2degrees declares war on Vodafone and Telecom

By Steve Biddle, in , posted: 6-Dec-2010 21:02

In recent weeks 2degrees mobile have upped the ante in the battle over Mobile Termination Rates (MTRs) here in New Zealand. 2degrees have declared war on both Vodafone and Telecom by offering prizes to users in return for soliciting bulk inbound SMS messages on their network - prizes that are funded by 2degrees from MTR revenue, and no doubt leaving them with a tidy profit on the side due to the huge volumes of traffic that the competition is creating.

MTRs have been a controversial issue in New Zealand and 2degrees have been very vocal about their objections to the current charges and the on going Commerce Commission inquiry into MTRs which has now been under way for over five years.

For those who don't understand MTR rates we'll start with a brief rundown. When calls are made between telecommunications networks, money is handed over from one network operator to the other. This charge, known as an interconnection fee (or termination charge) is designed to cover the cost of the network operator delivering the voice call or text message to the end party (or the 'B' party in the telco world). This model is known as Calling Party Pays (CPP), and is used by the vast majority of mobile and fixed line operators in the world to connect calls between networks. An alternative method known as Mobile Party Pays (MPP) is used by mobile operators in some countries such as the USA. Under MPP no interconnection charge exists and no money changes hands, instead the receiving party pays to receive a call or SMS.

MTR rates have become a very hot topic globally in recent years as regulators have tried to force these rates down. Here in New Zealand 2degrees have taken issue with the charges and have been very vocal in the past year, to the point of walking away from the negotiating table and withdrawing all offers after they took issue at the Commerce Commission preferring to accept voluntary undertakings from Vodafone and Telecom in late 2009, rather than forcing price regulation into the marketplace as 2degrees wanted. As of December 2010, yet another investigation is under way, with regulation of MTRs expected to occur in 2011, with pricing to be set by the Commission.

Two weeks ago 2degrees launched a promotion known as "Text Me Race" that exists solely to exploit termination rates, generating both significant revenue for themselves, and to no doubt send a clear message to both Vodafone and Telecom that they believe the current system is flawed. This promotion entices users to receive large numbers of SMS messages from off network mobiles (Vodafone and Telecom customers), and in return offers prizes to the users. In their initial week long promotion held just over a week ago over 700,000 SMS messages were received on the 2degrees network from the top 5 place getters, with over 230,000 messages alone received by the winner. The total number of messages received is unknown, but it's safe to assume that it's significantly higher!

With current SMS termination rates between Telecom and 2degrees of 9.5c + GST, and 6.25c + GST between 2degrees and Vodafone (negotiated as a special deal), this represents revenue to 2degrees of somewhere between $43,750 and $66,500 + GST, depending on the network that the messages originated from, for these top 5 users alone. In return 2degrees gave away 3 PlayStation 3's, a handful of free mobile phones, and $30 airtime credits if you received 1000 inbound SMS messages from another network. 2degrees have discovered a cash cow, and right now they're milking it as fast as they can. Today they have launched a new Xmas promotion, this time offering a LED TV for the top place getter, Xbox Kinect packages, free phones, and free airtime.

This type of business model of exploiting termination rates isn't new. In the late 90's it was exploited by an number of ISP's in New Zealand who offered free dialup internet that was funded by termination charges. This famously lead to the introduction of the 0867 prefix in New Zealand by Telecom New Zealand to manage traffic on their network, however the conspiracy theorists out there still believe the introduction of 0867 was a cunning move to Telecom to shut down the business model. Today the model is also used by 2talk who use the 028 prefix for their fixed line VoIP platform and allow people free forwarding of calls to their mobile phone as well as generating revenue for themselves for every call to an 028 number that is tied to a fixed line service.

One can argue that since the launch of mobile networks that MTRs have represented a legitimate funding source for networks using the CPP model. The question has to be asked however - is what 2degrees doing now ethical? Are they exploiting MTRs for their own gain? Should Vodafone and Telecom continue to deliver messages to the 2degrees network that are nothing other than "solicited spam"? If you're a Vodafone or Telecom user who's sent large amounts of messages do you feel short changed helping a friend to win a low value prize when the real winner is 2degrees?

2degrees are pushing for a Bill and Keep (BAK) pricing model where no money changes hands between operators, and they believe traffic symmetry occurs naturally. They believe "spam" isn't a problem in the SMS world, but that's clear is right now they're encouraging solicited bulk messaging which services no purpose other than delivering them financial gain. To me this is spam, even if it is solicited.

What is clear is that 2degrees have caught both Vodafone and Telecom off guard. The only unanswered question now is how much cash the cash cow will give out before it goes dry. People get dirty hands during wars, and only one side can win.

Vodafone NZ’s stuffed network

By Steve Biddle, in , posted: 29-Oct-2010 20:32

It's not very often I get annoyed enough to write nasty things about a company, but Vodafone deserve an award right now for running NZ's worst performing mobile network.

