UFB nowhere near ready for prime time - Vodafone boss

Russell Stanners

The Ultrafast Broadband (UFB) rollout is stalled. Fibre has been rolled past 76,000 premises under the project, which is subsidised by $1.35 billion in taxpaper funds.

But Chorus, responsible for the majority of the scheme, says it has connected just 200 homes.

Chorus boss Mark Ratcliffe says UFB numbers won't take off until major ISPs launch residential fibre plans. So far, only Orcon has. Telecom, which holds around half the retail market, won't launch until early next year.

Arm wrestling over costs
On Friday, Vodafone NZ boss Russell Stanners told NBR, "We’d like to be in the market as soon as we can."

But "soon as" might be some time off.

"We’re waiting on clarification on the installation costs," Mr Stanners said. 

Like all retail ISP players (including a nervous Orcon), Vodafone is waiting to see if a Chorus free connection offer will be extended beyond the end of this year.

Chorus CEO Mark Ratcliffe recently refused detailed comment on the issue, other than to say talks with Crown Fibre Holdings and other parties were ongoing.

This is a crucial bit of arm wrestling for the NZX-listed company. Retail ISPs want Chorus to keep baring the cost of connecting fibre from the kerb to a home (the spun-off Telecom division has received $929 million in interest-free loans and non-voting shares from the government, but is already spending an average $3200 to pass each premise). Mr Ratcliffe told NBR the best solution would be one where the cost is spread across different parties. Retail ISPs fear if they have to bear the cost.

Retail ISPs fear customers will take fright if they have to pay $1000-plus for connection. They are also wrangles over internal wiring, and who installs, and controls, a gateway inside the home.

Installation nightmares
Beyond the thorny issue of who pays for an install, the actual experience is far from ready for prime time, the Vodafone boss says.

"I’m grateful to our pilot customers. But having seen staff and other people go through it it's bloody … it’s tough. We need to do better. We have to get that fixed before we launch because the customer experience is absolutely the key,” Mr Stanners told NBR.

"It needs a lot of work at a Vodafone end at a Chorus end. Or for that matter NorthPower, Enable and Ultrafast Fibre."

He added, candidly. "We had some customer feedback saying 'We really love it, the speed's great. But Vodafone you don’t want to go to the mass market until you’ve fixed that [install experience] because that was bad'." 

Trial installations for Vodafone, Telecom and others, have involved a small army techs crawling over, under and around a house for a day. Before fibre can go mass market, with hundreds of thousands of premises connected, that needs to improve.

"And that involves us negotiating with our upstream partners [Chorus, Enable etc] and that’s a tough set of negotiations to figure that out," Mr Stanners said.

Among other things, Joe Public doesn't know or care about Vodafone's wholesale and network partner.

"What we’re realising is that if we put our brand on something, the customer is saying is 'We don’t care who does the installation, it’s you guys," Mr Stanners said. "And we need to do a lot of work to get to the point where we’re willing to put our brand on it."

He, for one, is not surprised it has taken a while. 

"The government spent two years building up supply agreements and some very high level service requirements," Mr Stanners said. It would take some time to work out installation issues at the retail end.

T-Box on UFB?
Earlier, Telecom told NBR that once it does launch UFB plans, it will put a big emphasis on value-added services, including video - with an emphasis on sports (an apparent nod to its partnership with Sky TV, which allows Telecom to create a clone MySky box).

Mr Stanners told NBR that if his company's acquisition of TelstraClear is approved, his company will look at expanding TelstraClear's MySky clone (the T-box) from areas of Wellington and Christchurch covered by TelstraClear's HFC network to areas covered by the UFB.

The Commerce Commission had been due to rule on the takeover on Friday, but delayed its decision until October 23, citing the complexity of the deal.

This article is tagged with the following keywords. Find out more about My Tags

Post Comment

31 Comments & Questions

Commenter icon key: Subscriber Verified

Chorus does not want to connect customers to this network in any great hurry. Sure, eventually, by the time the decade's out, maybe. But it's more interested in making sure nobody else does it. It's got assets to sweat and no interest in write downs.

How can Chorus get away with a contract that allows it to charge customers for "non-standard installations" when most of Auckland and Wellington residential falls under that description?

Currently customers who are down drive ways are being turned away, customers who have shared premises are being turned away and Chorus is doing its damndest to make it difficult to connect those custoemrs that do make the grade. Nine hours to connect two pieces of fibre is laughable.

The government has given chorus a $900M tax free loan and put as few requirements on the company as it can. Why is it that chorus isn't an LFC like the others? Why is it they have access to the cash only once customers connect but Chorus gets the money front-loaded? Why are we paying to create a monopoly that's intent on building over the top of its competitors?

