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Telecom: Superfast UFB plans on g-g-g-g-g-g-g-gigahold

UPDATE / Aug 4: Ultrafast Fibre (UFF) may now be offering 1Gibt/s UFB fibre in some parts of the country, or more than 10 times the speed of fastest plans when the Ultrafast Fibre rollout began.

But Telecom [NZX: TEL], which holds 50% of the retail ISP market, is not interested — at least not until there is a nationally consistent service from the four UFB companies.

Telecom today welcomed UFF's move to introduce a 1Gibit/s wholesale plan, which costs retail ISPs $65 a month (UFF, majority owned by lines company Wel Networks, is responsible for the rollout in Hamilton, Tauranga, Te Awamutu, Cambridge, Tokoroa, New Plymouth, Wanganui and Hawera).

Telecom says it wants to introduce 1Gbit/s plans, and for the UFB companies to accelerate their rollout of the service (so far only offered by UFF).

But Telecom is unlikely to introduce a 1Gbit/s plan for its retail customers until the four UFB companies (Chorus [NZX: CNU], UFF, NorthPower and Enable) can agree on a common 1Gbit/s inputs, spokesman Conor Roberts tells NBR.

Telecom fears a "fibre tangle" if there is not national consistency between the plans offered by the four wholesalers.

Currently, each is offering a range of different inputs (or different combinations of upload and download speeds at different pricing). That leads to technical complications, Mr Roberts says.

Telecom sees a 1Gbit/s top-speed plan as a natural complement to the unlimited data plan recently introduced under its "Giganaire" promotion. But to try to introduce it now would be a headache, the company maintains.

More, although the configuration of the UFB allows for speeds of up to 1Gbit/s, UFF is the only UFB company that's put a top-speed residential plan on the table.

"Chorus has signalled it will offer a 1Gbit/s service at the entry-level price to the winner of the Gigatown promotion," Mr Roberts notes.

"We would like to offer a nationally consistent 1Gbit/s service and would prefer to wait until there are nationally consistent inputs before doing so because of the technical difficulties of providing for a range of different inputs and problems with marketing different inputs to customers depending on where they are in New Zealand.

NBR has asked Crown Fibre Holdings, ICT Minister Amy Adams and Chorus for comment.

ckeall@nbr.co.nz


Ultrafast Fibre one-ups Chorus with 1Gbit/s UFB fibre plans

June 11: On May 14, Chorus [NZX: CNU] said it would double the speed of its fastest residential UFB fibre plans to 200Mbit/s from July, wholesaling the new service to ISPs for $55.

Today, Ultrafast Fibre (UFF) said it will introduce a 1Gbit/s (1000Mbit/s) residential fibre plan from July, wholesaled for $65.

1Gbit/s is the speed the winning town in Chorus' endless "Gigatown" competition will receive (the first phase of the Gigatown social media hashtag competition winds up in September).

UFF will also introduce a 100Mbit/sdownload speed and 20Mbit/s upload speed plan for $45 per month (Chorus' equivalent plan costs $40) and 200Mbit/s down/20Mbit/s down plan for $55 (matching Chorus 200Mbit/s pricing).

There are two really positive trends here. Fibre plans are getting faster, making the new technology more attractive against copper. And more and more plans are being offered by retail ISPs uncapped, with plans instead being differentiated by speed.

Chorus has said it will increase the monthly price of its new entry level fibre plan by $1 a year from next year to 2019. 

UFF has pledged to hold its 1Gbit/s and other new plan pricing at the same level until 2020 (for Chorus and UFF and other local fibre companies, retail ISPs set the final price). 

Chorus is responsible for around 70% of the UFB rollout by premise. 

The remainder of the public-private project is held by Enable (Christchurch), NorthPower (Whangarei) and UFF, owned by Crown Fibre Holdings and lines company Wel Networks (Hamilton, Tauranga, Te Awamutu, Cambridge, Tokoroa, New Plymouth, Wanganui and Hawera).

UFF CEO Maxine Elliott says the new 1Gibt/s plan will be available in all eight areas the company is constructing its UFB network.

UFF is not willing to talk about costs per premise passed. But numbers in its annual report imply the figure is around the $1200 mark — well below Chorus' latest estimate of $2900 to $3200.

(UFF is owned by lines company Wel Networks and, like Northpower Fibre in Whangarei, enjoys the advanage of exiting overhead lines infrastructure and consents — which begs the question of how the world would be different if Vector had won the Auckland and Wellington legs of the UFB, which ultimately became part of Chorus' haul).

"We can confirm that the rollout is on track in fact slightly ahead of program." Wel Networks GM of operations and fibre William Hamilton tells NBR.

The number of premises past is 97,000 past our plan, ahead of the plan for 81,000 at this time. Around 6% of customers within reach have chosen to connect so far.

"Our budget is also on track," Mr Hamilton says.

Enable and Northpower say they have faster than 100Mbit/s plans on the way, but have yet to give any timing.

ckeall@nbr.co.nz

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Comments and questions
20

I love competition, it brings innovation to the market, pity UFF are not in Auckland, I know who I will be giving my business to!!!

