Telecom pushes for broadband partnership

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Master Geek

#404350 13-Nov-2010 23:50

Hmmm.. the previous wasn't the right version and no Edit button there. Please remove the other one.

Ending the digital divide: Telecom and Vodafone announce joint approach to rural broadband
Telecom and Vodafone today announced they had submitted a joint response to the Rural Broadband Initiative (RBI), in which the companies will combine their resources to build new, open access network infrastructure for the provision of broadband in rural areas using a range of technologies.
...

Looking from the outside, I have mixed feelings about this.

In short what they are doing together is to build basic fiber infrastructure for their mobile networks -- with government money. The fiber will also benefit fixed broadband, here and there, but the rural promises can easily be met with mobile technology, 3G/HSPA+/LTE. ~5 Mbit/s is quite a typical bandwidth I'm getting with my 3G subscription (not in NZ, though) and the first LTE network will open to the public next month.

Six years. I feel that NZ has been put on hold due the cabinetization project, very little has happened while people have been waiting for it like the raising moon. And the results are not exactly something to be excited about, from the comments I gather not everyone even has ADSL2+ yet. If government is giving the money, they should demand results in much shorter time and not create another five year wait.

Will the new fiber networks and open towers be as open as the cabinets and other resources are today? You get my point.

So far NZ has been years behind in the ADSL2+ deployment, fiber isn't happening yet, mobile broadband isn't happening, competition is about who gets to resell Telecom's DSL, data caps are still there, local national traffic isn't happening, fixed telephone isn't dying, a lot of things just aren't happening and it's not about the size of the country, population or market. Now with people's money, also called government money, in stake, it would be nice to see people put before carrier's interests.

NZ government could e.g. look at some very specific markets, how different models have worked elsewhere, and so on. I'm sure they've done that and looked beyond Australia, UK and US for better examples. For example how Lithuania has managed to turn the amount of broadband connections to fiber from a few percent to almost 40% is just two year, an example how small local players benefit a smaller country (but doesn't sound as sexy as a big telecom would). Google for Baltic broadband and RAIN. They had 99% of DSL through one carrier back in 2006 and the country's broadband strategy in 2007 was to create competition -- what does NZ broadband strategy say?

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Snowflake

#404355 14-Nov-2010 00:15

Behodar: As someone who lives in a smaller town, the two "choices" here are the local power company and Telecom/Chorus. I believe that if the power company gets it, then fibre will be rolled out here sooner, compared with Telecom which will most likely focus on the big cities first.

Does that sound like a sensible assumption or are there complications that I'm not seeing?

if you had to get your arteries replaced to increase blood flow to your heart and lungs, would you go to a doctor who specialises in that field and has tons of experience, or would you go to a doctor that specialises in skin diseases but thought they might start building arteries cause there was money to be made there?

i've been a customer on three different fiber netwoks and can tell you that there is definately a difference in the quality of service you can get between them. I'd be opting for the team with the best experience and resources.

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Ragnor

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#404361 14-Nov-2010 01:12

ojala:

Looking from the outside, I have mixed feelings about this.

In short what they are doing together is to build basic fiber infrastructure for their mobile networks -- with government money. The fiber will also benefit fixed broadband, here and there, but the rural promises can easily be met with mobile technology, 3G/HSPA+/LTE. ~5 Mbit/s is quite a typical bandwidth I'm getting with my 3G subscription (not in NZ, though) and the first LTE network will open to the public next month.

Yes the government rural broadband program is about subsiding the cost of broadband for the relatively low population rural areas that don't already have coverage, that's by design.

Lots of area's have had 3G coverage already.

http://www.vodafone.co.nz/coverage/
http://www.telecom.co.nz/mobile/ournetwork/coverage
http://www.2degreesmobile.co.nz/broadbandzones

Note: 2degrees as a relatively new player is only covering main cities and roaming on Vodafone elsewhere.

ojala:

Six years. I feel that NZ has been put on hold due the cabinetization project, very little has happened while people have been waiting for it like the raising moon. And the results are not exactly something to be excited about, from the comments I gather not everyone even has ADSL2+ yet. If government is giving the money, they should demand results in much shorter time and not create another five year wait.

The previous (left wing) government was in power for 9 years and delayed local loop unbundling until 2006/7.

Just after that they regulated Telecom with structural separation and gave them a legal requirement to deliver 10Mbit to 80% of the country which lead to the cabinet program.

