FTTH/Quad-play in New Zealand

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mgcarley

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#64539 17-Jul-2010 13:37

I have an FTTH ISP in India and having recently returned to NZ after several years of being away in a variety of countries, to find the state of Broadband in this country as bad or worse than when I left, I have decided that I want to build one here too - FTTH, quad-play (Broadband, phone, IPTV/VOD and Mobile) all-new network, the lot.

Speed: We should be able to offer up to 1Gbit/s within our network (though realistically this sort of speed might be limited to your city for now). On International traffic, we should be able to offer 100mbit/s. We plan to peer with everyone who will let us, including APE, HIX, WIX and so on, and offer unlimited plans at a decent price (though it has not yet been determined whether unlimited will require a fair-usage policy or not... in India for about US$50 per month we can supply about 120GB of data before we get concerned).

Most of this is already organized (we have fiber access, phone numbers/VOIP, 400 international channels, a movie-catalogue and NZ mobile spectrum available to us, now looking for re-broadcast rights to NZ from Mediaworks and TVNZ).

But I'm anticipating the build of new cables out of NZ to help support us - so I'm putting together a proposal for some new cables which I hereby name TAINZ (Taiwan-NZ), SINZ (Singapore-NZ) and INZ (Indian-NZ). Probably none of these cables would land at Auckland, instead landing somewhere on the west coast (North Island) and somewhere like Dunedin or Invercargill (South Island).

These cables may have forks off to Australia, but frankly speaking, all the current government seems interested in is competing with Australia: the reason given to me by a National MP on Thursday for the corporate tax reduction from 30% to 28% was "because Australia is reducing from 30% to 29%".

The Labour MP I spoke to on Friday agreed that we basically aren't except for labour/talent itself... as far as bringing more corporates here, we should be competing with countries like Phillippines, Singapore, India, Pakistan and so forth - it sounds odd, but reportedly existing NZ call centers are quite successful.

Anyway, despite this, we have already entered in to talks with Telcos at the other end (fortunately, I have a head start because I already deal with these companies in India), but now I just have to convince the right folks in NZ's government, and we might be best to find a good place to flow to from the east coast (the USA seems the most logical choice, but why not Chile or something?).

Interestingly, according to my discussions with TelstraClear, if I purchase my wholesale bandwidth from them, I am automatically peered with them and their customers - they number their customers at 250,000, Telecoms at 600,000 and "the rest of NZ ISPs" at 250,000 combined.

What would be different?

Unlike other ISPs, you can pick and choose what service you want.

If you *just* want phone service, we would offer a completely digital service with all the same features as your normal phone (free local calls, 3-way calling, caller ID etc), and we expect this to cost a consumer around NZ$15-20 a month. National and International calls would probably be about on-par with Skype (4 or 5c a minute to NZ, Australia, HK, Singapore, China, most of Europe, USA, UK, Canada etc, and a variety to other countries).

If you *just* want broadband, we would have data plans running at 100mbit/s with data blocks between 3GB and 600GB available - currently our prices in India would put the price range at NZ$2.50 for 3GB and NZ$300 or so for 600GB. Our unlimited plans range from NZ$80 for 5mbit/s with no data cap to NZ$330 for 100Mbit/s. All traffic within our network (customer to customer or from anything we host, cache or mirror) would be free or charged at something like NZ$0.03 per GB. There would also be options for night users and so on: I have a price sheet available on Google Docs for our Indian service, but since I can't post links yet... goo dot gl slash 5x9z.

If you *just* want IPTV, of course the free-channels should be available anyway, in HD (just like freeview, only... without the interference), and a selection of other channels, including ethnic channels (Hindi and Indian-regional, Chinese, Japanese, various bits of Europe etc) for a small fee, though I don't have pricing available for getting that here yet.

And mobile. We anticipate that we should be able to do mobile at between NZ$0.25 and NZ$0.30 per minute to any network in NZ. If possible, a $20 top-up should get you maybe 60 or 100 minutes of talk-time (depending on if we can get the other players to give us better termination rates than have already been quoted to us), with probably the equal amount of minutes provided to call on-net (as in, between customers).

At the moment, we anticipate using the same model of customer-equipment that we use in India, which is the Zyxel FSG2200HNU - it comes loaded with stuff, so best to stick with it unless someone can suggest otherwise.

We anticipate that basic wiring per house should cost around NZ$200, and we may pay 50% of that (so install charge of $99 or something). We would hope to achieve similar pricing in NZ to what we have in India at least for the broadband, and if we do manage to get our own cables, bring the prices way down.