There appears to be a major fault that's been affecting the Vodafone network for a number of weeks now and I'm interested in feedback from others who may be experiencing the same issue.

I use data on a daily basis on my Nokia E71. What I've noticed with increased frequency is 3G data retainability issues with data sessions randomly stalling. This becomes obvious when applications such as Gravity (a S60 Twitter app) refuses to update. Once the data session is stalled (but still active according to the phone) you can't send or receive data. The issue also affects voice calling and SMS messages. SMS messages sent while the data session is stalled will sit in the phone outbox and any inbound voice calls will go directly to voicemail. Inbound SMS messages are also not received by the phone

Fixing the fault is very simple. Ending the data session by closing down the application using the data session or manually ending the active data session results in SMS's being sent again and the ability to receive calls and SMS's instantly resuming. If you want a more drastic fix you could just power cycle the phone, but it's certainly not needed, unlike the last time a virtually identical issue existed when GPRS was enabled in the network in 2002 and a power cycle was the only fix.

I've now encountered this issue in various parts of Wellington and also in the Auckland CBD which probably excludes the fault from being  on a single RNC

Totally unscientific studies based around twitter feedback and friends experiencing the exact same issue shows it's not an isolated issue and that I'm not the only person encountering this fault. I suspect however that this issue is totally unrelated to the large number of people complaining about huge delays sending and receiving SMS messages on the Vodafone network.

If you are experiencing any of the above I'd love to hear from you and have created a thread here on Geekzone where the issue can be discussed. Vodafone are seemingly in denial of this issue so it would be interesting to see how many others are experiencing it.

Fixing the fail at Vodafone

By Steve Biddle, in , posted: 19-Oct-2010 21:14

How hard can it be for a telco to provide accurate usage information for customers? That's a question I've been asking myself for the past 3 1/2 years every time I try to check my usage balance on my You Choose plan.

One of my You Choose addons is Your Time 200. This offers my 200 minutes of calling to other Vodafone mobiles between 7pm and 7am weeknights, and all weekend. This addon differs from all other Your Time addons that include calls to any NZ number.


The description sounds clear enough. But that's where the problems start.

Lets say I want to check my remaining balance. A quick TXT with 777 with the word BAL tells me this

"Mthly N/W nat. vf-vf mins:126"

Hmm.. Where did the nat. come from? I was sure my minutes were only on net and didn't include national calls!

How about the 777 IVR? Maybe that's better?

You have.. "126 included included monthly nights and weekends national minutes".

Yip that's right, not only is the world included actually said twice but, but the national word has popped up again. What does that mean? Maybe the Vodafone website could help me. Lets log into the usage meter and check.


Landlines? That's a new word. Is that the same as national calls or different yet again?

What I can tell you from being a customer for many years is that the Talk 200 plan only includes calls to Vodafone mobiles. Calls to any other off net mobile or landline phone are charged at normal airtime rates.

After 3 1/2 years of observing this and numerous complaints to Vodafone about this about this I figured it's time to get this off my chest. I know how and why the the problem occurs - the balance system was poorly scoped and is unable to differentiate between the different Your Time addons. At the end of the day however I don't care that you have incompetent staff unable to properly scope and build systems. You are misrepresenting a product  and if you can't be bothered in sorting this maybe you should actually start offering including calls to landlines in this plan so you're not confusing your customers?

How hard can it be? Honestly? I bet it's easier than fixing the continual problems with stalling PDP contexts on your 3G network (but that's a whole new post for a rainy day).

Chorus’ new Service Delivery Point (SDP). What is it?

By Steve Biddle, in , posted: 2-Sep-2010 20:50

One of the biggest issues affecting Digital Subscriber Line (DSL) broadband is the quality of the copper wiring it is delivered over. The quality of wiring hasn’t caused significant impact in the past with slower first generation ADSL services, but as Chorus along with other providers such as Vodafone, Orcon, and TelstraClear upgrade their networks to support faster ADSL2+ and VDSL2 speeds, wiring quality becomes a major issue.

Overall the quality of the wiring within the Chorus network is typically good, however poor quality wiring in your home or workplace is common, and has the ability to have significant impact on both speeds and the stability of your connection. Many homes have poorly installed wiring or jackpoints, or jackpoints that have suffered corrosion damage over time due to the damp climate in parts of New Zealand. If your home wiring has not been upgraded since the late 1990’s it probably uses older 3 wire jackpoints (with a master and extension unit) which also have the ability that play havoc with DSL signals. Many people have simply blamed their ISP for their speed or stability issues in the past, without understanding that their issues could well be as a result of wiring within the premises.

The SDP is the result of many hours of work spent developing a device that can be installed in a home or business to improve broadband speeds without having to replace all existing wiring within the premises to comply with modern wiring guidelines. The SDP also future proofs the house for a move to Voice Over Internet Protocol (VoIP) based phone services and can also simplify the setup of a home network to PC’s or network devices located in other locations around the house. To really understand why the SDP is so important however, we firstly need to look at the current state of broadband infrastructure in New Zealand.

