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Vodafone says Chorus has suspended industry talks over faster, cheaper fibre

Vodafone says it's disappointed that Chorus has suspended its scheduled Dialogue Briefing around new, faster fibre services.  

Last month, Chorus announced an industry consultation on a proposed new range of Ultra-fast Broadband (UFB) products, giving retail service providers (RSPs) like Vodafone the opportunity to offer faster speeds at a cheaper price.

This process has now been postponed by Chorus, Vodafone says [UPDATE: Chorus spokesman Ian Bonnar says: This is simply a postponement this component of an industry consultation session – not a withdrawal of the proposed upgrades. It would not be appropriate to progress with an industry consultation at this time while we work through the implications for our business of potentially significant reduction in our revenues and therefore our ability to invest.]

Chorus has been in a holding pattern, to a degree, since the government hired EY Australia to independently review the company's financial position, and its capability to complete the UFB rollout if the Commerce Commission's determination for copper broadband price cuts is implemented. It has already suspended its dividend guidance. Now it looks like another toy has been thrown out of the cot. ICT Minister Amy Adams says the review will wrap up by year's end.

Vodafone has been pushing for faster speeds to create a clear distinction between copper – particularly VDSL – and fibre, making UFB more compelling and attractive, so customers find the decision to shift straightforward.  Whilst the Chorus proposals did not go as far as they needed to, Vodafone supported the move as a step in the right direction.

Vodafone CEO Russell Stanners says New Zealanders deserve faster speeds and better products than are currently offered by Local Fibre Companies or LFCs (Chorus - responsible for around 70% of the rollout, plus NorthPower Fibre, Enable and Ultrafast Fibre).

“The current entry level UFB speed on offer of 30Mbps down is dismal when compared to international benchmarks and what’s currently available on copper networks in New Zealand.  The introduction of VDSL products in the market has made entry level fibre offerings redundant.

“The UFB initiative was premised on improving New Zealand’s international competitiveness, but we risk falling behind the speeds and services available in other countries – such as Singapore, Japan and Korea.”

Mr Stanners continues: “If Chorus – and the other LFCs – feel unable to provide the layer 2 services we believe customers need, the government should look to bring forward the unbundling of the fibre network and let others have a go.”

Vodafone's comments come at a time when Telecom is testing the waters for a new, no-frills ISP centred on ADSL and VDSL plans.

Comments and questions
18

Again only self-interest and trying to get something for free. How can you compare Japan and Korea in broadband services with NZ, population numbers anything to do with that? Or geographic problems like people per km?

I fail to see how this is self-interest, the artical clearly states that Vodafone has been pushing for a better UFB service. A better service and better prices will be more attractive to consumers and might go some way to improving upon the low UFB up take. It is encouraging that Chorus was consulting industry partners on how to deliver a faster cheaper service and is genuinely dissapointing for everyone

I think you'll find the self interest is in Chorus, playing games while regulation hangs over them.

Using fibre to deliver 30/10 is like building a motorway and insisting everyone drive at 50kph.

Fibre should be 100Mbit/s then 250 then 500 then 1000Mbit/s. The technology can do it, the network is up to it, so why aren't we getting that?

Actually Paul,

100Mb/s is available now.

Although it is only 94Mb/s, that is pretty fast compared to VDSL

John,

You're missing the point. Paul knows 100Mb/s is available now (he's a bright guy), his point is that 100Mb/s should be the entry point and it should ramp up from there, not be the top speed offered.

I think the recently published statistics on the speeds people are actually getting makes it pretty clear that the "motorway" in theory may be able to deliver higher speed, but the "on & off ramps" , "traffic control", and "management" are woefully inadequate.

They are only delivering 100mbit 50% of the time between midnight and 7am, yep when no-one is using it..... They might as well just tell everyone they can have 500mbit, the fact you wont get it, doesn't seem to affect the sales and marketing machine...

15 kph more like it! Its a ploy to get people on fibre at a price close to copper (low pain) and still charge people who really want some band width. You can get the fast speeds, if you pay. Even a gig, for a pri$e.

Didn't Stanners write to the government saying that if Chorus introduced faster UFB plans then Vodafone (and all ISPs) would support the government legislating to set the price? Chorus now seems to be playing by the very rules Vodafone proposed: if, and only if, they get higher copper prices they will then introduce faster fibre plans. It seems very hypocritical and opportunistic for Vodafone to now backtrack from their earlier position and criticise Chorus!

So where is VECTOR with its fibre?

Stop continually hand-ringing over whether or not each one of us deserves UFB fibre to our door. As always we are asking ALL the wrong questions and, as always coming up with ALL the wrong answers! Firstly it is becoming increasingly obvious that this tiny nation of ours simply cannot afford to run UFB fibre to every door in the land. The truth is (from one who works in the industry), that UFB to the door will never come to more than 50% of NZ homes. Anything else you have read or heard is a best deliberately misleading, or at worst an outright lie. Instead we need to look at what industry-leaders like Alcatel-Lucent are doing in Europe with existing copper network.

Which is fine - except that the copper network is in a dire state as it is and can not support high speeds. I live in a central Auckland suburb, have upgraded the internal wiring in my house and can only get, on a very good day, and at off peak hours, a little under 1Mb/s download; and don't even talk about upload.

If the copper network were any good then it would be reasonable to say that we should stop investing in fibre and concentrate on getting fast copper - but we have to invest in that too; so the question is which is cheaper to do? Replace the copper or install fibre?

So if Vodafone are so keen on high speed plans cheap, why is most their cable network not on high speed plans and why isn't their highest speed plans really cheap? Practice what you preach Vodafone?

Exactly. They are trying to bleed Chorus. Voda now owns the Telstra network.

If Gigatown is going to be be better than standard UFB, and deliver benefits and growth to one town - shouldn't UFB speed caps be removed completely so NZ can get these benefits as a whole?

No. Anyone on fibre can get a gig for a price. Most towns do not have enough back haul to provide a gig (uncontested, i.e. always a gig) for many users. And almost no-one needs a gig uncontested right now. A home could simply not watch that many movies all at once. Its all smoke and mirrors marketing by Chorus to distract from the real issues and get some interest in UFB. And Giga town, whoever you are, watch out for the next price review...

National pushed UFB onto the country way ahead of real demand. It is simply not compelling for most users at its real cost. So take up has been low. Asking Chorus for cheaper prices is unfair in one sense. With an ageing copper network they had no choice but to bid and costs have escalated beyond budget. Chorus needs to assess the trade off between (lower) pricing which is essentially uneconomic and getting faster uptake to stem the bleeding. Rock and a hard place. It's their commercial decision. But the country can not expect Chorus shareholders to provide UFB at less than its real cost. And that is what Voda and others want. The reality is that UFB costs more than first thought and few really need it yet. Someone has to pay for it. Perhaps National bit off more than it could chew.

VDSL is not a direct competitor to the entry Fibre plans, and here is why:
Not every household can get VDSL - it is highly dependant on distance to the box/exchange and whether or not you have a noisy copper line.
The speed of VDSL is not guaranteed - it depends on your line again.
VDSL is better than ADSL2+ but it is not fair to compare it to Fibre at all.
It's not as good as fibre.
However, I cannot get Fibre at my house for another 12-18months and I want to get VDSL in the interim. My situation is a perfectly good example of why we need VDSL now. If I could get Fibre, I would, and at 100Mb/s too.