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Vodafone launches VDSL, holds off on surcharge

UPDATE / January 23, 2013: Vodafone has launched a series of plans based on VDSL - the fastest type of copper broadband.

Where Telecom (below) is charging $10 extra over its regular copper broadband plans for VDSL, Vodafone will charge a $10 premium after 12 months.

Vodafone VDSL plans including a home phone line start at $85 a month (including an 80GB data cap), or $75 for Vodafone mobile customers.

Naked (no home phone line) plans also start at $85 a month (including an 80GB data cap), but Vodafone mobile customers get a $30 discount.

Vodafone says VDSL speeds range from 15-70 Mbit/s downstream to 5-10Mbit/s upstream, though speed will depend on location (copper bandwidth degrades with distance from the nearest phone exchange or cabinet), local line conditions and other factors. 

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Telecom launches VDSL turbocharged copper broadband - and fronts on premium charges

UPDATE / July 8: Telecom has launched its VDSL plans today - VDSL being a turbo-charged form of broadband over copper that offers fibre-like speeds (at least for the 50% or so of urban folk who live close enough to a phone exchange or cabinet).

VDSL technology has been around for years.

It offers three to four times the download speed of ADSL (the type of copper broadband most of us use today) and five to 10 times the upload speed (Telecom's official range is 15-70Mbps downstream and 5-10Mbps upstream)

But like other ISPs, Telecom has been motivated to finally launch plans because network operator Chorus recently dropped the wholesale price of VDSL to match ADSL

Telecom is offering a VDSL plan with a 80GB data cap for $95 a month - a $10 premium on its 80GB ADSL plan. Similarly, a 150GB VDSL plan ($109) and a 500GB VDSL plan ($129) are $10 dearer than their VDSL equivalents. Business plans start at $131 for 200GB.

There is also a $99 setup fee for home users who commit to a 12-month term (non-contract it's $299), and $199 for business.

A VDSL modem is included in the price.

Why the price premium?

Earlier, Telecom retail CEO Chris Quin told NBR that even through Chorus had equalised the monthly pricing between VDSL and ADSL, it had also whacked on a setup fee, which Telecom was passing on.

Specifically, Chorus is charging Telecom and other retailers a $5 per month per customer fee, spread over 30 months.

Telecom says the balance of the $10 premium is used to subsidise the "free" VDSL, a required master splitter and the greater bandwidth demand on its network from VDSL.

The company is pitching VDSL as a "stepping stone" for people still waiting for UFB fibre to reach their neighbourhood. On that point, Chorus - responsible for around 80% of the UFB by premise, released its 2014 - 2016 rollout plan today.
 
Snap sharpens pricing
This afternoon also saw Snap sharpen its VDSL offeriing.
 
From tomorrow, the ISP will offer a 100GB plan for $85 (or $95 with a phone line). Business plans at the same price points have 75GB of data, but add more calling options.
 
Snap is also offering VDSL customers who sign up for a two-year term a 100GB per month data pack free (normally $15). This includes unmetered nights between 1am-7am.The free is data valid for the two-year contract term.
 
Unlike Telecom, Snap offers free installation and wiring. But where Telecom offers a free VDSL modem, Snap charges $345 to $395 on a 12-month contract. 24-month contract options include a free modem.
 

Telecom, other big ISPs finally joining VDSL party, offering much faster copper broadband

May 15: Wholesaler and network operator Chorus has this morning cut the price of its VDSL to a "mass market" level, or the same price ISPs have to pay for other copper lines.

The move has finally nudged big ISPs to embrace this faster form of copper broadband, which has so far been pushed by smaller-to-mid-tier ISPs, most notably Snap.

Some see VDSL (which is much faster than the ADSL used by most homes today) as a good alternative while you wait for fibre to come to your neighbourhood under the Ultrafast Broadband (UFB) rollout. And as a useful way for people to get acclimatised to the benefits of faster broadband.

Others say VDSL is all you need for today's internet, full-stop, given the technology can deliver speeds around the level offered by the cheapest fibre plans (30Mbit/s down, 10Mbit/s up).

The catch: you have to live relatively close to the nearest phone exchange or cabinet to get the full effect (unlike fibre, copper bandwidth degrades with distance, and this effect is exaggerated with VDSL). That rules out around half of urban households.

Telecom - which holds around 50% of the residential ISP market - has been conspicuous in not offering a VDSL plan.

Now, that's about to change.

"This month, we initiated a commercial VDSL pilot with a small number of selected customers to explore how it might be made available more widely," spokesman Andrew Pirie told NBR Online this morning.

"We also have an internal staff trial underway (I’ve been connected at home via VDSL for a few weeks, and it’s working great, much faster than ADSL2."

Telecom is now looking to move to a full commercial launch, Mr Pirie says. Timing and other details are still to be confirmed.