Right now Chorus are past the halfway mark deploying a Fibre To The Node (FTTN) network in New Zealand consisting of 3600 new roadside cabinets. Previously most DSL based broadband services were provided from phone exchanges that may have been some distance from your home or business. Because the DSL signal degrades the further it has to travel, the further you were located from an exchange, the slower your broadband would be. These new roadside cabinets contain fibre optic cable to link them to the existing exchange, and a piece of equipment known as an Intelligent Service Access Manager (ISAM) or Digital Subscriber Line Access Multiplexer (DSLAM) to deliver your broadband connection directly from the cabinet over the existing copper wiring to your house. By the end of 2011 when this project is complete approximately 80% of New Zealanders will be located within approximately 2km of a phone exchange or roadside cabinet and will have access to broadband connections with a minimum speed of 10Mbps – the vast majority however will find that their speeds are closer to 18Mbps with current ADSL2+ technology, and with the upcoming launch of the VDSL2 technology many could see download speeds in the vicinity of 50Mbps over their existing copper wiring.

While Chorus are upgrading their network, in many cases the broadband speed bottleneck will now be the wiring in your home or business. DSL technologies use frequencies over your copper phone line that are much higher than those used by your normal voice services. To ensure that voice and DSL services can coexist on the same line and do not interfere with each other, filter(s) are required to be installed in your premises to split the two. There are two options available – a professionally installed master filter, or DIY plug in filters that are required for every phone in the home, as as well as other devices plugged into your phone line such as your Sky TV box, fax machine or medical alarm.

Most people choose to use plug in filters because it enables a them to perform a self install of their modem, and avoid the cost of a visit by a technician. Plug in filters are not a the perfect solution however – not only are they cumbersome, but they also don’t eliminate issues such as reflections on the line, nor can they compensate for poor quality wiring, connectors or jackpoints. As I mentioned earlier, damaged wiring or jackpoints, or even the use of older 3 wire jackpoints will cause a significant impact on DSL performance. Installing more than 4 plug in filters on a line can also cause the DSL signal to be degraded. These all have the ability to become a significant bottleneck with faster ADSL2+ and VDSL services which will suffer significant speed degradation or stability issues from any interference caused by your internal wiring.

Poor quality internal house wiring is an issue that is widely known, and is an issue that the industry has strugged to solve. Despite Telecom releasing guidelines in the late 90’s advising that a structured wiring solution be installed in all new homes, many new homes still don’t have one. Around the same time Telecom also advised of a move away from wiring phone jackpoints in a daisy chain configuration, but many electricians and phone installers still continue to this day to install jackpoints in this way. The daisy chain configuration involves connecting jackpoints in a “looped” configuration from one to the other, and causes impedance fluctuations or reflections on the line which in turn impacts on DSL signals, and ultimately broadband speeds.

A professionally installed master filter will split your broadband and voice signals as close as possible to where the cabling enters your house (a location known as the ETP or External Termination Point) and will give you a dedicated jackpoint to plug your DSL modem into. Because the DSL and voice signals are isolated It means that poor quality wiring can’t interfere with the DSL connection and in most cases will deliver faster speeds than what can be obtained using plug in filters. While it’s not possible to put an exact figure on this, for somebody who is connected to new equipment in an exchange or roadside cabinet and already gets good sync speeds  (ie in the 12000kbps – 15000kbps range) it could possibly deliver an increase of around 10%. Somebody connected to a new cabinet or exchange who has very poor quality house wiring could see speed increases of several hundred percent. A master filter is certainly recommend for anybody who uses DSL based broadband, and for VDSL services a professionally installed master filter is essential as existing ADSL plug in filters are unsuitable and can’t be used. Uptake of master filters has been low, in part because many people are unwilling to pay the costs associated with installation.

So on to the SDP. What exactly does it look like?



The SDP in it’s basic form is a very simple patch panel. The faceplate contains a number of RJ45 keystones and inside the unit there is a VDSL rated master splitter and a terminal block for interfacing with a house alarm. Ports 5 and 6 can be fitted and connected to RJ45 faceplates elsewhere in the house using cat5e or cat6 cable for connecting other PC’s or devices to your router to form a home network.

Your incoming phoneline is terminated to a VDSL rated master filter that is located inside the unit and your modem is now connected to port 1 of the SDP. Port 2 is the voice output from the VDSL filter, while port 3 is connected internally to existing phone jackpoints in your house. Port 4 is connected to port 3 and allows you to plug a phone in directly to the SDP. The PSTN jumper clip (shown in the image above) bridges your incoming voice services to your internal house wiring. Removing this and plugging a phone directly into port 2 allows a simple isolation test to be performed to establish very quickly check if a fault (such as no dialtone) is an internal wiring fault or is located between the premises and the cabinet or exchange.

