The Commerce Commission wants to find and fix the pain points people have when dealing with telcos.

It’s a job the commission was given as part of a new regulatory regime introduced in 2018.

On the whole the customer experience with telcos has improved over the last decade.

Much of that improvement is down to increased competition.

Level playing field lifts performance

The arrival of 2degrees as a third mobile company and the demerger of Chorus from Spark have done much to level the playing field. This, in turn, meant companies have to work harder to retain customers.

Yet the magic of market forces has yet to improve all aspects of dealing with telcos.

Now there’s an opportunity to tidy up the loose ends.

Telecommunications Commissioner Tristan Gilbertson says: “We’ve been given a clear direction and new powers to improve outcomes for consumers.”

Remaining pain points

To get an idea of the remaining pain points, the Commerce Commission organised a consumer survey.

It found that 77 percent of those surveyed are satisfied with the service they get.

The numbers are broken down by brand. Customers are least happy with Trustpower and Vodafone, they are happiest with Skinny, 2degrees, Warehouse Mobile and the little local service providers.

The 77 percent satisfaction number does not sound as good if you flip it to find 23 percent are not satisfied.

Catching up with everyone else

Yet it is close to being in-line with other industries. Surveys here and overseas show customer satisfaction in general tends to range from around 80 percent to 90 percent, with a few rogue industries underperforming.

What’s more, it is a huge improvement on where satisfaction numbers would have been in the past. I’ve seen non-public surveys showing more people are unhappy than happy.

Which is great.

The survey shows customers tend to be happy with things like coverage, availability, speed, stability and price. They are less happy with customer service and technical support. Service quality has been a problem for years.

This should surprise no-one. New Zealand’s telecommunications companies have spent a decade competing on price, coverage and technical performance. None of them have ever thought to focus on providing the best possible customer experience.

Service problems

More than half the people surveyed (56 percent) said they had reported problems with their service in the last two years.

That’s not good. Worse, of those who reported a problem more than half (54 percent) said it took a lot of effort to deal with the company.

Again Vodafone was the poorest performer. Two-thirds of the company’s internet customers (66 percent) had a problem. Almost half of mobile customers (44 percent) had ‘issues’. One in five Vodafone customers had a billing problem.

Industry body the TCF (Telecommunications Forum) published a glass-three-quarters-full blog post from CEO Paul Brislen looking at the Commerce Commission research. He says the industry is already addressing some of the issues and that overall it is doing OK.

It is certainly heading in the right direction, but the TCF and its members,  shouldn’t rest until telecoms is just another unremarkable industry. It remains the most complained about sector in the New Zealand economy.

Outstanding pain points

Which brings us to the outstanding pain points the Commerce Commission would like to address.

Top of the list is dealing with a service provider. Anyone who has done this knows it involves spending a long time waiting for a call to be answered.

Skinny, the Spark brand that makes a point of providing little in the way of personal customer support, rates high. The more self-service and automation, the less need to talk to a customer service representative, the happier the customer.

The Commerce Commission would like to hear from consumers about their experience and to know which aspects of retail service quality it should deal with first. You can provide feedback at the Commerce Commission website.

Last week the Commerce Commission issued a draft decision on the value of Chorus’s regulated asset base (RAB). It set the value at a precise $5.427 billion.

The number is important as it sets the stage for the fibre company’s future revenue.

Or in the Commerce Commission’s language:

“It is part of the process for determining the maximum revenues the company will be able to earn from the operation of the Ultrafast Broadband network.”

Chorus wanted the asset value to be set at $80 million higher than the regulator’s figure. It made the case in its submissions.

Reduced maximum allowable revenue

The final difference is about one and a half percent short of that claim.

With these figures Chorus can expect a two to two and a half percent reduction in maximum allowable revenue.

Knowing it could have been worse for the company won’t please all the investors.