"We agree with Chorus that VDSL is a technology that provides an ideal ‘stepping stone’ to fibre, bringing better broadband sooner to those customers who are not in-line for Ultrafast Fibre in the short term," Mr Pirie says.

CallPlus/Slingshot Mark Callander told NBR this morning, "CallPlus will be deploying VDSL services from our own exchanges in the next few months and we will also be wholesaling Chorus VDSL services where we do not have coverage."

An Orcon spokesman told NBR the company is currently testing VDSL ahead of a launch. No date has been set.

A spokeswoman for Vodafone said the company was accessing the Chorus price cut, and is still accessing whether to launch a VDSL service (Vodafone has previously trialled VDSL. Two other factors: It is the only major ISP not to have launched UFB plans, and it has a third broadband option on its hands through the Wellington and Christchurch hybrid fibre-cable networks it gain with its purchase of TelstraClear).

Might get pulled
The question now: will VDSL make UFB update even more sluggish?

Notably, Chorus says in its statement (below) that it won't sell VDSL once its fibre rollout is complete in any given region and that "Chorus may also review the ongoing provision of VDSL if its continued availability affects fibre uptake in Chorus’ UFB areas." Ouch. If you want VDSL, get in quick.

The extra charge is disappointing, but I agree with Mr Quin that VDSL will still be a good stepping stone to fibre. Certainly, its drawn raves from earlier adopters at Snap (the second-tier ISP that's offered VDSL for some time now), and among  Telecoom trialists.

There was sunnier news on the UFB, 4G and Geekzone crowdsourced modem fronts. Read about that, and the latest on Telecom's layoffs, in "Five questions with Chris Quin" in NBR Weekend Review on our home page Saturday and Sunday.

ckeall@nbr.co.nz

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Comments and questions
25

"Chorus may also review the ongoing provision of VDSL if its continued availability affects fibre uptake in Chorus’ UFB areas."

Good to see Chorus picking up where old Telecom left off on the monopoly front. Who cares what *customers* want, it's what Chorus wants that matters.

Sigh. Wouldn't be happening if UFB had been given to Vector.

Erhmm - UFB wouldn't be happening if UFB had been given to Vector :(

Your cynicism doesn't makes sense.

First, why would you want to run two 'networks' side by side when the price points for the data is exactly the same for each, except the one that delivers faster speeds, costs far less to maintain than the other 'old' one? It would be like building a new motorway right next to the old one that's at full capacity, causing congestion and costs a heap to it keep open and running. That makes no sense at all.

Second, if UFB went to Vector, how exactly "wouldn't this be happening"? Using your rationale, they'd be a monopoly, too.

Third, it's hardly a 'monopoly' when your activities and your pricing is so heavily regulated and legislated.

1. You have two networks to encourage infrastructure competition between each other. Copper is not dead, and the costs of running both networks will be borne for many many years to come. And copper is not like a near capacity motorway - there are further technologies beyond VDSL which will continue to squeeze life out of copper.

2. If Vector was supplying UFB, Telecom/Chorus would be trying to squeeze value out of its copper, and would be supplying VDSL to compete with Fibre. Vector couldn't decide where and when VDSL was available in order to improve fibre uptake.

(It will be interesting to see how Chorus uses VDSL in the areas where it doesn't own the fibre network. Will it care if it cuts into someone else's fibre uptake?)

3. A regulated monopoly is still a monopoly. But if you had copper, fibre and wireless competing there would be less need for regulation.

#1 by Anonymous, not sure if your comment is entirely justified. Chorus will be stuck inbetween a rock and a hard place - on one side they have Crown Fibre Holdings pushing for faster fibre deployment. On the other side they have the Commerce Commission looking to sweat the copper asset as much as possible.

If you cast your memory back eight years ago, broadband was relatively unknown in New Zealand, with most people stuck on 256/128k connections. If you were lucky, you might've been on one of these super-fast 2M/128k connections at your home.

Fast forward eight years from now, and the last residential properties in the UFB initiative will have Chorus vans outside placing fibre into the street. Are these long-wait customers just supposed to put up with the same standard of broadband they've been used to for years while everyone else around them gets spoiled rotten with fibre? What if you are on the final year plan? Would you be happy with buffering and stuttering video-call quality while everyone else enjoys their hi-def experiences with zero buffering? Pretty sure you'll moan in eight years, too.

Chorus have to make the fibre network an attractive option as the likes of Vodafone, Telecom, Orcon, etc, are simply not doing enough at this stage to entice enough of their customers on to this new network. But at the same time, Chorus need to keep copper-broadband development ticking along to improve the experience for those who either aren't scheduled to get UFB for a long time ... or those who don't want to go onto UFB!

It's not a case of what Chorus wants. It's a case of what CommComm wants vs what CFH wants! Two very seperate government bodies with two very different agendas.