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#352652 17-Jul-2010 13:44

P.S. I apologize for the slightly commercial nature of the post but this is what I want to do and I'd like to gauge the level of public support for the idea.

sbiddle

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#352656 17-Jul-2010 13:52

I'm not quite sure where to start. Sounds like commercial suicide to me.

hellonearthisman

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#352657 17-Jul-2010 13:52

I think your dreaming, $200 to connect fibre to my house, you know that would have to be an underground cable from the exchange. Last time someone in my area had a fibre installation offer it was more around the $8k and that was considered cheap.

From what you have written, your looking at spending billions and billions of dollars.

cyril7

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#352659 17-Jul-2010 13:54

just like freeview, only... without the interference

We anticipate that basic wiring per house should cost around NZ$200, and we may pay 50% of that (so install charge of $99 or something). We would hope to achieve similar pricing in NZ to what we have in India at least for the broadband, and if we do manage to get our own cables, bring the prices way down.

Hmm, I presume you are talking about wiring with fibre, as you mention this previously and you also utter speeds like 100Mb/s. If fibre is what you talk about then based on pricing estimates and models by the likes of Murray Milner and associates and also based on the prices current early and real trial NBN costs in Aus are, expect a 10-20x increase on your $200.

I watch with interest the responses to your proposals.

I'm not quite sure where to start. Sounds like commercial suicide to me.

+1

Cyril

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#352688 17-Jul-2010 15:18

Interesting post. Like sbiddle I don't know where to start (being Saturday afternoon and all), but... you are likely talking of investments in the billions of dollars range.

There are no FTTH infrastruture to speak of in New Zealand, so your cost per home would be a lot more than $200.

Unless you can get your own cable up and running, international connectivity prices in New Zealand through the Southern Cross will make inviable any unlimited offer - just look at what Telecom suffered with Big Time and Go Large.

Unlike India, New Zealanders consume a large amount of content that comes from overseas - including downloads of "Linux ISOs" via torrents. People on Telecom Big Time were paying $49/month and downloading a couple of terabytes. And don't think you can "educate" users. They want the cheapest possible offering for the most they can use. Even Fair Use Policies would be a problem.

Using TelstraClear as backbone is a good move. But remember both TelstraClear (250,000) and Telecom (600,000) are not peering freely - they charge for this "privilege", so you will automatically peer with one, but still have costs.

In terms of mobile, watch out for news this coming Monday. It could inspire you in some ways.

mgcarley

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#352714 17-Jul-2010 16:31

hellonearthisman: I think your dreaming, $200 to connect fibre to my house, you know that would have to be an underground cable from the exchange. Last time someone in my area had a fibre installation offer it was more around the $8k and that was considered cheap.

From what you have written, your looking at spending billions and billions of dollars.

You misunderstand. The basic wiring in the house is about $200. The cost to get it to the house is varies by region, but in the Waikato at least is about $4000 average, depending on where and how we dig (which, naturally, includes rural areas. Urban areas are much cheaper because of the relatively close proximity to each other).

But that $4000-8000 cost is already taken care of and we have already secured fiber routes to many neighbourhoods - we just need to do the last few-hundred meters. Again, depending on region depends on the exact price to get it from the neighbourhood PoP to the actual customer premises.

sbiddle

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#352717 17-Jul-2010 16:34

mgcarley:
hellonearthisman: I think your dreaming, $200 to connect fibre to my house, you know that would have to be an underground cable from the exchange. Last time someone in my area had a fibre installation offer it was more around the $8k and that was considered cheap.

From what you have written, your looking at spending billions and billions of dollars.

You misunderstand. The basic wiring in the house is about $200. The cost to get it to the house is varies by region, but in the Waikato at least is about $4000 average, depending on where and how we dig (which, naturally, includes rural areas. Urban areas are much cheaper because of the relatively close proximity to each other).

But that $4000-8000 cost is already taken care of and we have already secured fiber routes to many neighbourhoods - we just need to do the last few-hundred meters. Again, depending on region depends on the exact price to get it from the neighbourhood PoP to the actual customer premises.

You don't get much of a wiring job in a house for $200. Maybe in India but certainly not NZ.

My 5c worth says you're dreaming - nobody in their right mind would even contemplate deploying a FTTH network in NZ that will be directly competing with a government funded deployment. Who's providing the billions are you are going to need for your network? What mobile spectrum do you have management rights for?

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mgcarley

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#352718 17-Jul-2010 16:38

cyril7:
just like freeview, only... without the interference

?