A long time brewing

It has taken a long time to reach this point. On my desk is a reporter’s notebook from mid-2017. Interview notes include mention of Commerce Commission moves to estimate the value of assets from before the fibre build started in the regulated asset price.

At that time, the interview source joked about people sitting around tables arguing about the resale value of old Chorus trucks and whether anyone would buy telephone poles.

It’s not an accurate representation of the process, but it paints an easy to understand picture.

Grumpy investors

You may hear grumpiness about the valuation process from Chorus investors.

Yet the company’s share price jumped 13 percent on the day the news was announced. The market has spoken and it says it likes what it heard from the Commerce Commission.

Getting the asset valuation right is more important than it may appear at first sight.

Private investors

The UFB network was a high profile public-private partnership where the government sought investment to build key infrastructure.

At the time, the project looked risky. Investors wanted a return that reflected the risk.

The project has been more successful than any early estimates. Investors have had a solid return. Yet they might not have done so.

There are investors who feel the valuation process retrospectively reduces the return on their investment.

How it looks

Whether this is true or not matters less than how it looks to the investment community.

Future governments may want to go back to investors to fund other projects. They will be less willing to invest if they think successful projects will be subject to a similar retrospective value reduction.

Which could mean the cost of private investment in government infrastructure projects will rise to reflect this.

In the same way, Chorus investors may feel reluctant about future investments in the network if the return on that investment is restrained.

New Zealand’s government is planning how to use the 6GHz band.

Decisions made this year by the Radio Spectrum Management, the government agency that decides how radio waves are used, will affect everyone who uses Wi-Fi at home or work.

Ideally, the entire 6GHz band will be unlicensed. That way we will all be able to make better use of Wi-Fi in homes and offices. Everyone will have a better computer and internet experience.

Yet spectrum is a limited resource. Everyone wants it, including a group of companies who want to sell it back to us.

Unlicensed for now

Vodafone, Spark and 2degrees want Radio Spectrum Management to set aside a slice of the 6GHz band they can use to boost their 5G mobile spectrum.

The big phone companies have money and political clout. But they are up against almost the entire technology sector including companies with even more money and worldwide political clout.

Apple, Microsoft and Google are among the tech giants who submitted to the RSM. The list includes another dozen names you may or may not know.

What’s at stake?

If you haven’t heard of Wi-Fi 6E yet, you soon will.

It’s an upgrade to the wireless network technology that pushes data around homes and offices.

The difference between today’s Wi-Fi and Wi-Fi 6E is like the difference between dial-up broadband and fibre. It’s faster, more reliable and less trouble.

Gigabit speeds

With Wi-Fi 6E, your home or office wireless network will run at gigabit speeds. Without it, the link from a device to the local wireless router can be the bottleneck between you and the internet.

Wi-Fi 6E connections will be more reliable and you’ll have less trouble getting the network to reach every part of your home or office.

The technology can connect many more devices at the same time.

Wi-Fi 6E solves congestion problems. There will be less interference from your neighbour’s Wi-Fi. This will make it easier for you to get a decent home or office network.

Among other thing you’ll get better streaming and better zoom calls.

Bandwidth

Despite its name, the 6GHz band runs from 5.9 to 7.1GHz. That’s 1.2GHz of wireless bandwidth to play with.

That is about four times the amount of bandwidth available to today’s Wi-Fi networks. In other words, you can expect roughly four times the network speed.

Because the 6GHz band is a higher frequency than the 2.4 or 5GHz bands used for today’s Wi-Fi, the signals don’t travel as far. This is why you’ll get less interference from other Wi-Fi networks in your immediate neighbourhood.

Today’s Wi-Fi channels are 40MHz each. The technology needs to have 160MHz channels to deliver the extra performance. That isn’t practical without keeping the entire 6GHz band unlicensed.

What’s happening with 6GHz overseas?

In many places around the world part or all the 6GHz spectrum band has been set aside for unlicensed use. In this context, unlicensed means you can use it for Wi-Fi.

