Telecom 4G launch in October; chooses Huawei over long-time network partner Alcatel-Lucent

Telecom Retail CEO Chris Quin

Telecom will launch a 4G mobile service in two-thirds of Auckland in October, and parts of Wellington and Christchurch by Christmas.

Notably, Telecom's long-time mobile network partner Alcatel-Lucent has been displaced by China's Huawei, which will build the 4G network.

Both Alcatel-Lucent and Huawei were involved in Telecom's 4G trial.

Vodafone launched 4G in Auckland in February, with plans to expand to Christchurch by May and Wellington by September. The carrier's standard 4G plans top out at 2GB (meaning that although you could theoretically stream a high def movie to a 4G iPad by cellular, you would blow monthly data cap within two hours). Outside of its ads, Vodafone says it doesn't recommend 4G for such big downloads.

All eyes will be on whether Telecom will charge extra for 4G (Vodafone has a modest $10 a month premium) and, more, whether it will be more generous with its data caps - remembering 4G can be just as fast as many fibre connections (a theoretical top speed of 150Mbit/s is claimed for Telecom trial 4G network), and Telecom's smallest fibre data allowance is 50GB a month.

Pricing and plans won't be released until closer to the October launch.

Today, Telecom Retail Chris Quin has been talking about data-intensive apps such as video, shared education and shared working - activities that would quickly chew through a 2GB cap, or anything in single digits.

2degrees tells NBR it plans a 4G upgrade, but will not real a timetable.

Although Vodafone offers 4G-capable smartphones from Apple, Samsung and others, it is not offering 4G data stick. Telecom trialists have been using 4G data sticks made by Huawei - indicating that should be an option at launch, too.

Telecom's initial 4G service will use 1800MHz spectrum the company. It anticipates picking up a chunk of 700MHz spectrum in the government's auction of spectrum freed up by the digital TV switchover. The auction is due in the third quarter.

Huawei expands NZ footprint - again
Huawei already has a substantial footprint in New Zealand through being 2degrees primary network partner (and through a $100 million credit line, the Chinese company has also emerged as one of 2degrees' main financial backers).

In the landline world, Huawei supplies gear for Vodafone's "Red Network" around unbundled Telecom exchanges.

The company also won a contact to supply and provide management services for Ultrafast Fibre, the winner of the UFB contract in Hamilton, Tauranga and other central North Island areas. Huawei is also supplying some of the fibre kit for Chorus' leg of the Rural Broadband Initiative. It has also landed business with Christchurch UFB winner Enable.

Alcatel-Lucent's relationship with Telecom was strained after the bungled XT launch. An un-named supplier - widely presumed to be Alcatel-Lucent, paid Telecom $41 million in compensation over the two years following the outage, according to Telecom annual reports.

At the same time, pundits say Huawei is offering carriers keen pricing as it seeks to build market share.

Today, Telecom chief technology officer David Havercroft said Huawei was 18 months ahead of competitors in 4G technology.

Asked about security questions raised around Huawei by some governments, Telecom said it the Chinese company's gear would undergo testing and certification. The process would be no more or less rigorous than that applied to any other vendor.

Telecom will address capital expenditure implications at a separate briefing on May 16.

Shares  [NZX:TEL] were up 0.63% to $2.42 in midday trading.

Telecom 36-month NZX performance. Chorus spin-off Nov 2011. S&P Capital IQ. Click to zoom.


RAW DATA: Telecom statement

Telecom 4G LTE to go live in October 2013

Telecom New Zealand announced today that it will have 4G LTE live on a large part of its Smartphone Network in Auckland by October.  The company will then extend 4G LTE coverage to Wellington and Christchurch by Christmas, and expects to have 4G LTE live on close to half of its nationwide Smartphone Network during 2014.

Telecom Retail CEO Chris Quin says that 4G LTE will add to the quality, real-world mobile experience offered by Telecom’s Smartphone Network.

“This is another way we are helping Kiwis get better connected. We are very pleased with the current network’s performance across both voice and data and the feedback from our customers has been very positive. 4G LTE will build on our steady programme of investment – taking our customers’ experience of the Smartphone Network to the next level.”

Telecom has increased the speed, coverage and capacity offered by the Smartphone Network over time.  Its programme of investment has included installing dual carrier HSPA+ on more than half of mobile sites, having fast backhaul to 90% of mobile sites, and - from mid 2013 – rolling out state-of-the-art Optical Transport Network (OTN) technology to the network core or ‘backbone’.