Someone at Crown Fibre Inc needs to answer these questions. The minister should stand up and answer these questions. Changes need to be made.

Reply
Share

We have problems because most of the decision making
at top level is made by people who do not understand the technology. Most people want mobile internet now. The idea of home based internet is out dated, it is a scandal that tax payers have funded Chorus in advance!

Reply
Share

Its you that don't understand the technology. You can't get 100Mbps on mobile, and for less the $100/mth.

Reply
Share

You can achieve a lot with $1.3b.
Don't forget the end-user costs of UFB based connections are subsidized - by (our) money that goverment gave to Chorus.

Reply
Share

Decisions were made by people who understand certain technology. Fibre optics is proven and solid, yet it may be outdated in decade or so (not long after UFB is completed). Taxpayers money should have better been invested in progressive technology (e.g. mobile). Unfortunately people who get to the top will not necessarily have their own experience with it (possibly also due to their age). They prefer to play safe. And in the end, they will do all they can now to ensure UFB will be "success" - 1. throwing more taxpayers money onto it and 2. by hindering the competing networks and technologies.

Reply
Share

This is a bit of a fallacy really. People want a seamless experience, they don't really care whether their data in the home is via their mobile data plan or the fibre to the home and a wireless router, except that the cost of the mobile data is so high. Most people will be glad to use their home allocation of data instead of chewing up their mobile gigs.

Reply
Share

I read somewhere that there isn't enough mobile spectrum to even carry half of the future predicted mobile traffic. So you're spot on, the only way it can be carried is through a mix of mobile and fixed stuff working together.

Reply
Share

Gets facts straight, I'm with Snap and they've had home UFB pricing out for yonks.

Reply
Share

NBR covered Snap's launch. I'm talking about the five top-tier ISPs that dominate the home market (Telecom, TelstraClear, Vodafone, CallPlus/Slingshot and Orcon).

Reply
Share

get your facts right read the article it's about install costs as well

Reply
Share

Stop moaning and get connected!

The first fax was a waste of time until the 2nd one was built. The faster you stop moaning and get connected the better.

Yes - I'm one of the 200. Loved every step of the way. Chorus did a fab' job installing mine. Loving the end result.

Chase your ISP - or better yet - move to one who is already doing it - but just do it.

Reply
Share

There has been fibre in our street ( and much of Howick and Pakuranga and no doubt other areas ) for well over 15 years and apart from a test run with TV it is still unavailable to connect to. The green fibre street riser is about 300mm away from our grey Telecom riser. So near and yet so far.

Reply
Share

I'd sign up and I live in central Auckland but so far I'm not on the map.

I'd love to know how the rollout plans were decided in the first instance. Who had sign off on going to Ponsonby and Parnell and the Shore? What about the places where fibre doesn't already exist?

Reply
Share

The rollout plans are worked through by Crown Fibre Holdings in conjunction with the fibre providers and I think councils as well

Reply
Share

"...with an emphasis on sports..." So what is the point of paying more if all we get is the same content? Is the only beneficiary of UFB to be Sky? As to the fax analogy; It was successful because IT DIDN"T NEED new wiring.

Reply
Share

You are unfortunately right. The main content will be movies (all sorts as you can imagine) and sport. So UFB is in fact creating a new distribution channel. Main benefitiary are media company (bigger demand). No issue except it is funded by our money (taxes). If you don't watch TV much - tough luck:(

Reply
Share

Cmon guys. We aren't the first in the world to do this. Get somebody across to the UK or the US, find the cheapest fastest way of connecting then come home and just do it!

Reply
Share

Curious as to why you don't think they'd already be doing this!!

Reply
Share

Whats the point of ultra fast internet with ultra low data caps...

given a 60GB data cap per month and a 50Mbit/s download rate that equals 2.73 hours of use at full speed per month..... then the extra data rates kick in and you get an ULTRA large bill

Reply
Share

Yep - data caps are an issue - and yes I can download very fast (am that 1 of 200 - fax...).

Orcon Zero rate a load of stuff and TV content will be zero rated as they will co-host in the same data centre.

Its actually the UPLOAD that is the killer app for me. Hi def video conferencing - means I can work from home. The old ADSL 800Kb/s sucked. 10Mb/s up - Brilliant.

Reply
Share

How about a plan with no fixed "line rental" just a price per gb. Powershop manage to deliverer power that way. All the plans I have seen so far have the built in fee a la all the "naked broadband" plans.

Reply
Share

Why do we still pay for data within nz. With Fibre a around the country there ought unlimited national data. Or at least rate it at 1/100th of an international gb?

