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We live in a world of real-time connection and blurred boundaries between the workplace and home. Telecom needs to operate in the same world says Simon Moutter.

Telecom’s chief executive has been in the role for a year. He was previously the company’s chief operating officer, leaving in 2008 to head Auckland International Airport.

The four years he was away saw a profound transformation within Telecom, not just because it devolved its network services to the new and separate Chorus.

Network, connectivity

“It is all now about the network and connectivity,” says Moutter. “We’re now business-centric to all data networks, whether that’s cellular, fibre, bitstream or anything else. Our job’s to provide ubiquitous access to an all data world.”

The internet-of-things is the major change Moutter’s noticed.

When he left in 2008 the world of connectivity was based on minutes; time talking on a telephone.

Now connectivity is around gigabytes, he says.

Quickening pace

The pace of telecommunications change is only going to get quicker. While there are currently seven billion connected cellular devices, “we suspect that in five years there will be 50 billion connected devices,” says Moutter.

This will be in everything from fridges, to health to education.

“We haven’t scratched the surface,” he says.

From Telecom’s point of view, “this means we will have to keep pace with the changes, lead where we can, respond where we miscue,” he says. “It is hard to make every decision you make the right one.”

Being in a position to refocus if a business decision is found to be wrong is almost as important as making a correct decision says Moutter.

Telecom’s obligation

Telecom also feels a deep sense of obligation to New Zealand as one of its largest corporations; which compared to other telecoms providers is only operating in this single market.

“Our business will ultimately do well if New Zealanders are doing well,” he says. “If we’re delivering services that New Zealand businesses need, and they’re successful, we’ll be successful too. That is part of the shared journey that we’re on.”

Moutter says technological change is stress the old business models of every business, and some aspects of the information revolution stresses people and companies.

In this environment, a strong Telecom will have the money to reinvest in capability, and the whole country will be better off he says.

Part of Telecom’s journey has been to adjust, “and learn to operate at the speed of life,” he says.

In part 2 of Alastair Thompson’s interview, Simon Moutter talks about Telecom’s attitude to the government’s GCSB legislation.  

hawaiki-archi-800x400Hawaiki’s plan to build a 14,000km trans-Pacific submarine cable edges closer thanks to a multi-million dollar deal with TPG signed in Australia.

TPG Telecom said it will buy Australia-US and Australia-New Zealand capacity on the cable. Both parties are coy about the financial details, however, TPG said in a press release it expects the project means a capital expenditure of between $US10m and $US20m for each of the next three financial years from 2014.

Hawaiki‘s cable will link Australia and New Zealand to Hawaii and from there link to the US west coast. The design will allow Pacific island nations to join the network.

Early customer announcements of this nature are usual as would-be submarine cable operators enter their fund-raising stage.

Chorus general manager, marketing and sales Victoria Crone says the 30/10 and 100/50 Mbps UFB services now on sale are only the start. She says Chorus is: “looking at offering a 200 Mbps service within a year”.

It doesn’t stop there. Crone says Chorus is trialling a residential gigabit service and expects to offer that in the near future.

And then? She says, “Maybe a 10 gbps pilot for home users”.

Chorus doesn’t offer UFB services directly to home users. The company is building the network in about 70 percent of the UFB coverage area, that’s essentially urban New Zealand. The company then sells wholesale fibre services to ISPs who in turn sell them to business and residential customers.

Faster rural broadband too

Crone also says New Zealand’s rural internet users can look forward to better speeds in the future. Chorus, along with Vodafone, is building the RBI (Rural broadband initiative) network which will fill in much of the country not served by the UFB network.

On paper RBI customers can expect to see connection speeds of at least 5 Mbps. In many cases new fibre to the node and fibre-connected fixed wireless towers will deliver rural services.

Crone says while today’s rural customers, who are moving from dial-up connections to broadband, will like the new services, they’ll quickly find it not fast enough for their needs. She says Chorus is already looking at plans to offer a better rural service.

Although Crone wasn’t specific this might include extending the fibre footprint and offering faster wireless data technologies.

Vodafone NZ  now offers Ultra-Fast Broadband (UFB) plans, but only to some customers.

This follows a fibre trial that began in mid-2012. Customers who put their details on the Vodafone UFB waiting list have been invited to sign for a special VIP offer.

Vodafone has formalised a complete commercial residential UFB offer, though this is not yet listed on the company website and centre representatives are referring to it as a special VIP offer.

Prices appear to be in line with existing Vodafone plans and those offered by other UFB retail service providers.

Vodafone UFB price premium

Vodafone offers three base plans: 80GB, 150GB and 250GB – each available at 30Mbs/10Mbs and 100Mbs/30Mbs. The faster plans attract an additional $30 per month price premium, with a phone line being an optional extra for $20 a month.

As with some of Vodafone’s existing ADSL plans, there is a $30 a month discount for customers who have a mobile connected to a Vodafone on-account plan.

Based on what we’ve heard, the highest and lowest plans are as follows:

  • UFB 30Mbs/10Mbs – 80GB data, no phone line – $95 (or $65 for those with a Vodafone on account mobile)
  • UFB 100Mbs/50Mbs – 250GB data, phone line – $169 (or $139 for those with a Vodafone on account mobile)

Customers signing up receive free service for two months and a Vodafone Station router. A term of 12-months applies with a $199 fee for early termination.

Southern Cross Cable Network says it has successfully implemented Ciena’s 100G transmission equipment across its network. Sales and marketing director Ross Pfeffer says the move increases capacity to 2.6Tbps on the two cables. It increases the total capacity between Australia, New Zealand and the USA to 12Tbps.

Telecommunications experts, including former Telecom NZ CTO Murray Milner, have suggested New Zealand will need additional submarine capacity within a decade. Advances in submarine cable technology and gradual switch in demand from the USA to Asian online destinations suggest capacity is not the main issue for cable users.

Is Southern Cross enough?

Senior ISP and telco engineers lie awake at night worrying about relying on a single monopoly provider. In engineering terms it is a single point of failure. Maybe not a single point of failure. Southern Cross operates two cables, which means there’s a degree of redundancy.

But two lines still leaves telcos and New Zealand’s growing digital economy relatively vulnerable. This explains why there’s a groundswell of industry support for rival cable projects.

The Telecom NZ, Vodafone and Telstra-planned Tasman Global Access will add capacity between Auckland and Australia. Some in the industry fret that Telecom NZ’s TGA stake and its half ownership of Southern Cross amounts to new monopoly.

Hardly a co-incidence

It’s almost a year since the last press release from Southern Cross. The latest announcement comes just one day after would-be submarine cable rival Hawaiki Cable announced plans to land is trans-Pacific cable in Whangarei.

As others have noticed, that is not a co-incidence.