited plan is generous. It is also a better deal than you’ll get from the big mobile carriers.

A monthly 40GB data cap, that’s what we’re really talking about here, is more than you’re likely to need if you use your phone for mail, browsing the web and running everyday apps.

It’s also plenty if you hotspot or tether for similar use. Laptops and iPads can often get through more data than phones.

The 40GB cap is not going to get you far if you watch a lot of streaming video. Even if you stick to modest resolution video, you’ll get through your entire month’s allowance in a couple of days. Choose high-definition video and 2degrees will throttle your connection before the sun goes down on day one.

Small print aside, the 2degrees unlimited mobile plan is beyond competitive. Assuming you get decent coverage on the network, it’s a bargain. The deal is especially good for families sharing a single account. That 40GB cap is per person. Which means you can get all the phone and mobile data four family members need for NZ$160.

Huawei

At the New Zealand Herald Juha Saarinen writes about the HCSEC report in The real reason Huawei shouldn’t be in 5G networks:

“The report from oversight board for Britain’s Huawei Cyber Security Evaluation Centre (HCSEC) makes it clear that clever, secret backdoors in the Chinese company’s equipment is the least of anyone’s worries.

“Instead, it’s old, unsafe and bug-infested software, bad coding practices, and little or no effort by Huawei to sort out some seriously deficient processes and practices.”

Overnight, Huawei’s status went from clever enough spy on networks undetected to bungling clowns.

The report is damning. It’s not about a few weak points here and there. Bad code run through Huawei’s software like the word Blackpool in a stick of seaside rock.

The UK has known this for seven years.

Bad software is everywhere

On one level it’s not a surprise. Poorly-written software is common. It runs the world.

Some of the best-known software names have or had dodgy code including Microsoft and IBM. Enterprise software often holds together with digital chewing gum and paper clips.

Shoddy software lies behind most computer security problems. Attackers find and exploit holes in poor code.

Critical infrastructure

That’s the problem with Huawei. Its network products are part of critical infrastructure. Criminal or hostile-state-controlled coders could find their way into those networks.

Huawei network kit has always looked advanced compared with rival brands.

The NATO Cooperative Cyber Defence Centre of Excellence underlines this:

“It is currently the only company that can produce ‘at scale and cost‘ all the elements of a 5G network, with its closest competitors Nokia and Ericsson not yet able to offer a viable alternative.”

Now it looks like Huawei cut too many corners to get out in front.
The HCSEC report is a wake up call.

Hopefully everyone watching is getting their own house in order. Experience suggests otherwise.

Fixing the mess

In theory, Huawei can fix this mess. It has acknowledge the report and says it will spend $2 billion in a programme to fix the problems.

The UK’s National Cyber Security Centre isn’t confident that will happen. It also fears any fixes that Huawei makes may not make their way into products used in networks.

Huawei has had seven years to fix problems. It’s done nothing.

Last year the National Cyber Security Centre warned the company. According to the report, Huawei made “no material progress” on identified problems.

The HCSEC oversight board say it wants to see “sustained evidence” of better software engineering and cyber security “quality” before it gives Huawei a tick.

HCSEC report not about spies

None of the flaws found in Huawei’s offering is to do with Chinese state intelligence.

That was the reason for setting up HCSEC in the first place. It’s why Huawei faces more scrutiny than other equipment suppliers.

That poses an interesting thought: How would Huawei’s rivals look if they were subject to similar investigation? Until then, there’s no logical reason to assume they are any better.

I write about Huawei New Zealand’s long-term role in the nation’s mobile sector for the New Zealand Herald.

Huawei has played a central role in New Zealand’s telecommunications infrastructure for a decade. The company’s New Zealand deputy managing director, Andrew Bowater, says it started working with 2degrees four years before the telco’s network was switched on in 2009.

The 2degrees partnership played a crucial role when in 2013, Telecom, now Spark, chose Huawei’s hardware to power its 4G mobile network. Bowater says; “We wouldn’t have won that without 2degrees, we wouldn’t be here today without them.”

That relationship cuts both ways. Huawei provided 2degrees with the money needed to build its network with a vendor finance arrangement. Bowater says the two companies passed an important milestone in 2013 when a local bank bought the debt off Huawei.

Huawei’s relationship with Spark went deep. The two worked together to break new ground, they were the first to use 700 MHz spectrum for a 4G mobile network. New Zealand got that ahead of the world. Likewise, they were early getting 4.5G technology to market.


Read the full story in the New Zealand Herald.

fibre-optics

On Thursday Chorus released its proposed unbundled fibre pricing for industry feedback. Would-be unbundlers responded with a noise resembling what you might hear when placing an electric guitar in front of an amplifier: a loud howl.

This was always going to happen.

New Zealand’s telecommunications regulations mean that the fibre networks must, by law, be open for unbundling from the start of 2020.

Unregulated, for now

For now, the unbundling process and the prices wholesale fibre companies can charge is not regulated. The idea is that the industry can hold commercial negotiations. If that doesn’t work, then the regulator will step in.

Unbundling worked well for some ISPs when Telecom was forced to unbundle the copper network over a decade ago. ISPs installed their own hardware at an exchange and paid Telecom a monthly access fee.

This worked well for a number of reasons. First, the service providers could cherry pick the most lucrative neighbourhoods. Second, there weren’t many exchanges and each exchange served a large number of customers. Third, the monthly access fee was regulated.

Bitstream then and now

It turned out that the price was considerably lower than the fee Telecom charged for bitstream access. Bitstream access was, to a degree, similar to the service ISPs now buy from New Zealand fibre companies.