Reply
Share

Using fibre to deliver broadcast TV is the equipment of using a phone line to deliver radio. satellite and terrestrial transmitters can deliver tv way more cheaply. Sure ADSL can deliver video on demand. UFB is a fatuous wast of money to subsidise a TV company.

Reply
Share

You don't know what you're talking about

Reply
Share

I cant see the Ultra Fast Broadband being a success with private dwellings if it is user pays for installation. What percentage of the population live in a rental property. Very unlikely these places will ever be hooked up - the landlord wouldnt pay the costs and the tennant, even if they could afford it, is very unlikely to pay as they normally dont have more than a 6 month agreement on the rental property so have very little guarantee that they will get a fair return on the money they would have to fork out to get hooked up..

Reply
Share

I find it disturbing that Telecom / Chorus have sucked vast sums of cash out of our economy, then get a fat interest free loan from the taxpayer, and then laugh and say "sorry, we can't make enough profit on this". Seriously, we've paid through the nose for long enough.

Reply
Share

The biggest problem with FTTH is that most homes (about 90%) need to be rewired as the phone cables are either ancient or connected in such a way that it cripples the speed. Thats why they need "a small army of techs". And this is not a problem peculiar to NZ - it affects all countries (its just that we are ahead of the game vs Aus, UK on this)

Reply
Share

Actually, most homes are wired for voice only, not data. With DSL the data is delivered TO the home via the voice wiring and hence the speeds can be affected by dodgy voice wiring. With fibre it is an entirely new cable (fibre instead of copper) all the way to the home so dodgy voice wiring is not an issue in terms of the data getting to you. However. the voice wiring will not distribute the data within the home - but that is not peculiar to fibre, you have the same issue with DSL. Wifi or data cabling (CAT5e and above) will solve that.

Reply
Share

In response to #18

As usual throughout history when change is introduced the ignorant naysayers pipe up. Fibre is not just about faster speed so those who do nothing but watch tv all day can get their sky in a different manner.

When the cables were laid in to our house to provide us the wonderful invention of the telephone, the concept of delivering anything other than through electrical analogue modulation didn't exist.

It is a testament to the extremely high value of digital communications that we have been able to manipulate the two pairs of wire that come in to our houses to deliver the high bandwidth that we have.

But fundamentally that's not what they were designed for.

Fibre doesn't use electricity to encode signals, it uses light. There are huge advantages for this including significantly higher data capacity, low power requirements, extremely low loss, much longer cable length, as well as avoidance of crosstalk and external interference. The last point is critical.

Fibre has been around for 30+ years, and is the right platform for the next 50 years of innovation - just as we have done with our two pairs of copper wire for the last 50.

It's not about getting your sky sports to you through the ground, it's about putting in place the new foundation to build on from here. If watching rugby is what pays for that in New Zealand, then great.

But don't be so bloody short sighted, you twit.

Reply
Share

oops. two wires, not two pairs

Reply
Share

The biggest problem is the whole project has been rushed right from the start. A lot of the design is being done by people with no industry experience and minimal training. Added to this is technology which is brand new in this country and relatively new everywhere in the world. Contractors were given this technology with no guidance to installation and expected to meet exorbitant targets. Only through massive overtime and kiwi engenuity were these targets met. Like any government project it is being politically driven by Crown Fibre Holdings whose knowledge of fibre optics and cabling is non existent and they are making the rules. Rules which in most cases do nothing but frustrate the people lower down the chain, people who know the industry inimately but have no input into what is. In regard to wiring homes most new homes built in the last ten years or so wont need any wiring as they should all be wired with cat5 data cabling. Most other houses should be able to be rewired by two skilled staff in a day. Therein lies another hurdle, the massive shortage of skilled staff. A worlwide problem not just an NZ one.

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7749 0.0052 0.68%
AUD 0.9496 0.0027 0.29%
EUR 0.6310 0.0071 1.14%
GBP 0.4948 0.0008 0.16%
HKD 6.0106 0.0406 0.68%
JPY 91.9710 0.5160 0.56%

Commods

Commodity Price Change Time
Gold Index 1189.4 -7.590 2014-12-17T00:
Oil Brent 61.2 -2.590 2014-12-17T00:
Oil Nymex 56.8 0.570 2014-12-17T00:
Silver Index 15.9 0.176 2014-12-17T00:

Indices

Symbol Open High Last %
NZX 50 5496.6 5532.8 5521.3 -0.05%
NASDAQ 4712.4 4724.6 4644.3 1.57%
DAX 9711.6 9811.1 9544.4 2.79%
DJI 17367.8 17625.5 17356.9 1.25%
FTSE 6336.5 6466.0 6336.5 2.04%
HKSE 22878.3 22935.0 22585.8 1.09%
NI225 17143.0 17274.2 16819.7 2.32%