The US, Brazil, Canada and Korea are among the nations who have announced they are allocating the entire 6GHz band for unlicensed use.

As a consequence, a slew of Wi-Fi 6E hardware is on its way. That’s coming regardless of whether our government keeps the 6GHz band free. You won’t be able to make full use of it if Radio Spectrum Management is swayed by the telcos.

New Zealand is not the only country lagging behind these leaders in making a decision. In June, Europe set aside the lower 480 MHz of the band for unlicensed use but held off on a decision about the rest of the 6GHz band.

That’s similar to today’s position in New Zealand.

An international ITU World Radio Communications conference is supposed to debate the issue and help align policies around the world. The problem with that is the conferences take place every four years. The next one is two years away. By then hardware companies will be preparing Wi-Fi 7 equipment.

Telecommunications commissioner Tristan Gilbertson is concerned about the way telcos are marketing their services as Chorus prepares to close local copper phone networks.

Yesterday he sent an open letter to the companies, in effect telling them to clean up their act.

The move comes after complaints from consumers that they are getting confusing or incomplete information about their technology options.

Ball of confusion

It can be complicated because there are two separate processes going on at the same time. Yet there’s evidence telcos are deliberately adding to the confusion.

First, from next month Chorus is able to decommission the local copper network in areas where fibre is offered.

It can’t turn copper off overnight. There’s a long consultancy period and an agreed process. People have at least six months from getting the first letter. They get two or three reminders from Chorus along the way.

Chorus wants to decommission copper in part because running two networks is an unnecessary expense.

There are areas where no-one continues to use copper. And other areas where the number of users is small. In these places the cost-per-connection of maintaining the network can be very high. And anyway,  a copper network is more expensive to maintain than fibre.

Goodbye public switched telephone network

The second process is the Spark is turning off its old-fashioned voice technology that uses copper lines. That’s the public switched telephone network or PSTN.

In both cases the changes mean people must find alternatives.

And that’s where things can get nasty.

Each of the three mobile phone companies sell fixed wireless broadband in competition with fibre.

Hello fixed wireless broadband

Fixed wireless isn’t as fast or reliable as fibre. Nor is it necessarily cheaper. Yet for many people it is good enough. Lucky fixed wireless broadband customers with good connections like the service.

Mobile companies like it in part because they can push their mobile phone networks harder and get a better return on their investment in towers and antennae.

They also like not paying the monthly wholesale fibre fee to the likes of Chorus, Enable, UFF or Northpower. This means they get a much better margin selling fixed wireless.

Which means the mobile companies push their fixed wireless options to customers and back-pedal on mentioning fibre. There are cases where telcos tell customers they don’t have a choice.

There are also cases where customers are told the changes are about to happen even when they could be months or years away.

Enter the Commerce Commission

The Commerce Commission only gets involved in cases when it gets a lot of complaints or queries from the public. It has had a lot of communication from people on the receiving end of misinformation.

There’s no question misleading marketing is out there. At times the deception is deliberate.

It harks back to when Telecom CEO Theresa Gattung talked at a conference about telecommunications companies being able to use confusion as a marketing weapon.

 

 

Last week Spark extended what it calls its ‘uncapped’ fixed wireless broadband footprint. It now reaches another 500,000 potential customers.

The company’s Unplan Metro plan, yes that’s right and yes, it does sound weird, is now available at 1.2 million homes. The expanded fixed wireless broadband footprint includes towns and the rural areas where it is more needed.

Spark says that covers around two-thirds of all homes and more than 10 percent of rural households.

Where fixed wireless scores

Fixed wireless broadband is an alternative to fibre broadband. It’s a great choice if you live in a place where you can’t get fibre.

Performance and reliability is not as good as fibre, but it is better than your practical alternatives.1

If you can get fixed wireless at your address – that is not always a given2 – it installs fast. Spark will courier a modem and you could be online within an hour of it arriving.