The following images show a typical SDP installation:

Clean Pair1

The SDP itself is unpowered and requires no power to operate. Under development however is a battery backup module that allows home networking equipment to stay powered during a power cut. This is particularly important as we move into the fibre world with Fibre To The Home (FTTH) deployments and move towards using VoIP as a primary voice line replacement.  With FTTH all voice services use VoIP as analogue phone services can’t be carried over fibre optic cabling. The loss of power to your home will mean a loss of all phone and internet services, as unlike Telecom’s existing copper network which has batteries and generators at both cabinets and exchanges to maintain power during an outage, the equipment in your house can only be powered by your own electricity. The battery backup will allow you to keep your equipment powered so phone calls can still be made during a power cut.

It’s worth noting that while a lot of media attention has focussed on the battery backup issue and the potential inability of people to contact emergency services during a power cut if they use VoIP services, that a large number of New Zealand homes currently only use cordless phones that are rendered unusable in a power cut anyway. People should  ensure that they have at least one corded phone in their house that will allow them to make calls during a power cut.

There are two primary methods of connecting a SDP – one with a phone service delivered over POTS (as is the case for most people now), and one where a VoIP service is used as a primary voice line. The following example shows a typical SDP installation where a customer has voice (POTS) and DSL services provided over copper.

Diag 2


One of the great things about the SDP is that it allows a very simple transition process to a VoIP based phone service. Right now a large number people have installed their own analogue telephone adapter (ATA) at home and use VoIP services such as VFX or 2talk for their phone line. Many have also opted for Vodafone Home Phone Wireless boxes which use Vodafone’s mobile network. In both cases many people choose to simply plug a phone into the port on their ATA or Home Phone Wireless box because hooking this up to their existing house wiring is a process that is beyond many people’s capabilities. With the SDP, delivering a dial tone to any existing jackpoint in your home is a simple two step process – simply remove the PSTN clip and run a cable from your ATA or At Home box into port 3. Every jackpoint in your home that is connected to the SDP will now be connected to the ATA.

Diag 3

The SDP isn’t magical but it’s certainly a very cool little unit. Poor internal wiring is an issue that affects a large number of DSL customers, many of whom are totally oblivious to the issues and put up with speed related issues and problems such as frequent disconnections that can be directly attributed to poor internal wiring. To deliver optimum performance on ADSL2+, users should really have a central splitter installed, and for VDSL this will be mandatory. The SDP becomes a logical replacement for a master filter installation – rather than just install a basic filter the SDP fills a void that exists where people don’t want to spend significant amounts of money to replace wiring in their house, but want a cost effective way to be able to take advantage of faster broadband speeds and also future proof themselves for the arrival of fibre and VoIP services.

It is not a replacement for a proper structured cabling solution such as those recommended by the TCF, and if you are building a new home or upgrading your home then a structured cabling system should be seen as a key requirement.

If you’re wondering where you can sign up for one you’ll just have to wait a little while yet still. Chorus will be responsible for the installation but will not take orders directly - you will be able to request an installation through your ISP. The launch is not far away, and I’m sure we will see plenty of publicity surrounding the rollout when it does happen.

Vodafone NZ launches improved international roaming

By Steve Biddle, in , posted: 18-Aug-2010 19:53

After the launch of Telecom's XT network I blogged about a key difference between the XT and Vodafone networks - the fact that while roaming internationally on the XT network your voicemail works in exactly the same was as it did in new Zealand. On Vodafone NZ it did not.

While Vodafone have offered international roaming since the mid 90's (when BellSouth entered the market) one key feature missing was the ability for a person calling your mobile phone to leave a voicemail message if your phone was turned on (ie it rang) and was not answered. This is a feature known as Late Call Forwarding.

If you had activated call forwarding so that all calls were forwarded to voicemail or had your phone switched off then callers would be able to leave messages. If your phone was switched on and rang, people calling you would either receive a disconnect tone after the specified timeout period, or in some cases received a prerecorded message. If you were roaming on the Vodafone Australia network then this feature was available and callers could leave a message, however anybody who has roamed to Australia would also have noticed that Vodafone billed you the standard $1 per minute roaming charge for voicemail deposits, a charge they loved to hide by not mentioning it anywhere on their website.

As of this week Vodafone NZ have upgraded their network to support Late Call Forwarding on all roaming destinations. Now no matter whether your phone is on of off people calling you will be able to leave you a voicemail message. And best of all you will no longer be charged for voicemail deposits!

Just remember though that standard international call costs still do apply when accessing your voicemail box to listen to messages - they haven't been generous enough to waive these!

TCF Home Wiring Guidelines

By Steve Biddle, in , posted: 19-May-2010 09:14

Those who have followed by blog posts over the years will have seen numerous posts from me in regards to home structured cabling solutions. I have installed cabling in a number of new homes over the past few years as well as having retrofitted a number of older homes. I've also written some DIY installation guides that I hope to find time to update in the near future as there have been some changes recently in the recommendations for home cabling.