Crown Fibre Holdings and the govt will not be happy with this. It will slow uptake of fibre, which will increase political risk for the govt, which already was looking a bit dicey given regulatory issues.

I think you'll find that any delays are fully the responsibility of Chorus, which have been sitting on what the RSPs actually need to deliver and sell the product.

I have had a VDSL connection on order from Snap for over six weeks. Chorus can't deliver it and cannot, or will not, give us a delivery date.
I have emailed Chorus directly and they confirm that it is on a Waiter status with no forecast delivery. Ha, ha. Great service.
Oh yes, and their map shows VDSL available to my address. Eastern Bays, Auckland.
And they control delivery of all comms infrastructure in NZ.
What a joke.

Three to six weeks is a pretty common wait period for the installation of VDSL. Had five weeks' wait with Call+ to get it up and running for my offices, but once completed it was well worth it.

Good luck with your wait.

This is great, as fibre does not even have a date in my area on the North Shore. Which ever is available first I will take and VDSL will do for me until fibre arrives. There you go, it won't slow the uptake of fibre so make it available and I'll take it, for now the copper is there so VDSL beats ADSL.

Amazed at how long this has taken Telecom. Telstra clear has offered this for years.

Only in some areas.

Only in the areas where they inherited cabling from Saturn.

Great to see a widening of focus on VDSL by more ISPs. TrueNet's performance monitoring is showing that VDSL and 30/10 fibre is pretty close in performance, with some small advantages to fibre. For some lucky VDSL customers (close to the DSLAM) it is actually better than Fibre 30/10 by up to 50%.

Take a look at the latest stats on the TrueNet website.

Any unbundling entrant (retailer) can offer VDSL in a Chorus exchange/cabinet - all they have to do is invest in DSLAMs. All this move is doing is signalling that Chorus will provide the investment (and reap the revenues from doing so) rather than the unbundlers (principally Telecom and Vodafone) in the regions where the UFB is not yet deployed. Telecom and Vodafone can sell a rebranded Chorus VDSL over copper or a rebranded Chorus service over fibre. Or, if they like, they can compete by installing their own DSLAMs in Chorus exchanges/cabinets and selling variations of VDSL.
This move by Chorus is great - it is the the only way that a (separated) Chorus can have any real influence on a taste for speed in the retail market in which it is not allowed to participate. The next step would be for Chorus to also start buying and wholesaling access to content to the same retailers for onsale to retail customers to support the taste for speed that it can now deliver - over whatever network (copper or fibre) that the end consumer chooses.

Smaller specialist ISP's such as Actrix & SNAP have offered VDSL for some time. While this has been at a premium, it looks like some residential and small business customers can get faster internet speeds at a competitive price which will at least fuel demand for fast internet as UFB rolls out

Special charges? Sounds reasonable if you want a new service that relies on new hardware and installation that you would have to pay for it. I bought a new phone the other day because I wanted a better one, I paid for it, the media didn't run an article saying Telecom had "wacked a charge on their phone service". I thought this article was highlighting an increased monthly charge, from what I read there is none, it will be a better service at no increased cost.

I'm completely amazed about how people continually expect faster speeds and more data from telcos for the same price or less, and we get more and more reliant upon it for our day to day life. The amazement is with respect to the electricity market - the product is unchanged but the prices keep going up and there is really very little noise about that.
I guess we will just have to wait for the government to sell off their electricity investments for them to then completely regulate the price for those services to the expense of the shareholders.
Hmmm, sounds similar to what happened to Telecom.

Yeah, great launch - I live out in the sticks of Devonport which is exceptionally far away from any form of civilisation so very reasonable that I won't be able to get it.

Ahh... there's no premium on Telecom's plans if you live outside of Auckland, Wellington and Christchurch.

For how many years has telecom been sitting on this technology? Why on earth was it not advertised years ago? Why throw us a bone now? I wouldn't pay the extra in any case as I have no faith in actually getting the advertised speeds.

Chorus always charged a large premium for it, so it was barely worth selling it. Now that chorus have dropped the price to a reasonable level, Telecom has started to sell it. It's that simple.

Telecom don't "sit on the technology" because the product is delivered by Chorus and has already been offered by plenty of ISP's.

As for VDSL2 it's been in a soft launch phase for around 18 months with a number of ISP's offering services and officially left the soft launch phase in June.

Why offer so late? For Telecom [ I'm sorry, Chorus ;-) ] it is a case of protecting existing services. Why don't Telecom offer carrier-quality VOIP at a reduced price - because they still get such high revenue from packaging the service as a 'PABX' style of product. Chorus is just the old post-office man-in-a-van service; no single monopoly ever works efficiently.

Gah, how very annoying! Only days ago I had enquired on behalf of a client with Vodafone if they were going to support VDSL and was told "no" and to wait for fibre. As a result I recommended another (more expensive) solution.