Freeview is still wireless and/or satellite, therefore, subject to interference.

Hmm, I presume you are talking about wiring with fibre, as you mention this previously and you also utter speeds like 100Mb/s. If fibre is what you talk about then based on pricing estimates and models by the likes of Murray Milner and associates and also based on the prices current early and real trial NBN costs in Aus are, expect a 10-20x increase on your $200.

I watch with interest the responses to your proposals.

The NZ government is doing basically the same as Australia, but worse. What I'm proposing is merely to build on to the end of existing fiber networks which are in place all over the country. So far, we could wire up over 67% of Hamilton pretty much immediately, and the network operator has agreed to build the rest if we can build a good business case, but we're planning to run a pilot to 100 homes in the city first.

I'm not quite sure where to start. Sounds like commercial suicide to me.

+1

Cyril

Wow... bit more pessimistic than I was hoping. While the initial outlay is high, it's not that hard to make that back in 5-10 years depending on how much you charge. But we need not charge $45+ to cover the costs - of that I can assure you.

mgcarley

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#352721 17-Jul-2010 16:43

sbiddle:

You don't get much of a wiring job in a house for $200. Maybe in India but certainly not NZ.

My 5c worth says you're dreaming - nobody in their right mind would even contemplate deploying a FTTH network in NZ that will be directly competing with a government funded deployment. Who's providing the billions are you are going to need for your network? What mobile spectrum do you have management rights for?

In India it's even cheaper, actually. These are NZ prices. And we would not be competing with it, we would be working alongside it. The government basically won't build where we do IF we build an open-access network.

The cost for us actually doesn't go in to the billions. Backhaul is in place already, as are main fiber rings around many of the cities. We only need to build on the very end.

Re the mobile networks, I can't name the company due to an NDA, but then again, there are only 4 licensees last I knew.

sbiddle

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#352725 17-Jul-2010 16:56

Mind explaining how you can wire a house for triple play services for $200 here in New Zealand?

mgcarley

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#352726 17-Jul-2010 17:01

freitasm: Interesting post. Like sbiddle I don't know where to start (being Saturday afternoon and all), but... you are likely talking of investments in the billions of dollars range.

There are no FTTH infrastruture to speak of in New Zealand, so your cost per home would be a lot more than $200.

Unless you can get your own cable up and running, international connectivity prices in New Zealand through the Southern Cross will make inviable any unlimited offer - just look at what Telecom suffered with Big Time and Go Large.

Unlike India, New Zealanders consume a large amount of content that comes from overseas - including downloads of "Linux ISOs" via torrents. People on Telecom Big Time were paying $49/month and downloading a couple of terabytes. And don't think you can "educate" users. They want the cheapest possible offering for the most they can use. Even Fair Use Policies would be a problem.

Using TelstraClear as backbone is a good move. But remember both TelstraClear (250,000) and Telecom (600,000) are not peering freely - they charge for this "privilege", so you will automatically peer with one, but still have costs.

In terms of mobile, watch out for news this coming Monday. It could inspire you in some ways.

Even *if* it cost billions of dollars, I live in a city where something like 5 of the top-10 richest people in the world live, and even more in the top-100. Money is not hard to find.

While you are right in that FTTH infrastructure basically doesn't exist, there is FTTN - TelstraClear has that, which significantly reduces my overall deployment costs. Telstra will also deliver me bandwidth anywhere in the country if their network already goes there for no extra charge, whereas had I purchased from FX or someone like that, I'd be paying for International + Auckland to Hamilton (or where-ever I wanted to start).

In addition, Telstra claims that, despite Telecom owning half of SxC, they are utilizing 67% of the lit capacity, whereas Telecom is utilizing the rest (meaning that presumably TC are easier to deal with, and probably the other suppliers who can offer SxC capacity use TC as a point of contact or something).

I have been in contact with Pacific Fibre re: their Australia cable, but we're also talking to Bharti about an India-NZ link, Chunghwa about Taiwan-NZ and Singtel about Singapore-NZ. Since I buy a lot of bandwidth from Bharti already AND they have funds for things just like this, if the business case is there they might be inclined to help out.

As for the large users, we would anticipate that if users are trying to leech a terabyte of international capacity, we'd be within our rights to throttle their speed to 256k when the usage got to an "unreasonable level" - say 100GB - and from what I've seen $50-60 for 100GB would be quite a bargain. Considering that we would be highly interested in bringing back the NZ-traffic for free/cheap model, there's also no reason that as more people joined our network and/or networks with whom we directly peer, speeds would go up and costs would come down.