There is no competition - each is a regional monopoly.

The fact that another region is offerering a better product surely has to make chorus move aswell

Why?

The only way a customer can take up that better product is to move cities.

So true Harvey. The response I have had from Enable in Chch for the last few years has been:- "you are definitely within our coverage area to receive fibre broadband ..., however unfortunately there is no announcement as to when your area may receive it at this stage".

So disheartening when they admit you are stuck with them, and yet they don't even have a plan to cover some parts of their monopoly area.

Thanks National - brilliant implementation.

Saying Telecom have put superfast UFB plans hold and that we are “not interested” in providing 1Gbps speeds are an incorrect interpretation of what we have called for.

Telecom wants to roll out gigabit per second download speeds to the whole country – and have called on LFCs to provide them – because we want to speed up (not slow down) roll out of those products around New Zealand.

We're now offering Ultra Fibre products in every area where fibre has been laid - however there are a huge range of input speeds and prices depending where you are in the country and what LFC you're dealing with. It'd be better and easier if we could offer nationwide products because we could access consistent inputs.

Conor Roberts
Telecom Head of Public Affairs.

Hi Conor,

I think the article above faithfully represents why Ultrafast Fibre is offering a 1Gbit/s wholesale plan right now, but Telecom is choosing not to pick it up at this time.

Telecom's reasoning seems solid.

Good luck to all retail ISPs in their efforts to prod along faster plans, and consistent national standards - though I can also imagine that some end customers will also be baffled as to why, three years into the UFB, basic elements of the rollout seem disorganised and uncoordinated, with no agreement among the various UFB stakeholders.

CK

What do you mean competition? This isn't competition, each local fibre company has their own area. This just annoys ISP's who want to put out nationwide propositions with the same price input.

..then you should move down to Hamilton ":)

Hamilton is a good place to live and be on fibre. Too bad that Telecom and Vodafone haven't yet launched their UFF plans here, which means we have to go to smaller retailers without the full offering of the big guys (that would otherwise translate into even more savings).

Which ISP is actually going to offer 1gb services tho, Release doesn't say any RSP has signed up

I live close to Newmarket and can only access ADSL (10mbit!) and fibre isn't expected until mid 2016! VDSL also isn't offered. In simple terms if a lines company could get in on the action we could get better speeds a lot earlier?

Trouble is, no competitors will offer services in competition to Chorus and the other UFB partners as they have to use 'real money' to build the network, not government subsidies. So they can't recover their costs at the (subsidised) prices of the UFB guys

Re the different (apparent) costs for Chorus and lines co connections. There are two different funding models. Whilst Chorus owns the infrastructure it builds, and its books will show all costs related to the build regardless of the connections actually sold, The other UFB partners do not. Rather, the (initially) govt-owned PPP co pays for the base network to be built (i.e. the lines past the houses). The UFB partner pays for the pays for the drop from the house to the street for each customer that buys a connection, plus a share in the PPP company (average cost of infrastructure, not heavily 'front-loaded as Chorus costs are). Over time, ownership of the PPP gradually transfers from the govt to the UFB partner, as uptake ramps up.

So you need to be careful which accounts you are looking at - you may be getting only half the story if you are looking at just the UFB partner, or just the PPP.

Bring it on I say. Its about time the flagship policy objective coughed up a decent outcome. I think some of the retailers will cotton onto the marketing opportunity here real quick and open up this new highway saying to consumers - go...go as fast as you can

re build costs. i understand that UFF string fibre between poles. Costs for connection will be much, much higher when they commence fibre in subdivisions with no aboveground services.

Yes, like NorthPower Fibre (owned by NorthPower), UFF is owned by a lines company, so it's a lot easier for it to take the much cheaper, faster overhead option in many instances.

Chorus has previously told NBR it has no set overhead vs underground target in its UFB contract, but not controlling any power poles, it faces a lot more regulatory hassle.

Gigatown competition now to be modified to "win the Southern Hemispheres equal-fastest wholesale port speed for RSPs operating in your town!" ?

Right so this is BS, lets look at the numbers from my point of view
1G Access to client = $65 per month
10G Handover = say $200 per month
10G port to handle handover = anywhere from $200 to $20K for the port in your router.
at least 1G backhaul from Hamilton to Auckland for example about $5K per month
then we add local peering costs + international transit costs + staff + colo + insurance + + + + +
and the guy in hamilton wants to pay around $100 per month and do a speed test and get a Gig and to cap it off wants unlimited data, then complains when he can't get the speed. all the while the ISP is supposed to make some money to survive and pay tax.

International bandwidth costs $30/mbps/mo in New Zealand, do you really think an unlimited 20mbps ADSL connection has 20mbps of bandwidth dedicated to it? For only $90/mo (including line fees).

ISPs oversell, that's how they work.

I doubt they'll see massive difference in bandwidth usage moving from 100mbps to 1000mbps providing there's no major difference between them.