Mr Quin says, “Telecom is also continuously extending our network coverage.  We’re co-locating on all of the Government’s rural broadband initiative (RBI) sites where we don’t already have coverage, and we’ve completed a trial over summer of free public wifi, which involved more than 140 ‘hotspots’ rolled out to holiday destinations across the country. We have had a very positive response, and are looking at how we can make this service available to customers more widely.

“If we are successful in the 700MHz spectrum auction, 4G LTE will also allow us to significantly improve coverage in rural areas.  We intend to install 4G LTE on RBI sites that we build from early 2014.”

Gen-i CEO Tim Miles says, “This investment will build on our existing network capabilities, ensuring we continue to enable New Zealand businesses to find new and better ways of engaging and serving their customers in an increasingly mobile and data-centric environment.

“Together with Gen-i mobility services and the flexibility to deliver applications and services across our Smartphone Network, the rollout of 4G LTE will support our clients in doing business anytime, anywhere in the coverage areas and via a range of devices.”

Exciting future possibilities
Telecom also announced today that it has selected Huawei to build its network of 4G-capable mobile sites – known as the eUTRAN.

Chief Technology Officer David Havercroft says, “Huawei’s selection was based on two main factors. The first is that they have extensive experience, having built 73 LTE networks in 42 countries.  The second is that they are truly pushing the boundaries of LTE technology.

“Over the past 3 months we have been trialling Huawei’s 4G LTE technology in Auckland and Rotorua.  Our testing has encompassed some very exciting new developments like ‘carrier aggregation’.  Carrier aggregation allows us to use two different spectrums simultaneously, and in our trials it produced maximum peak speeds of up to 250Mbps.

“While such technology is some way from launching commercially, it is very exciting to be working with a technology partner who has this level of capability, and a massive commitment to research and development that we can bring to New Zealand.” Mr Havercroft says.

Cisco Systems will build the ePC (enhanced Packet Core), which processes and transports data through the network. Cisco is a global leader in mobile IP and core technology, with best in breed technology, which offers inter-operability between different vendor technologies.

As previously announced, Ericsson will build the new HSS (Home Subscriber Service) and the replacement HLR (Home Location Register) the central ‘brains’ of the network, a database that holds all customer profile information.

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34 Comments & Questions

Commenter icon key: Subscriber Verified

So a Alcatel lucent 3G WCDMA network with a Huawei 4G / LTE network? Can't get much more fail than this!

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All credit to Telecom for having the balls to change.

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Have you not heard of standards? Its not for no reason that mobile communications are heavily standardised. And the EU has made sure of it - standardisation didn't come by accident.

Mobile tech has always been designed (from early gsm days) so you can mix different vendors.
No big deal to have huawei 4g kit.

Of course there are anyways interoperability problem but you get that even with a single vendor ironically enough.

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And then you have some Core elements from Ericsson as well, OMG.

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Hi Paul, it seems you dislike ALU / Huawei / Ericsson - all three main vendors. Who do you like who can you trust, then?

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Trust in one vendor for the RAN is a bit of common sense. Why not get a Ericsson / Nokia / Huawei Single RAN. Even ZTE would be better than a mixture of what Telecom have chosen.

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Sure it will works better than the Red guy.

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@Chris are you kidding? Telecom are going to have another XT network launch on their hands. Wait for the finger pointing for network faults. Alcatel will says it's 4G and Huawei will say it's the Alcatel fault, then they will pick straws who will point the finger at Ericsson. Good luck to Telecom, but it's got "fail" written all over it.

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Paul, it's a proven fact for any telco to get more for their buck they would need to adopt more than one vendor.

As far as the 3G and 4G network goes, they will separate entities to each, just like any 3G, 4G networks. I don't see where the finger pointing will come.

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3G and 4G networks are not separate entities. What a load of BS. Clearly, you do not have a clue and are wasting time posting a comment! You will need hand off between the 3G and 4G network, what about when moving in and out of 4G coverage? I don't have time for idiots. Get a simple 3G / 4G network diagram up in Google search!

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Paul, please try to understand the question before you make smart remarks. It obvious something is bugging you. I understand there will be handovers and some common signalling required. As far as the 4G network goes, it's brand new. How does that become a single entity the existing umts network?

Get yourself checked, mate - it's a small industry.

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And no, this ain't SRAN either

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3G and 4G may be separate entities but they have a critical reliance on each other. 4G needs to fallback to 3G for all voice calls, meaning handover between the two technolgies becomes critical.

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Except for the fact that no LTE network is doing voice yet. They all use LTE for data only and all calls are 3G.

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It's pretty clear who Paul Levin works for.

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Burger King?