It may be worth buying a low-end fixed wireless plan if you have limited broadband needs or are on a tight budget. Spark has a Basic plan for $45 a month with 40GB of data.

That’s more than enough for almost anyone who doesn’t use streaming, video conferencing or online gaming. You’ll be able to make voice calls and handle a limited number of Zoom meetings each month.

Otherwise, for a lot of people fixed wireless represents poor value. In almost every case you’ll be able to buy a faster, more reliable fibre plan with fewer restrictions on data downloads for less money. A number of people were let down by fixed wireless broadband when working from home during lockdowns.

That’s the case even if you buy fibre from Spark, which is among the most expensive options on the market.

What you will pay

Spark’s 5G Wireless Broadband Plan with nominally unlimited data – see below – costs $95. If you’re not on Spark’s 5G networks, and at the time of writing few people are, you can get a 4G fixed wireless plan for $85. Chances are it will be fast enough to meet your broadband needs, but, unlike with fibre, there are no guarantees.

In comparison no-questions-asked 100Mbps unlimited fibre plan from Spark is $90. You can buy similar plans elsewhere for up to $20 less. Flip has a fibre plan that works out at around $60 a month.

An all-you-can-eat 1Gbps fibre plan from Spark costs $110. A mere $15 more than the wireless plan. That’s a faster speed that most people need. Yet it means there will never be any limits on your broadband activity even with a house full of internet fanatics.

Uncapped – that word doesn’t mean what you think it means

While Spark describes Unplan Metro as either ‘uncapped’ or ‘unconstrained’ data, that’s not the full story. In the small print there’s mention of a Fair Use Policy.

This is vague. You have to dig around to get a clear picture of what it could mean. But in simple terms it means Spark can kick you off if it decides you are using too much data.

In other words, it is neither uncapped or unconstrained in the usual sense of those words. The Commerce Commission may yet have something to say about this description.

Spark, Vodafone pushing fixed wireless

Spark, Vodafone, and to a lesser extent 2degrees are both pushing fixed wireless broadband as an alternative to fibre.

Spark CEO Jolie Hodson said earlier this year she would like to move between 30 and 40 percent of landline customers to wireless by 2023.

It’s a lucrative business.

Wireless services piggyback off the cellular networks used to connect mobile phones. It requires extra investment to support fixed wireless, but that’s incremental.

The technology bypasses the wholesale fibre networks. More to the point they bypass the fees charged by fibre companies. Spark and Vodafone make a higher margin from wireless broadband than from fibre.

In the past customers have had a mixed experience with wireless. Network upgrades and the switch to 5G will improve that, but the technology is not for everyone.


  1. That may not be the case once the new satellite services get out of beta. ↩︎
  2. Local towers can be full although Spark is upgrading its network fast so you may not need to wait long ↩︎

Chorus says the average connection speed on the company’s network hit 202Mbps at the end of June. That’s more than double the 100Mbps average speed in 2019.

A decade ago the average speed was 10Mbps.

Higher speeds mean users chew through more data. Chorus says the average customer on its fibre network used 500GB in June.

Chorus’ network recorded a peak data throughput of 2.97 terabits per second on the evening of the Queen’s Birthday holiday.

Comparisons

That’s high, but not a record. During the August 2020 Covid lockdown traffic peaked at 3.15Tbps. In comparison the streamed 2019 Rugby World Cup coverage saw throughput hit a high of 2.6Tbps.

The average fibre customer sees download speeds about 10 times those seen on fixed wireless networks.

Speed tests published in the recent autumn 2021 Measuring Broadband New Zealand report show fixed wireless broadband speeds average 25Mbps around the clock and fall to 21Mbps during peak hours.

The report notes that dropouts are infrequent across all technologies, but people with ADSL or fixed wireless broadband will see them more often than fibre users. It also says average download speeds on fixed wireless dropped 25 percent during the March Covid-19 lockdown.