In early 2009 the Telecommunications Carriers Forum (TCF) established a working party to prepare a Code of Practice for Residential and Small Office Premise Wiring. The project goal was to develop a code that could be used as a benchmark for all installers who are installing or retrofitting cabling solutions in a residential or small business situation. Telecom had created PTC106 in the late 90's to deal with the planned growth of home networks, and this standard has been largely developed on that, with updates to reflect changes that have occurred in the past decade, particularly with recent and planned fibre to the home (FTTH) deployments.

By law in New Zealand there is no requirement for new homes to have any form of structured cabling solution. In my opinion this should be a legal requirement, in the same way that insulation and double glazing are now mandatory. We are in the early stages of a Government funded FTTH rollout to the majority of homes in New Zealand - what most people don't realise is that it's no good having a fibre connection to your house without suitable wiring inside your house. One could compare this to running electricity to a home 75 years ago that had no existing power cabling, switches or lights!

While the Government has talked about the costs of deploying fibre to your doorstep, nobody has yet talked about the cost of actually connecting your house to this fibre. The costs of retrofitting an existing home to take full advantage of the fibre connection to your door, as well as installation of the hardware required for fibre could easily run from a minimum of $1000 upwards, with costs probably approaching $2000 - $3000 if new cabling is run to every room back to a new patch panel. The costs of installing cable in a brand new home that is under construction is minimal compared to the costs of attempting to retrofit a house afterwards. In my opinion Minister's should be taken to task and to explain why there are no minimum requirements, because right now there are new houses being built with phone cabling being installed in ways that are incapable of even delivering optimal ADSL speeds, let along being able to easily support advanced services in the future.

The new TCF guidelines future proof your house for the introduction of fibre, and also for the introduction of Telecom's Next Generation Voice services that are being launched this year. Most people are probably unaware that by the end of 2010 Telecom are required by it's deed of undertaking with the Government to have 17,000 lines switched to a Next Generation VoIP platform for all voice calls. This will mean the installation of a residential gateway (RGW) on the premises that will deliver VoIP and internet to your house over an EUBA ADSL2+ internet connection, with a built in ATA allowing existing phones to connect to a VoIP service for your voice services.




These new guidelines recommend a minimum of 2 x RJ45 jack points and 2 x F type coax connections in every room in the house, and 4 x F type coax connections in the lounge or location where the primary TV will be located. A minimum of tri-shield RG6 coax cable is to be used so it meets the requirements of the Freeview|HD UHF service, TelstraClear's HFC network in Wellington, Kapiti and Christchurch, and that of Sky TV.

The home distributor serves as a central point where an ADSL modem, router and patch panel is located. It also serves as the home for a Optical Network Terminal (ONT) when fibre eventually makes it to your home. The ONT converts the optical signals an an electrical form and will connect via an Ethernet cable to a router that will provide internet to your home. Photos showing a typical home distributor (as being deployed by WxC in existing FTTH installations) can be viewed here.

If you are building a new home or involved in alterations to an existing home then this new guide should be essential reading. If you are in the process of building or planning to build a new home the installation of suitable cabling to future proof yourself is essential.

All the information you need to know is available on the TCF website




Upcoming FM radio station frequency changes in New Zealand

By Steve Biddle, in , posted: 16-May-2010 08:23

Over the coming months approximately 250 FM radio station frequencies in New Zealand will be changing. This accounts for around a third of all FM frequencies that are used in New Zealand.

When FM transmissions first began in New Zealand in the 1980's the channel spacing (the gap between stations) and frequency allocations that were used were not optimal in some regions. This means that in some areas the ability to broadcast new stations was hampered, and interference in adjoining regions could also occur which resulted in some frequencies being unavailable for use.

In April 2011 the usage rights for all AM and FM radio stations in New Zealand come up for renewal. In 2003 the Government agreed on a policy for existing rightholders to enable them to purchase 20 year licences from the 2nd April 2011 and in set new pricing formulas for usage rights of these frequencies. Over the past couple of years planning work has been under way to change many of these frequencies to ensure they are reallocated in a way that best suits New Zealand and allows for additional radio stations, as well as allowing the ability to offer services as as HD radio in the future if radio stations see this as an option.

Starting in June 2010 and continuing into early 2011 a significant number of frequency changes will occur, publicity for these changes has just started to appear and full details of every change, including the new frequencies is available from



Did Vodafone unintentionally pwn the Commerce Commission?

By Steve Biddle, in , posted: 13-May-2010 09:12

I'm not the only person asking myself this question today after the Commerce Commission backtracked on their earlier decision and recommended regulation of Mobile Termination Rates (MTRs) in New Zealand. This is an about face from their February decision that recommended against regulation, and instead that a voluntary undertaking by Vodafone and Telecom be accepted. A final decision will be made by the Minister, Steven Joyce, in early June.