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Brave call by the same people who brought CDMA into Telecom. Is Alcatel managing the 4G network? Imagine French American managing its own 3G, plus Chinese, Swede, American network elements ... Wow! Vodafone Hutch Aus has a less complicated setup and look at their network performance and its market share. Paul Levin is right. They should have stayed with Alcatel. 2 wrongs do not equal 1 right. Guess Vodafone and 2degrees are laughing now. I am selling my Telecom shares - they don't deserve my time and money.

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Perhaps Alu, they may lose managed service contract, too. Doesn't help them when they are taking the operations to India. In fact, that is far more concern than looking after different vendors. Besides, TNZ has a variety of vendors that Alu manages already, so they should already be used to it.

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D Amps was where the technology issues started for Telecom !!!

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Another 'anonymous' Vodafone employee under a pseudonym? What relevance is 2degrees in this, they haven't even announced plans for 4G!

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Huawei sucks...

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Jeez, u ain't kidding

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"Cisco Systems will build the ePC (enhanced Packet Core)"

What is happening with the Juniper MSC?

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Clearly, Telecom is taking savings where it can. They did this with XT (which was crazy given the millions they paid Paul Hamburger)... If they cut corners this will, indeed, be a big fail. That said, being able to get a continuous call happening across the harbour bridge on Vodafail would also be nice.

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Holding mobile calls over the bridge is not a issue on Vodafone. Also, 4G coverage is quite good as well right across the bridge

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Ask any 2degrees tech about Huawei. Support is woeful, but so is Caro St. What's the difference between Huangdong or Hamilton? One place is a dump and the other is called Huangdong.

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Vendor bashing is not new and I don't believe we ever had a vendor which is spoken very highly of.

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This sounds like 10 years ago - let go for CDMA because it is a better radio technology than GSM. Where is Telecom strategic business intent here - a lab to play with toy? How is this going to help Telecom to win business? I would think that other factors would be more important to consider.

“Over the past 3 months we have been trialling Huawei’s 4G LTE technology in Auckland and Rotorua. Our testing has encompassed some very exciting new developments like ‘carrier aggregation’. Carrier aggregation allows us to use two different spectrums simultaneously, and in our trials it produced maximum peak speeds of up to 250Mbps.

“While such technology is some way from launching commercially, it is very exciting to be working with a technology partner who has this level of capability, and a massive commitment to research and development that we can bring to New Zealand.”

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Tall poppies

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Alot of geek speak in the comments so far. My question is:

Why do I need 4G (compared to 3G on my iPhone/iPad) unless the data caps are significantly increased? App refresh and webpage loading is pretty much fast enough, given my data cap isn't big enough to warrant watching video. Unless convinced otherwise, I would rather spend $10 per month extra on additional data cap than additional speed.

Having said that, I am glad they are going ahead with it as it will hopefully result in bigger data caps and increased speed for the same/lower cost going forward. (is that freeloader principle?)

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I think before starting any "big fail" comments on any vendor selections, we should look into actual basic implementations first.

As for "Huawei", despite how many R&D engineers they have, go check their basic security configuration syntax you will know if they are secure or not. Their R&D only concern if the *service* is working or not, and security basic management of the actual device may not be on the agenda. (oh, no! did I just gave them a hint to sort out their basic Cisco 101 vulnerability ?)

For "Alcatel-Lucent", unfortunately, speed is not their thing. Asking them to do anything is *expensive* and takes forever. Unless Telecom start setting the rules, Alcatel-Lucent will continue this behaviour to make simple things difficult and resist to work with other partners.

Finally, a note to Mr Havercroft: there is no such thing as cheap + quick = good. (go and do your maths, any vendor promise they can do anything for very low price, it means you are sitting on a timebomb waiting for big fail to occur).

Note: they must have shown you their fancy R&D in HQ, right? Don't get the wrong idea, they will never send those troops there to assist you. All you will get is around 10 people if you are lucky, and rest will be the usual copy and paste to the big fail launch date.

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Then perhaps you may be able to explain their luck overseas. As for security, there ain't enough doors with any vendor, including Cisco.

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I'm eager to know what the basic security configuration syntax you have output?

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Why select Ericsson for the HSS/HLR replacement when O2 UK will tell you all about their two-day outage woes late last year ... and Ericsson have never been the cheapest or most advanced...
As for the 3GPP standards bodies, you will find that the Chinese equipment vendors with their big development budgets have been leading the way in LTE evolution, and not the traditional old guard, which is validated by the number of LTE patents that they currently hold.
What frustrates me with all this is, as there should be no politics in sport, there should be no politics in technology selection, as each and every NZer is impacted in some way by the decisions made by the ill-informed and easily swayed so-called senior representatives within a publicly listed company, who more than likely have no real telco pedigree at all to qualify their decisions...

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