Steady connection speed improvement

There are two reasons for the continual improvement in average speeds. First, a steady flow of customers switching from copper-based internet to fibre.

This continues, although the pace of fibre uptake is now past its peak.

Chorus says it increased the number of connections on its fibre network by 29,000 in the last quarter. At the end of the previous quarter MBIE reported there are 1.2 million connections across all fibre networks. Uptake now sits at a tick over two-thirds of the people who can connect.

The other reason for the improvement is that fibre customers upgrade to faster plans over time. Chorus says it added a further 14,000 gigabit or Fibre Max connections during the quarter. There are now 166,000 gigabit connections. That is 20 percent of the total.

Asia Internet Coalition, a Singapore-based lobby group says its members may leave Hong Kong if a new doxxing laws comes into force.

AIC members include tech giants Facebook, Google and Apple.

The group worry that legislation could make them criminally liable.

Doxxing is when people publish private details about online personalities. It can be as simple as identifying the real name of someone using a pseudonym.

It could also refer to revealing addresses, phone numbers or other details used to trace and identify people.

Doxxing victims

In recent years people have weaponised the practice in Hong Kong to the point where there are thousands of victims.

People have used doxxing to scare activists off pro-democracy protests. On the other side, protestors have revealed the names of police or court officials who acted against protestors. It has also been used against journalists.

When private details are published people may find themselves on the wrong end of threatening calls or other intimidating behaviour. Sometimes this includes attacks on family members. Doxxing can lead to identity theft.

Hong Kong’s courts have found the effects can be severe and long-lasting.

The proposed privacy law amendments aim to outlaw doxxing and force social media companies and websites to take down personal information.

Psychological harm

The Hong Kong government proposes to change the existing data privacy legislation to include doxxing acts committed with the “intent to cause psychological harm”.

A conviction would be punishable by up to five years in prison and a fine of HK$1 million.

As things stand, Hong Kong’s officials can make employees of social media or other websites criminally liable.

The AIC objects to the definition of doxxing used in the proposed law. It also worries services like Facebook and Twitter might face liabilities when doxxing happens on their services.

In a letter, the AIC says the only way tech companies could avoid punishment would be by withdrawing their services from Hong Kong and ceasing to invest in the territory. It is not clear whether these companies make significant investments in Hong Kong.

New Zealand’s government plans to give consumers more control over using the data about them that companies and organisations collect and store. This is the idea of a consumer data right.

Similar rights exist in other countries. From our point of view the most important is example is Australia. Our rules look set to follow a similar model.

Today Australia’s consumer data right covers banking. Soon it will cover power companies. Over time it will extend to other sectors.

One sector at a time

New Zealand plans a similar step-by-step approach.

In banking a consumer data right means if you, say, found a cheaper mortgage at a rival bank, you could ask your existing bank to send them your records.

This makes it easier to shop around for services. It should help consumers make better decisions.

It should work well in banking. New Zealand’s big four banks have something called the API Centre. This was set up in 2019. It’s a common series of standards for payment account information. The scheme is voluntary and is open to other finance sector companies.

Last year the Commerce Commission suggested a data right for mobile customers looking to move from one network to a rival. Mobile customers often lack the information needed to comparison shop.

In general it is hard to move consumer data between companies and organisations at the moment.

Consumer data right needs rules

Rules are essential for this kind of initiative.

Commerce and Consumer Affairs Minister David Clark says the government is working on the regulatory structure needed and plans to introduce legislation next year.

He says: “Any data shared through the consumer data right will only take place with a person’s informed consent, and would be strictly used for the reasons agreed upon. For example, if a person was seeking financial advice, they could ask their bank to share data, such as transaction information, with their chosen adviser.”

It’s an opt-in service. You can choose to use it, but don’t have to.

Clark says there will be safeguards put in place to that companies receiving this data can handle it safely and securely.

This is likely to be the hardest part of the exercise.

To make data rights work, the government has been working on something it calls the Digital Identity Trust Framework. This is, in effect, a set of rules to identify people online.