If the decision to regulate is made by the Minister the first question that has to be asked is how long it will take before regulation will take affect. The current MTAS investigation has taken 18 months to reach it's current point, and there are certainly plenty of people in the industry who now believe it could be the very least another 12 months before regulation takes effect. If this was the case it would occur before the expiry of Vodafone and Telecom's existing agreements with the Crown. Trying to introduce regulated prices before then runs the risk of legal action from Vodafone and Telecom - a voluntary agreement on the other hand won't suffer the same fate.

It is also worth remembering that the Commission's preferred outcome was voluntary industry undertakings rather than regulation. It's not hard to take the view reading through documents between the Commission, Vodafone, Telecom and 2degrees in late 2009 that the Commission set strict guidelines on what would be acceptable in these voluntary undertakings. This undertaking was formed and revised many times to meet those guidelines. It seems since then the goalposts have now moved.

A 12 month delay will possibly generate upwards of $100 - $150 million in extra profit between Vodafone and Telecom, a figure based upon estimates of what the voluntary offer from Vodafone and Telecom will cost them. The cynic in me can't help but think such a delay only benefits two parties - Vodafone and Telecom. It certainly does not benefit the end user, or 2degrees. Have the Commerce Commission in effect been railroaded without realising the implications of their change of mind?

So why could regulation take so long? First of all we have to establish the actual reason for the MTAS investigation. Despite popular opinion being that it was launched to force the retail costs of mobile calling down, this was never a focus of the investigation.


In November 2008 the Commerce Commission commenced its investigation into whether the mobile termination access services should be regulated, due to concerns that a combination of mobile termination rates that are significantly above cost, with significant on-net discounting, creates a barrier to competition in the mobile market. The Commission's investigation did not look at the prices that consumers directly pay for mobile services.


Reading through a number of documents from the Commission it is very clear that they had two key goals in mind

  • To establish a true cost for MTR rates. Due to voluntary undertakings accepted by the previous Labour Government, concern was raised that our MTR rates were well in excess of the true cost and significantly higher than Australia. Compared to OECD averages and average long term exchange rates our MTR rates were about average however regulators in Europe were aggressively targeting MTRs with the goal of lowering them significantly.

  • To consider whether on-net calling deals are anti-competitive. Debate raged on about whether higher MTRs encouraged an environment where cheaper on-net calling became the norm. The argument is that this forms a barrier to the entry of smaller players into the marketplace, however there are arguments against this including setting asymmetrical MTRs for new networks. This allows calls off-net to be charged at a different rate to the inbound MTR revenue received by an operator, resulting in a net gain to them. 2degrees have an asymmetrical agreement in New Zealand.

In light of the announcement yesterday many people see Vodafone as having scored an own goal with the launch of their Talk plan offering on net calling at a cheaper rate than they were willing to offer other providers to terminate traffic on their own network. I don't believe this for one minute - there are some exceptionally good arguments against this and Vodafone's pricing is no different to many other deals that already exist in the marketplace, and in the rest of the world. Cheap on-net calling has become very common in the global mobile market in recent years - in Australia new plans from 3, Vodafone and Virgin all offer unlimited on-net calls. In Europe it's very common to find operators offering large numbers of free on-net minutes with every prepay topup, or offer free on-net weekend or evening calling. None of this is new. Even Taylor Reynolds, the OECD's top telecommunications analyst, was asked about Vodafone's plan when he visited New Zealand last month. His response was one of surprise that we were even paying for on-net calls at all because a lot of OECD operators give users free on-net calling! Turkey have imposed regulation to stop this, with TurkCell being unable to offer on-net calling rates at less than their inbound MTR rate. Such a regulation here would mean that calling plans such as Best Mate, Favourites, TalkZone, and capped calling between Telecom landlines and mobiles would all be illegal. I can only assume that organisations in support of the Commission's decision also support retail price controls and want to see plans such as these made illegal.

A lot has changed in the global marketplace in recent months. In April UK telco regulator Ofcom announced significant MTR rate cuts from the current rate of 4.3p per minute to 0.5p per minute by 2015. Such a fundamental move by Ofcom possibly caught the Commerce Commission off guard, and one has to ask the tough question about the Commission's true reasons for changing their mind. Could the real reason be that  the investigation has dragged on for so long, the goalposts have moved numerous times, and the voluntary undertakings that they helped shape are now seen as being significantly higher than new regulatory proposals from EU regulators be the real cause of this about face?

Getting to where we are now has taken 18 month. In that time we're seen fundamental changes in the NZ marketplace with the extremely successful launch of 2degrees. We are finally seeing prices fall as we now have competition in the marketplace. Are we facing the likelihood of another 12 - 18 months of delays while lawyers, analysts, and regulators battle it out deciding which pricing model best suits New Zealand? Or are we better off accepting voluntary undertakings from the industry, that were by large shaped by the Commission, and getting on with things?

G.722 HD Audio. What’s the big deal?

By Steve Biddle, in , posted: 5-May-2010 11:00

G.722, HD Voice and HD Audio have become the latest buzzwords in the VoIP (Voice Over Internet Protocol) market in the last year. They are all words to describe the same thing - wideband audio that delivers voice calls using VoIP with audio quality that is greatly superior that of a regular landline or mobile phone call.