So yes government policy lead to a conflict and all non Telecom investment is fairly stagnant apart from ISP's unbundling the large quite profitable exchanges only.

ojala:

Will the new fiber networks and open towers be as open as the cabinets and other resources are today? You get my point.

Telecom wholesale is forced to offer several DSL products to ISP's, however the commerce commission which determines the specs/pricing etc is very slow and hasn't been clear enough (imo) in some of it's determinations. Sub loop unbundling is a mess and backhaul and handover to ISP's is extremely constrained imo.

Fibre is planned to be on an open access basis so should be a heck of a lot better.

ojala:

So far NZ has been years behind in the ADSL2+ deployment, fiber isn't happening yet, mobile broadband isn't happening, competition is about who gets to resell Telecom's DSL, data caps are still there, local national traffic isn't happening, fixed telephone isn't dying, a lot of things just aren't happening and it's not about the size of the country, population or market. Now with people's money, also called government money, in stake, it would be nice to see people put before carrier's interests.

Telecom fibre is happening to all new housing developments and estate, has been for a few years. Mobile broadband coverage has happened in all ubran areas.

With DSL the issue is the constrained domestic backhaul and handover links. The data caps exist as much due to domestic backhaul and handover limitations as international data prices.

An ISP selling ADSL over Telecom wholesale equipment (a regulated product/service by the ComCom) has to deal with handover links from Telecom Wholesale that are dimensioned at 32-48kps per subscriber. Assuming 10Mbit sync, 32kps per subscriber is 320:1 contention ratio!!

I don't know why this is so constrained, technical issues, $$$ or just monopoly artificial scarcity... etc

ojala:

NZ government could e.g. look at some very specific markets, how different models have worked elsewhere, and so on. I'm sure they've done that and looked beyond Australia, UK and US for better examples. For example how Lithuania has managed to turn the amount of broadband connections to fiber from a few percent to almost 40% is just two year, an example how small local players benefit a smaller country (but doesn't sound as sexy as a big telecom would). Google for Baltic broadband and RAIN. They had 99% of DSL through one carrier back in 2006 and the country's broadband strategy in 2007 was to create competition -- what does NZ broadband strategy say?

There are enough ISP's for good competition but they don't seem to be doing anything.

Why did Telstraclear stop expanding the cable network? Why aren't ISP's like Orcon, Vodafone etc with their own gear in the exchange and using their own backhaul providers from those exchanges offering much larger plans?

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#404366 14-Nov-2010 01:33

Ragnor:

There are enough ISP's for good competition but they don't seem to be doing anything.

Why did Telstraclear stop expanding the cable network? Why aren't ISP's like Orcon, Vodafone etc with their own gear in the exchange and using their own backhaul providers from those exchanges offering much larger plans?

Because the government is going to hand out gobs of money to someone to make a new network. Would be idiotic to build your own with your own money.

That would be like when your work is promising a big pissup at 7pm, going out at 5:30 and getting your own beer.

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#404369 14-Nov-2010 02:28

Yes since RBI and UFB but what about the 5+ years before then?

Beccara

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#404371 14-Nov-2010 02:58

Because Telecom fees to do so make it too costly? Whats the cost in terms of lawyers and rack space for an ISP to put gear in an exchange. Without this you're stuck with Telecom's sub-50kb allocation for DSL which makes things tricky.

I can also see Telecom saying "Sorry no more space for your rack in the exchange/cabinet for you" and with the new "open" towers I doubt this will change. You wanna put an antenna up? That will be $30k in "Design and compatibility testing"

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#404470 14-Nov-2010 13:58

Ragnor: Yes since RBI and UFB but what about the 5+ years before then?

They were crying to the commerce commission to have them change telecoms property rights to force telecom to allow others to use things they did not pay for at a stupidly low return on it.

Why build when you can get access to what is already there for peanuts?

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Master Geek

#404543 14-Nov-2010 18:05

I think that the way Telecom have crippled ADSL with the handover restrictions on ISP's (probably to protect their business services like G.SHDSL) should disqualify them from UFB. How do we know they won't do something similar to the new fibre network. I know that the govt have specified 100mb/50mb uncontended however I am sure that Telecom could find a way to cripple it. The 10 year period before they have to provide dark fibre is very concerning.

ojala

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Master Geek

#404686 15-Nov-2010 01:59

Thank you for the details, learning more about the NZ market every day. Brings back memories from 90's when one had interesting times with our incumbents :D

Ragnor:
Telecom fibre is happening to all new housing developments and estate, has been for a few years. Mobile broadband coverage has happened in all ubran areas.