Skinny, Vodafone and Flip all chase broadband customers looking for low prices. How do the uncapped fixed wireless broadband plans compare with the lowest cost fibre option?

Skinny now sells an uncapped fixed wireless broadband plan for $60 a month. It’s $10 cheaper if you are a Skinny mobile customer.

Vodafone has a similar product selling for $65 a month. Again, it’s $10 a month cheaper if you have a mobile plan.

These two new uncapped deals give the broadband market a new burst of competition.

At first sight they are roughly in-line with the least expensive fibre broadband plan. That would be Vocus’ Flip brand.

Flip will sell you an unlimited fibre connection for $14 a week. That works out at $728 a year. Skinny’s fixed wireless costs $720 a year.

Similarities

The two have more in common than price. Flip customers living in Chorus fibre areas get a connection running at 50 Mbps down and 10 Mbps up. In other parts of the country the down speed is 30 Mbps.

On a good day Skinny and Vodafone fixed wireless customers will see similar speeds.

In both cases the speed is more than enough to stream Neon or Netflix. There’s headroom for Zoom video conferences while others are online. Children should be able to do homework while parents work from home.

Differences

You’ll notice the last but one paragraph starts with “On a good day…”. That’s because fixed wireless broadband speeds can change over time. Everyone in an area shares the same wireless spectrum. If a lot of users connect at once, the performance drops.

The most recent Measuring Broadband Report notes the average speed of fixed wireless through the day is 25 Mbps, but the average goes down to 21 Mbps at peak times.

Average is an important word here. There will be people who get above average speeds while others will get below average speeds.

21 Mbps is enough

Even the lower 21 Mbps speed is good enough for streaming video. Yet you may run into problems, fixed wireless broadband is less reliable than fibre. The Measuring Broadband report found no regular outages on fibre. Fixed wireless did not do as well.

While this might spoil your viewing or online gaming, it’s not a big deal. Surveys show urban fixed wireless customers are almost as satisfied with their service as fibre customers.

Latency can be more of a concern. This is the time it takes for a signal to travel to its destination and back. Fibre is low latency. Fixed wireless is, in comparison, high latency. It means online games react slower to your actions. If you work from home it means more lag in video conference calls. Mind you, in video calls this lag is rarely a deal breaker.

The uncapped fixed wireless broadband small print

There is one huge difference between fixed wireless broadband and a low-cost fibre account from a provider like Flip.

When Flip says unlimited plans, there are no ifs, no buts, no qualifications. That’s not the case with fixed wireless.

Both fixed wireless service providers talk about fair use. Vodafone calls its plan Unlimited but that’s not the right word. It’s hard to find the fair use policy on the Vodafone site. This link will help.

The important part says:

“If your usage of our services materially exceeds the range of estimated use patterns, we will consider your usage to be excessive and/or unreasonable. We may contact you to advise you that your usage is in breach of our Fair Use Policy, and request that you stop or alter your usage to come within our Fair Use Policy.”

You couldn’t describe that as clear. Skinny uses different words but it amounts to the same thing. Both tell you unlimited does not mean there are no limits.

Location, location, location

You can buy Flip’s unlimited fibre plan anywhere on the nationwide fibre network. At the moment that’s over 82 percent of the country. In a couple of years it will be close to 90 percent of New Zealand.

Although the mobile data network has a broad reach, unlimited fixed wireless broadband plans is urban areas only. And there’s a limit on how many connections there can be in any given area. Fixed wireless service providers manage performance by limiting the number of connections.

In other words, you may not be able to get fixed wireless at your address.

Flip unlimited fibre costs about the same as today’s uncapped fixed wireless broadband plans. It’s usually faster and always more reliable. No-one is watching to see how much data you use.

The fixed wireless service providers have closed the price-performance gap with fibre ISPs. Wireless may suit your needs better than fibre, but for most people, Flip is a better deal.