Quin reveals Telecom home fibre timetable
Telecom won't offer home fibre plans until early next year.
“By early next year 5% of homes will have UFB-built fibre passing them – not delivered into the home, but passing – and that is about the time we’ll have our broadband consumer services available,” acting CEO Chris Quin says.
I’m speaking to Mr Quin on Wednesday afternoon, soon after the Pacific Fibre news broke (more of which shortly).
So the time a Telecom customer can actually order residential fibre will be some time early next year?
But Telecom is in no rush to follow.
Mr Quin explains.
NEW PERCH: Acting CEO Chris Quin has turned a mezzanine meeting room at Telecom's central Auckland headquarters into a temporary office over the past four weeks (new chief executive Simon Moutter starts September 1).
“Some are putting their first foot out but … The reality is it’s a small number that have it available today. It’ll grow to about 5% by the time we’re ready and I think by the end of next year it’s about 28% - so it does grow quite rapidly through 2013," Mr Quin says.
“You might have seen the Geekzone story [about a fibre install] that took nine hours and five technicians.
“We can’t deliver a service like that because we’re the mass market guys.”
(And privately, the head of a retail ISP with more front-foot home fibre plans has fretted to NBR about the difficulties of connecting homes en masse, given difficulties with the handful of installs so far.)
A trial is under way in the North Shore, Auckland, suburb of Albany, involving several dozen homes.
Sports, cloud other extra services
Mr Quin also talks up value-added services – prudent given the move from copper to fibre means Telecom loses its home phone line business, once such a cash cow (all fibre connections come standard with a VoIP line, so you phone calls go over your broadband, not a separately rented line).
“We have a partnership with Sky. We are looking as part of our fibre services what other partnerships make sense.
"Not just content but cloud services at home and so on because just launching with another fibre service at a competitive price and gigabits and things isn’t necessarily going to drive the take-up.”
The thorny connection issue
And what of the thorny issue of connection costs? Orcon CEO Scott Bartlett and others have expressed concern to NBR that a free connection promotion from Chorus (responsible for close to 80% of the UFB by premise) expires at the end of this year.
From that point, customers could face a fee of $1000 to $2000 or more to connect fibre from the kerb to inside their house – the worst part being a retail ISP can’t give an accurate quote until they start digging.
Mr Bartlett fears few will sign up if they face a fee of $120 an hour for an unknown number of hours to cover the fibre install.
He says the world among ISPs is that Chorus will shortly announce its connections will stay free permanently (Chorus says talks with Crown Fibre Holdings are still in train).
Mr Quin adds another complication.
“The original spec was 15m from the road and many Auckland homes have been developed on the rear of a section that has been cut in half – and it ain't 15m [from the kerb]. Chorus and Crown Fibre Holdings know this is an issue and the message they’ve given is they’re working on this.”
Let’s hope they work through it.
It will certainly slow things up if Chorus makes connections free – but only up to the 15m from the kerb and 5m into a home goal stipulated by its UFB contract with Crown Fibre Holdings (and those aren’t as-the-crow-flies metres but include ducking and diving around obstacles and walls, etc).
The companies handling the balance of the roll-out – Enable (Christchurch), Northpower (Whangarei) and Ultrafast Fibre (including Hamilton, Tauranga and Whanganui) have 30m lead-in and 10m on-premise requirements in their contracts; Ultrafast has pledged free installs regardless of distance.
Mr Quin says he agrees with ICT Minister Amy Adams that residential uptake was always going to be slow at first.
“The highest obvious value right now comes out of corporate, it comes out of health, it comes out of education and they’re the places that we’re focused on.
"The Network for Learning – we’re absolutely bidding hard for that and that’s where the government will get return fastest.”
Busiiness fibre push
On the business side of things, Mr Quin – who usually heads Telecom’s Gen-i division – says there are around 4000 customers on fibre.
Around 65% of Geni’s customers have fibre reaching their premise, and around 15% are using it for data services.
Mr Quin says the UFB roll-out will help, but also that there is no waiting around in this market. The push is on now.
Naturally, Gen-i is angling not just to project manage the fibre being plugged in, associated upgrades in office network infrastructure and development of apps and service to suit the new high bandwidth environment.
Unlike the home situation, he doesn’t see connection complications. Service ducting will provide an easy route into most buildings, and UFB-subsidised fibre will help keep costs down.
Video? NBR is dubious
He sees three killer apps for business: video, mobility and collaboration.
“Video will become in the next three years more like the primary form of communication in business. So many devices have a free video client now.
“We’ve got Skype, Apple Facetime, Cisco Telepresence being delivered on iPads with a simple client through to high definition video in a full Telepresence room. So I reckon video will become a primary form of communication pretty quickly.”
Is that really the New Zealand personality? Wouldn’t most people prefer a voice call most of the time? Personally, I don't always want my boss or (much as I love them) my parents having a visual fix on me during most calls.
“Yes … but I think ease of use will make a massive difference,” Mr Quin replies.
“You know we’re watching behaviours in Christchurch. We were in four buildings around the square and people used to walk.
"We’re now in nine buildings around the edge of the city, people are videoing because they don’t want to lose that face-to-face.
“Christchurch is still difficult to drive around. They think 30 minutes is a long trip, we [Aucklanders] think it’s going to work … so, video will drive a lot of fibre uptake.”
Secondly, video will become a primary form of marketing, Mr Quin says.
“A lot of website marketing you see now goes quickly to video, the static image on a website is going to be replaced by video and that is vitally important all around the world.”
What about the home front. On Trade Me, too?
"I’ll be able to walk you around my immaculate 1992 Toyota Corolla, one lady owner.”
Fibre backbone for mobile, wi-fi
By mobility, Mr Quin means an office like Telecom’s new headquarters with saturation wireless.
“You've got to get off the radio [cell network] as fast as you can and onto wi-fi.”
That requires good office infrastructure, backed by a fast connection to the outside world.
In terms of collaboration, he means staff in different offices working as if they’re in the same place.
He also sees potential for everyone from thinly spread specialists to personal bankers using videoconferencing to save time and effort.
Fibre just makes life easier, says Mr Quin.
“A couple of our bigger customers are 100% fibre. They’re more agile. They’re never not able to roll out an app. If the CEO wants to send a video message to all staff, he can send it.”
On Pacific Fibre
Start-up Pacific Fibre announced it was ceasing operations just 60 minutes before I spoke to Quin.
I asked him for an immediate Telecom reaction.
"We don’t think capacity is an issue with Southern Cross. The capacity reach is there and will continue to be there," says Quin, who was scanning (often Southern Cross-hostile) reader comments on NBR coverage as your correspondent arrived.
"They compete in an international market and prices are falling in that market.
"I would assume the investors in that alternative knew all that and decided to have a look anyway.
"We’re a [50%] shareholder, that’s well known but we’re also a customer of Southern Cross so obviously we behave like everyone else which is we want more capacity and we want it cheaper over time.
"Those two principles haven’t changed. Prices are falling."
Read more contrary reaction from CallPlus, Orcon and Snap's CEOs here.