With DSL the issue is the constrained domestic backhaul and handover links. The data caps exist as much due to domestic backhaul and handover limitations as international data prices.

An ISP selling ADSL over Telecom wholesale equipment (a regulated product/service by the ComCom) has to deal with handover links from Telecom Wholesale that are dimensioned at 32-48kps per subscriber. Assuming 10Mbit sync, 32kps per subscriber is 320:1 contention ratio!!

Isn't that something the regulator should fix? It shouldn't be just about who has the keys to the cabinets but what people (and ISPs) actually get.

I have hard time to believe that the domestic backhaul lack capacity. Politics? Just like TelstraClear should shake the access market with DOCSIS 3, shouldn't one of the backhaul fiber providers shake the market?

International data caps I can understand, most countries had them in the 90's and NZ isn't in the middle of the planet, ownership of Southern Cross and lack of competition is the more difficult part. Build a cable to Australia and piggyback their growing competition, put government money into the Pacific Fibre, anything.

But everything really comes to 1+1 = 2, do you wait for the demand or build to create demand. When DSL arrived, everyone wanted to get connected. (Simplified) Telecom DSL was the only option and now when most people are connected, the reluctance to invest is understandable. A single DSL line is little revenue so not only you need to invest but sell the service - a lot! A lot of ICT opportunities have been lost just because of timing.

If I build a new house in NZ, what do I get with the Telecom fibre? Their web site doesn't say a word (or I just can't find it).

For lack of Mobile Broadband I know it's technically available but the "big boom" isn't happening where tens of thousands of new mobile broadband subscriptions is activated every month. I've got one in the MiFi unit, in the iPad, in all the smartphones in the family, in the home alarm system, ... carriers offer fixed + mobile broadband bundles, you can use a single mobile broadband package with multiple SIMs, etc. This will bring the country more mobile broadband connections than there are fixed broadband, people switching from little used fixed to mobile broadband, use mobile broadband everywhere from their boats to summer houses, and in the result generate a lot of new types of services, businesses, and usage as most people have access to the net everywhere.

From carrier's perspective it's about having a decent mobile network that is ready for the data traffic and the data services increase the ARPU. Pretty simple really, just keep the things competitive and forget that long contract is the only way to keep customers.

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#404711 15-Nov-2010 08:21

ojala: For lack of Mobile Broadband I know it's technically available but the "big boom" isn't happening where tens of thousands of new mobile broadband subscriptions is activated every month. I've got one in the MiFi unit, in the iPad, in all the smartphones in the family, in the home alarm system, ... carriers offer fixed + mobile broadband bundles, you can use a single mobile broadband package with multiple SIMs, etc. This will bring the country more mobile broadband connections than there are fixed broadband, people switching from little used fixed to mobile broadband, use mobile broadband everywhere from their boats to summer houses, and in the result generate a lot of new types of services, businesses, and usage as most people have access to the net everywhere.

I think you would be somewhat suprised by the reality of this statement.

An interesting article: http://www.nbr.co.nz/article/telecom-loses-mobile-market-share-132804

The carrier enjoyed another big gain in XT uptake. There are now 839,000 on Telecom's 3G network, or around 40% of Telecom's total mobile customer connections.

That's a lot of customers..... And most of those will either be broadband cards, or Highspeed capible phones since they are all 3G.

Telecom last christmas gave away their MF626's... And I know a lot of people took that up.

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#404718 15-Nov-2010 09:09

ojala:

Ragnor:

An ISP selling ADSL over Telecom wholesale equipment (a regulated product/service by the ComCom) has to deal with handover links from Telecom Wholesale that are dimensioned at 32-48kps per subscriber. Assuming 10Mbit sync, 32kps per subscriber is 320:1 contention ratio!!

Isn't that something the regulator should fix? It shouldn't be just about who has the keys to the cabinets but what people (and ISPs) actually get.

Regulation is why we have this stupidly low limit. Regulation has just caused problems.

