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Hot Topic NBR Focus: GMO
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Vodafone launches UFB plans, Sky TV over UFB fibre

Chorus boss sees late-comer's entry jump-starting UFB uptake.

Chris Keall
Fri, 04 Oct 2013

UPDATE: Vodafone is launching consumer UFB plans in parts of Whangarei, Auckland, Palmerston North, Wellington and Dunedin (all bar Whangarei are covered by Chorus). Christchurch and other areas will follow over the next few months.

The carrier has matched the $75 price-point set by other ISPs for their cheapest plans. Unlike Telecom, a voice-over-fibre service is included (meaning there's no need to hold onto a copper line). Vodafone also offering a naked fibre service - that is, without a voice line (see all the plans here).

Vodafone's key point of difference is that it's offering customers the Vodafone TV Digital Recorder, decoder that can play either Freeview or Sky TV content UFB fibre. The Recorder will be available from November 1, initially for Auckland.

The decoder is a "next generation T-Box" Vodafone consumer director Matt Williams says - a reference to the set-top box used by "tens of thousands" of customers on the HFC network in parts of Wellington and Christchurch that Vodafone inherited with its purchase of TelstraClear last year.

Video is seen by some pundits as a "killer app" for persusading people to make the move to fibre. But a clone of Sky TV's line-up (plus a modest number of pay-per-view movies), may not be compelling enough to make people upgrade.

The Vodafone TV Digital Recorder is software upgradable, and quite versatile. Asked if Vodafone could approach Netflix or a similar independent TV and movie download service, Mr Williams said it was technically possible, but  "We connect New Zealand homes. They [Sky TV] provide the content. Our intention is not to go to Netflix." 

He hinted niche content could be added, and that other services were possible in future - which in NBR's view will help differentiate Vodafone's service. For now, Sky TV is taking the lead on content. The pay TV broadcaster makes it clear who's wearing the pants in this morning's press release, with Sky TV CEO John Fellet's saying, "It’s great to see Vodafone TV using the digital rights we’ve purchased."

TV content will be unmetered (that is, won't count toward your data cap. Multicast technology used by Chorus will mean there is no interference with regular broadband use, Vodafone says. There is one piece of fibre, but electronically it's configured as two virtual pieces. Someone on a 30Mbit/s or 100Mbit/s plan could effectively get more bandwidth if it's required by the TV decoder.

ABOVE: Vodafone's UFB plans (click to zoom). Sky TV Basic through the Vodafone TV Digital Recorder costs $45/month; adding Sky Movies costs $22.05; adding Sky Sport $26.66. Pay-per-view movies cost $6.95 in standard definition; $7.95 in high definition.

The set-top box, which has a 300GB hard drive and the usual recording and live pause options, will cost $14 a month on Vodafone's cheaper plans, and will be free with higher-end plans.

Customers can get Freeview channels free, or pay extra for various Sky TV channels (tied to Sky's rate card but with discounts based on the overall UFB plan you buy from Vodafone).

Vodafone doesn't have an exclusive license to provide Sky TV content over broadband. Telecom and others also have deals with Sky TV to resell its boxes or create a clone of Sky TV's decoder. Vodafone pitches the fact it's the only ISP with a set-top box ready to go.

Vodafone will shortly launch a VDSL fast copper service, which will also likely include the TV service offer, Mr Williams says. The lack of a multicast option will make it more of a technical challenge, Vodafone says.

Vodafone stresses there are no capacity restraints with fibre. That Sky TV channels offered over satellite in HD will be HD on Vodafone's set-top box. But some standard definition channels will be less compressed than they are on Sky TV.

READ ALSO: Vodafone launches business UFB plans

OCT 4: Vodafone is tipped to launch UFB fibre-to-the-home plans this morning.

On Wednesday the carrier launched business UFB plans. The company told NBR a residential launch was "imminent." 

This morning Vodafone consumer director Matt Williams is hosting an event at a private home in Auckland's posh Herne Bay.

Vodafone has been trialng UFB in the immediate area for nearly a year; NBR first had a spin on a Grey Lynn resident's (Chorus-installed) UFB connection back in December last year.

A key point of interest will be whether a voice-over-fibre service will be included with Vodafone's plans (a voice service was conspicuously absent from Telecom's launch, leadiing to complications around the need to retain the old copper line).

Vodafone NZ CEO Russell Stanners has previous said the UFB installation experience was "not ready for primetime." On the technical side it may now be up to snuff. 

But in an interview with NBR last month, Chorus boss Mark Ratcliffe told NBR people who live down a right-of-way or in a mulit-tenant dwelling can face a wait of up to three month as his company seek to get the permission of every owner involved (Chorus - which is rolling out around 70% of the UFB, is pushing ICT and Environment Minister Amy Adams to make the UFB a "designated service," which would allow it automatic access to ROWs and apartments).

Vodafone's entry seen jump-starting market
So far, only around 10,000 of 300,000 within reach of fibre have taken a UFB plan.

Mr Ratcliffe - whose company  is wholesaling UFB access to retail ISPs - told NBR that UFB adoption would accelerate once Vodafone entered the market.

"I suspect we’ll see the competitive dynamic changing a bit when Vodafone’s in the market. When you’ve got the big two retailers going head-to-head, competition drives greater demand," he said.

"When you’ve got two big guys going hard at it, that will see faster uptake."

Telecom holds around 50% ISP market share, and Vodafone (now including Telstraclear) has 29%, according to Commerce Commission figures. CallPlus (including Slingshot) has around 9%, and Orcon 5%.

Chris Keall
Fri, 04 Oct 2013
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Vodafone launches UFB plans, Sky TV over UFB fibre