Since the late 1970's G.711 has been the defacto standard in the telephony world for voice encoding as we moved into the digital world with fully digital phone switches, and moved away from analogue phone exchanges. G.711 sampled audio at 8kHz and created a 64kbps audio stream using two slightly different methods depending on where in the world you were located. u-law was used in Japan and North America, and a-law was used in the remainder of the world. u-law and a-law were also used as the audio codec for both T1 and E1 circuits as well as ISDN, hence the reason that channels are all 64kbps. Since the mid 90's as VoIP has rapidly taken over in the telephony world G.711 has still remained as the codec of choice.

Things are now slowly changing however, since computers now have far more processing power than they did in the 1970's the ability to process, compress, and decompress audio in real time is now far easier. This has lead to the creation of new audio codecs in recent years that can sample voice with greater frequency ranges, and also compress audio to use less bandwidth without any noticeable loss of quality.

G.729 delivers call quality that is only marginally less than that of G.711 but uses approximately half the bandwidth. This offers very significant benefits as we move to fully IP based networks as it allows greater volumes of voice traffic to be carried. G.722 on the other hand uses a similar amount of bandwidth as G.711, but samples audio at 16kHz which is double that of G.711 and delivers what many regard as far more natural sounding audio. Newer codecs such as Siren22 that was created by Polycom take things a step further and sample audio at 22 kHz, resulting in audio that sounds even better but with the downside of using significantly more bandwidth. G722-2 or AMR-WB is also slowly making it's presence felt in the mobile market with a number of mobile carriers having recently deployed this codec which offers superior 16 kHz voice quality over a mobile connection when the end users both have handsets that support this codec.

Many modern IP PBX's support the G.722 audio codec and with most new IP phones supporting G.722 it's certainly a feature that many people are rapidly discovering. The enhanced audio quality also makes audio conferencing a vastly superior experience. While G.722 is currently supported by a growing number of VoIP providers around the world, the one "limitation" of G.722 is that there is no benefit when calling a landline, mobile phone, or another VoIP user who doesn't have G.722 hardware as the call will only be as good as the audio quality from the remote party. Here in New Zealand WorldxChange fully support G.722 on their VFX and DVX platforms for calling between other DVX and VFX users, and G.722 calls between users on different VoIP providers who peer IP calls and support G.722 are also possible. Telecom New Zealand's new VoIP platform and newly released SIP trunking product does not support G.722 at this stage and I see this being a fundamental downside for them as they move towards launching this product publically in the coming months.

I'm presently reviewing a number of mid range and high end VoIP handsets for Geekzone. I have a Snom 820, Cisco SPA509G, Aastra 6755i, Yealink T28P and Polycom IP450, all of which support the G.722 codec. As part of this review I've recorded some audio samples and have them available below for you to listen and compare for yourself.


  • Sample 1: Asterisk recording "Your extension number is two two two". This file uses the GSM codec for "Your extension number is" and uses the G.722 codec for the "two two two"

  • Sample 2: Asterisk recording "At the sound of the tone the time will be exactly twenty fourty nine". This file uses the GSM codec for "At the sound of the tone the time will be exactly" and uses the G.722 codec for the "twenty fourty nine" CLICK HERE FOR SAMPLE 2

  • Sample 3: Asterisk Voicemail recording using G.729. This is a sample of the Asterisk voicemail prompts using recordings in the native G.729 format.

  • Sample 4: Asterisk Voicemail recording using G.711. This is a sample of the Asterisk voicemail prompts using recordings in the native G.711 format.

  • Sample 5: Asterisk Voicemail recording using G.722. This is a sample of the Asterisk voicemail prompts using recordings in the native G.722 format.

  • Sample 6: Asterisk voice call using G.729. This is a sample of  a phone call using the G.729 codec.

  • Sample 7: Asterisk voice call using G.711 a-law. This is a sample of  a phone call using the G.711 a-law codec.

  • Sample 8: Asterisk voice call using G.722. This is a sample of a phone call using the G.722 codec.


The differences between the various codecs should be readily apparent!