If the regulators would butt out and let telecom alone, then other ISPs would have to have built their own networks etc by now and we would have competition. The ISPs just buying off telecom us the reason that most NZers have a single method of getting internet which is constrained by some bone headed regulatory decision to dimension it based on usage figures from the stoneages of internet when everything was designed to work on dialup.

Richard rich.ms

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#404841 15-Nov-2010 13:23

richms:
ojala:

Ragnor:

An ISP selling ADSL over Telecom wholesale equipment (a regulated product/service by the ComCom) has to deal with handover links from Telecom Wholesale that are dimensioned at 32-48kps per subscriber. Assuming 10Mbit sync, 32kps per subscriber is 320:1 contention ratio!!

Isn't that something the regulator should fix? It shouldn't be just about who has the keys to the cabinets but what people (and ISPs) actually get.

Regulation is why we have this stupidly low limit. Regulation has just caused problems.

If the regulators would butt out and let telecom alone, then other ISPs would have to have built their own networks etc by now and we would have competition. The ISPs just buying off telecom us the reason that most NZers have a single method of getting internet which is constrained by some bone headed regulatory decision to dimension it based on usage figures from the stoneages of internet when everything was designed to work on dialup.

Sorry, Which companies do you know of that would spend the cash to build their own network going up against Telecom's network that has no oversight or regulation and covers 99.999% of the client base you are after?

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#404861 15-Nov-2010 13:58

Telstra clear managed it till they realized that it was more profitable to cry about wanting access to telecoms copper.

There is considerable fiber around Auckland CBD that is being priced stupidly because they can get away with it because they have no competition in that area.

The lines companies could have actually done something with their network of poles and ducts - yet they chose not to till the govt said they would pay a considerable sum for it.

Richard rich.ms

ojala

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Master Geek

#405139 16-Nov-2010 00:30

BarTender:

An interesting article: http://www.nbr.co.nz/article/telecom-loses-mobile-market-share-132804

The carrier enjoyed another big gain in XT uptake. There are now 839,000 on Telecom's 3G network, or around 40% of Telecom's total mobile customer connections.

That's a lot of customers..... And most of those will either be broadband cards, or Highspeed capible phones since they are all 3G.

A nice summary but the numbers don't really show the mobile broadband specific growth as such.

4,837,000 subscriptions in total, 839,000 in Telecom's XT network, Telecom -19,000, Vodafone -25,000. Population 4,367,700 (Wiki June 2010 estimate). Telecom ARPU 27 NZD. NZ Stats June 2010 ISP survey lists 299,400 for "Cellular, cable and satellite" which includes data cards but excludes smart phones.

In comparison; 8,070,000 subscriptions in total (June 2010),mobile broadband 1,152,200 subscriptions (excluding smart phones). Elisa +102,000 subscriptions, TeliaSonera +300,000, DNA +50,000 (all grow, they are the equivalent of Vodafone, Telecom and 2degrees but all have their own 3G networks countrywide). Typical ARPU 37 NZD (21 EUR). Population 5,373,989 this morning.

Other trends (Jan-Jun2009 -> Jan-Jun2010) include DSL -53,700 subscriptions, fixed telephone -180,000 lines, fixed telephone minutes -246,000,000 and mobile telephone minutes +421,000,000. Every minute lost in the fixed network comes back as two minutes in the mobile network.

I would have assumed people have moved from Telecom's CDMA to 3G XT for better pricing, coverage, modern handsets and other benefits but I might be wrong.

ojala

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Master Geek

#405140 16-Nov-2010 00:45

richms:

Regulation is why we have this stupidly low limit. Regulation has just caused problems.

If the regulators would butt out and let telecom alone, then other ISPs would have to have built their own networks etc by now and we would have competition. The ISPs just buying off telecom us the reason that most NZers have a single method of getting internet which is constrained by some bone headed regulatory decision to dimension it based on usage figures from the stoneages of internet when everything was designed to work on dialup.

Ok, we have different idea of regulation :-) In my idea their role is to make sure the market is competitive, competition is fair, competition happens and that incumbency advantage is taken care of.

If you're a competitor and find access to the exchange, cabinet, mast, cable route or wholesale too expensive, the regulator should be the partner to get it fixed.

In the case of NZ, I would see regulator as the instance to make sure that the small and local ISP's get fair and reasonably priced access and service without any artificial fees or ridiculous contention ratios (which should be small enough to be meaningless).

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