Of course, numbers are all theoretical at the moment and based on a different scenario so we'll see with our pilot how much it all comes to in practice and how people do actually use the connections.

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#352732 17-Jul-2010 17:11

If you can deliver it, I'll buy it.. Just dont expect me to pay in advance :-)

I'm a geek, a gamer, a dad, a Quic user, and an IT Professional. I have a full rack home lab, size 15 feet, an epic beard and Asperger's. I'm a bit of a Cypherpunk, who believes information wants to be free and the Net interprets censorship as damage and routes around it. If you use my Quic signup you can also use the code R570394EKGIZ8 for free setup.

mgcarley

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#352733 17-Jul-2010 17:12

sbiddle: Mind explaining how you can wire a house for triple play services for $200 here in New Zealand?

In an urban area, from my gate to where all our jacks are is about 20m - 1 cable going to 1 jack plus ends comes to between $70 and $80. Plus labour and incidentals.

Internal wiring of your house is not our responsibility, so naturally I'm not including that - like I said, a basic install - and the CPE comes with 802.11n, so you might not even have to install ethernet cables to your PC/laptop.

Most people won't have an ethernet port in their TV, so all they need to do is install new or re-route existing Co-Ax, but even then not that many people (in older houses) have Co-AX connectors in the wall - they just run it around the skirting board. You can buy Co-Ax for a few cents per meter.

As for VOIP, well... just change your cables from BT to RJ-11 or buy a $9 adapter and keep everything plugged in as it is - again, depending on how your phone is set up. In my house all our phones run from 1 jack. In many cases this is not so and so some other configuration/installation may need to be done.

cyril7

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#352737 17-Jul-2010 17:14

The NZ government is doing basically the same as Australia, but worse. What I'm proposing is merely to build on to the end of existing fiber networks which are in place all over the country. So far, we could wire up over 67% of Hamilton pretty much immediately, and the network operator has agreed to build the rest if we can build a good business case, but we're planning to run a pilot to 100 homes in the city first.p

I wish you the best with your endevour but somehow I see many obstacles in the NZ context.

Even putting aside the UFB strategy that CFH is putting forward, the other major player who may pop your vision is good old Telecom, who currently has fibre to within 1-1.5km of 80% of houses in the country, so I suspect they could put a hole in any $ concept you have at every turn.

In an urban area, from my gate to where all our jacks are is about 20m - 1 cable going to 1 jack plus ends comes to between $70 and $80. Plus labour and incidentals.

Internal wiring of your house is not our responsibility, so naturally I'm not including that - like I said, a basic install - and the CPE comes with 802.11n, so you might not even have to install ethernet cables to your PC/laptop.

Most people won't have an ethernet port in their TV, so all they need to do is install new or re-route existing Co-Ax, but even then not that many people (in older houses) have Co-AX connectors in the wall - they just run it around the skirting board. You can buy Co-Ax for a few cents per meter.

As for VOIP, well... just change your cables from BT to RJ-11 or buy a $9 adapter and keep everything plugged in as it is - again, depending on how your phone is set up. In my house all our phones run from 1 jack. In many cases this is not so and so some other configuration/installation may need to be done.

As mentioned earlier your costings might work in india, no one is going to do what you think for those prices, then again I probably dont have a clue.

Cyril

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#352738 17-Jul-2010 17:14

mgcarley: As for the large users, we would anticipate that if users are trying to leech a terabyte of international capacity, we'd be within our rights to throttle their speed to 256k when the usage got to an "unreasonable level" - say 100GB - and from what I've seen $50-60 for 100GB would be quite a bargain. Considering that we would be highly interested in bringing back the NZ-traffic for free/cheap model, there's also no reason that as more people joined our network and/or networks with whom we directly peer, speeds would go up and costs would come down.

I would disagree with 100GB picture as Fair Use for a Quad-play. I am TelstraClear cable user, and currently use about 120 - 150GB month, which includes two people working from home full time, iTunes movies download, Mozy online backup, MSDN downloads, two VoIP lines (VFX and MyNetfone AU). We have a Media Center PC, three laptops, a Mac and a Windows Home Server with a couple of virtual machines. And we are probably not a typical family.

Put this fair use at 500GB for a quad-play and then it starts making sense. Revise this number up by 20% in 12 - 18 months.

Obviously mom and pop would use a lot less than this. My parents-in-law have two laptops, two VoIP lines and live within 5GB. But they don't do online backups, don't download movies from iTunes, and don't use anything heavy really.

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