Telecom promises to double broadband speed from October - but only for some, and it'll cost

Telecom Wholesale’s expansion of its Very High-Speed Digital Subscriber Line 2 (VDSL2) will help New Zealanders receive fast broadband until the government’s fibre initiative is released in around 10 years time, says market researcher IDC.

Telecom announced today from October 1, Internet Service Providers (ISPs) serving exchange areas including Christchurch, Fendalton, Nelson, Wellington Central and Palmerston North will be able to offer the broadband service.

VDSL2 promises download speeds of up to 40Mbit/s or double what can be squeezed from a copper line using the most advanced species of DSL today, ADSL2+.

There are two catches: one, you have to live within around 1km of your nearest exchange, or roadside cabinet, take full advantage of VDSL2+. Further out, its bandwidth fades rapidly (unlike a cable connection, which thrumbs at up to 100Mbit/s - in both directions - regardless of distances).

Two, Telecom Wholesale is looking to charge ISPs $20 per customer per month for a VDSL feed - but the likes of Orcon and Vodafone say DSL is DSL under the Telecommunications Act, and the national carrier can't charge extra.

In a ruling earlier this year, the Commerce Commission said that "premium services" could be introduced to justify the relatively high prices it mandated for competitors to access one of Telecom's roadside fibre cabinets. However, it stopped short of naming the obvious service, VDSL2+. Now, the watch-dog will likely have to referee whether Telecom Wholesale can charge $20 extra for faster copper connections.

A separate issue: will consumers be willing to pay the extra money.

IDC Telecommunications Research Manager Rosalie Nelson said Vodafone and Orcon’s complaint to the Commerce Commission on pricing and how Telecom plans to deliver VDSL2 was predictable with such as initiative.

Ms Nelson said the speed at which a customer receives VDSL2 would be determined by how close a home is to a broadband cabinet, as the broadband connection would slow down the further away it is from the exchange due to copper wiring.

But it is the most advanced super-fast broadband available over copper. Telecom Wholesale said some customers have seen broadband speeds up to 40Mbps downstream and 16Mbps upstream to their homes.

Telecom Wholesale CEO Matt Crockett said: “The first phase of the rollout was a pilot to a number of Auckland metropolitan areas. This next phase makes the service available to more exchange areas across New Zealand to further test and refine the service ahead of a full launch when we’re confident the service meets our high reliability and robustness standards.”

Mr Crockett added: “Having VDSL2 available means our customers’ high-end broadband users are able to have access to some of the fastest speeds in the world. For several months now, we’re been future-proofing out network will all new line cards deployed into exchanges and cabinets being VDSL2 capable; already there are nearly 40,000 ports available.”

Temple director Paul Winton said Vodafone was working with Telecom Wholesale on VDSL2 and was planning on unbundling with the service.

Ms Nelson said despite the general option New Zealand was lagging behind in super-fast broadband infrastructure, steps taken in the last few years had brought us closer to other Western countries.

New Zealand has a long way to go before it reaches service levels as seen in Japan, but this is mainly because Japan is so densely populated and laying fibre to the home is a lot easier than in New Zealand, Ms Nelson said.


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3 Comments & Questions

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Shame Telecom can't help the rest of us still on the old ADSL technology, they speed up those with fast speed's already. Only gotta wait a few more years for a cabinet...

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If TelstraClear can charge a premium for higher speeds on VDSL then why cant Telecom? It cant be the higher cost of retailing, and its not the higher cost of access and providing the wholesale service so why is TelstraClear charging like a wounded bull?

Anyone checked what the pricing is on Vodafones VDSL product ? It was announced a while ago but pricing information has been distinctly lacking. This was for their kit in their unbundled exchanges......

Maybe the price is based on the utility of the product? A higher speed is more valuable to some users (higher marginal utility). But it seems that the prospect of utility is always lost on the pointy heads at the Commerce Commission.

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Why is Telecom and the New Zealand taxpayer paying for outdated technology? The country will continue to be 50 years behind the rest of the world if we try to put in cable now and then upgrade later to wireless.

Google has installed a WiFi network and continues to develop wirelesss technology. It is not suitable for the country, but wireless of some sort is a better option. It is less expensive to install, less expensive to maintain and easier to upgrade. A clearly better choice.

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