Some research notes for Steven Joyce & the NZ Commerce Commission

By Steve Biddle, in , posted: 27-Apr-2010 17:00

This morning Communications Minister Steven Joyce announced that he had asked the Commerce Commission to reconsider it's recommendation on mobile termination rates. In February the Commission recommended to the Minister that voluntary undertakings from both Vodafone and Telecom be accepted rather than Government regulation.
"In a letter to me dated 19 April 2010, the Commerce Commission indicated that a new retail offer launched by Vodafone on 13 April 2010 may be material and may have the potential to affect the basis for the Commission's recommendation," says Mr Joyce."
The plan in question is Vodafone's Talk Plan - a $12 addon for Prepay users that allows calls to other Vodafone customers or any landline in New Zealand any time of the day or night, at an effective rate of 6c per minute. The Commission appears to believe there could be an issue with with this plan and that it is is "anti-competitive" by offering on-net termination rates at a price less than Vodafone's offering that had been submitted to the Commission. This view can be argued against in many ways, including the fact many customers do not use all included minutes and that a large number of these calls will presumably be to landline phones where Vodafone are in fact paying approximately 2c exl GST per minute to terminate calls.
If Vodafone's plan was enough to trigger a serious rethink on MTR rates, questions serious questions need to be raised about the knowledge the Commerce Commission of the mobile market with New Zealand, and ultimately whether they are competent enough to be offering advice to the Minister.
As of the 1st April 2010 the MTR costs for Telecom are 14c + GST for voice and 14.4c + GST for Vodafone. SMS rates on both networks are 9.5c + GST per message. Current interconnection costs for mobile to landline traffic is approximately 2c + GST per minute.
Telecom offer a plan called Telecom Talk & TXT 300 for  $29.95 per month that offers
  • 300 Nights and Weekends minutes to any mobile or network
  • 300 TXT messages to any network
  • 20 Daytime minutes to any network
Telecom claim this offers $344.80 worth of monthly value (based on normal calling & SMS rates) for $29.95 per month.
If all of those 320 minutes were used to call another Telecom customer it represents a cost of 9.36c per minute, under Telecom's current MTR of 14c excl GST per minute. This rate calculation is based on no SMS messages being sent -  if a modest cost of 4c (excl GST) [1] was used to model this equation it would result in a cost of  cost of 5.14c per minute, which is lower that Vodafone's Talk offering!
If Vodafone's Talk is so bad why is Talk & TXT not being targeted also? What's even more interesting is that based upon current MTR costs if all included TXT message and voice minutes were used to call a Vodafone customer it would result in inbound revenue to Vodafone (based on whole minutes) of $83.90
ZOMG!!!!111!!! Telecom are actually losing $53.95 per month on that customer. How can that be? Quick, somebody launch a Ministerial enquiry!! It should be illegal for a company to sell a product under cost!!
Telecom also offer a capped rate of $1 + GST for calls of up to 60 minutes from a Telecom business landline to a Telecom mobile. Once again this is below current (and proposed) MTR rates.
Vodafone also offer You Choose addons that have been in place for a number of years that also give calls both on and off net for less than current (and in some cases proposed) MTR rates.
  • Your Time 100 - 100 mins to any network or landline for $14.95 = 15c per minute
  • Your Time 300 - 300 mins to any network or landline for $29.95 = 10c per minute
  • Your Time 200 - 200 mins to another Vodafone mobile for $11.95 = 6c per minute
The Commerce Commissions' "smoking gun" is in fact nothing new as Vodafone have already been offering on-net calls for 6c per minute for a number of years.
There is a myth in this world that mobile calling rates are related directly to retail call pricing. These prices should make it clear to people that no such link exists.
So my advice to the Commission and Minister is quite clear - pull your head out of the sand and do your research. Right now you look like nothing but a pack of idiots after bragging about finding the "smoking gun" - except you haven't told us anything new. Networks have offered calling rates for both on-net and off-net that have been below MTR costs for many, many years.
What exactly is so significant about Vodafone's offering that has lead to the action you have taken? If on-net termination is your "smoking gun" why have Telecom or their Talk and Text 300 Plan not been mentioned when this plan can offer effective on-net termination rates that are even lower that what Vodafone's Talk offering has?
Every single person in NZ is relying on  you to deliver us competition in the marketplace. It seems highly unlikely that you are actually capable of doing this when you're not even aware of current offerings and pricing that exist in the marketplace today.
It should be pointed out as that I have no links with Vodafone or Telecom other than being a Vodafone customers. I think calling prices in NZ are too high and want to see them come down.
[1] 4c + GST is the maximum rate that would be charged per SMS under the Hybrid Bill and Keep system proposed by Vodafone and Telecom.

sbiddle's profile

Steve Biddle
New Zealand

I'm an engineer who loves building solutions to solve problems.

I also love sharing my views and analysis of the tech world on this blog, along with the odd story about aviation and the travel industry.

My interests and skillset include:

*VoIP (Voice over IP). I work with various brands of hardware and PBX's on a daily basis
  -Asterisk (incl PiaF, FreePBX, Elastix)

  -xDSL deployments

*Structured cabling
  -Home/office cabling
  -Phone & Data

*Computer networking
  -Mikrotik hardware
  -WAN/LAN solutions

*Wireless solutions
  -Motel/Hotel hotspot deployments
  -Outdoor wireless deployments, both small and large scale
  -Temporary wireless deployments
*CCTV solutions
  -Analogue and IP

I'm an #avgeek who loves to travel the world (preferably in seat 1A) and stay in nice hotels.

+My views do no represent my employer. I'm sure they'll be happy to give their own if you ask them.

You can contact me here or by email at stevenbiddle@gmail.com


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