The gap between these prices left ISPs with enough room to offer competitive prices to their customers or take the difference as increased margin.

Unbundling fibre is different. Instead of hundreds of exchanges each serving thousands of customers, there are thousands of fibre nodes each serving a handful of customers.

The other big difference is the way we price fibre services. Today’s layer 2 prices are regulated. Prices depend on the level of service, but typically they run from around $40 to around $65 for a gigabit service. The Commerce Commission based its pricing structure on a fibre company’s costs.

Difficulties

Now, this is where things get difficult for would-be unbundlers. The input cost difference for a wholesaler between operating a layer 2 service and an unbundled layer 1 service is pennies, not dollars. That $40 monthly access fee might drop to $38 or thereabouts if it was regulated along the same lines as a bundled line.

This doesn’t leave an unbundler with enough margin to play with.

Despite the unattractive underlying economics two telcos, Vocus and Vodafone, joined forces to push an unbundling programme.

Since late last year they’ve been showing a demonstration of what the technology might look like. They’ve also been dropping unsubtle hints suggesting that: ‘unbundled fibre had better be cheap’.

Like copper only different

Scratch the surface and its clear their thinking is the difference between bundled and unbundled fibre should be in line with things in the copper world.

Chorus’s proposal is that unbundling service providers pay a monthly access charge of $28.70 per line. This covers the fibre line from the customer to the nearest node, Chorus calls these nodes ‘splitters’. Usually 16 customers connect to each splitter.

On top of that, Chorus wants to charge $200 a month for the connection from the splitter to a central point where the service providers can connect the unbundled service to their own networks.

Unbundling at scale

You don’t need to be good with arithmetic to realise that this only works for a service provider if a lot of customers at any splitter want to buy their connection. A would-be unbundler would need to have more than a dozen connections at each node for prices to drop below the basic regulated bitstream monthly fee.

Although keep in mind here that an unbundled fibre line might operate at a blistering 10Gbps. That’s a service that could command a premium retail price.

To no-one’s surprise Vodafone and Vocus made it clear they don’t like the proposed price. A press release from the pair has the headline: “Chorus machinations could put competitive UFB on ice”.

Maths

In it, a clearly angry Vocus CEO Mark Callendar says the maths just doesn’t stack up. He is right. But the legislation was designed that way. There isn’t enough margin between layer 1 and layer 2 to make an ISP happy.

An access price that would please Callendar, at a previous media function he told me it should be under $20, would leave the fibre wholesale companies under water. They’d be bankrupt in no time and that would put critical national infrastructure at risk.

Back to the release where Callendar says: “…the Commerce Commission will now need to intervene, it’s as simple as that. The UFB network was designed to be unbundled and ultimately is an asset that the government has helped fund.”

The Commerce Commission was destined to be dragged into this row from the moment Vocus and Vodafone first announced an intention to unbundle.

Intervention

If it does intervene and assuming it follows a similar cost-based model, the would-be unbundlers are going to be as disappointed then as they are now. The economics of fibre unbundling mean it is a path that’s not worth the trouble, at least as far as residential customers are concerned.

Now, it’s quite possible that the spat you see on the surface is all there is. Yet there’s something else at play. Since the fibre network started, most of New Zealand’s service providers have raced to the bottom on price. It’s about the only point of difference they feel able to compete on.

As Vodafone CEO Jason Paris has said to me in a previous interview, they have competed away all the profits in the broadband business.

Thin margins

Margins are razor thin. Unbundling had potential to fix that. It’s also an opportunity for two high profile telcos to position themselves publicly as against New Zealand’s telecommunications regime without actually saying they are against the regime. Make no mistake, that’s the real object of their ire. 

In the public statements so far, they’ve poked the finger at Chorus.

There’s something in that. But Chorus is a creation of a telecommunications regime that the previous National government set up. The Labour government continued the same regime. There’s a broad political consensus that our telecommunications market is working as designed.

You could see Chorus as the government’s proxy in these matters. A useful punching bag if you don’t like the rules. 

Equivalence

One part of the disliked regime is something called equivalence. The idea is that Spark, Vodafone and Vocus get exactly the same prices, products and services from fibre companies as a five-person regional ISP working in rural Taranaki.

The big firms hate that. They like to use their clout and economies of scale to negotiate better terms from suppliers. Regulation stops them.

Consciously or unconsciously, Vodafone and Vocus hope the government is listening. That’s why so much of their rhetoric about unbundling uses politician-pleasing words like ‘innovation’ and ‘competition’.

Competition

Unbundling is clearly a competitive1 move, but it’s not really innovation in the sense we normally use the word. Assuming it is doing everything right at the back-end, the only practical option an ISP has to innovate with unbundled fibre services is to remove some of its capability from certain customers.

Remember this as the war of words heats up in coming months and the various parties troop into the Commerce Commission. They’d like to get a lower price for unbundled fibre.2 Who wouldn’t? But what they really want is to take back a little control and restore profit margins.

Disclaimer: Chorus pays me to edit the Download magazine and a weekly newsletter. It didn’t pay me to write about unbundling. Indeed, this post doesn’t reflect anyone’s opinion other than my own, certainly not Chorus’. No one vetted or otherwise approved this. Any mistakes are down to me. Your corrections or alternative opinions are welcome.


  1. Spark has options with its fixed wireless broadband. These should ramp up when 5G arrives. Vodafone ought to be able to do the same, but the local firm isn’t getting the investment it needs from Vodafone Group. Unbundling is a cheaper option. ↩︎
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  3. I’d expect the Commerce Commission to insist wholesale fibre companies propose a single per-line price in place of the more complex line and splitter tariff. ↩︎