Southern Cross takes NEXT steps for A/NZ-US cable

The US$300 million Southern Cross NEXT cable has been given the regulatory green light to begin construction, with Telstra also receiving the go ahead in its bid to take a 25 percent stake in the company.

The 13,483km cable, due for completion in January 2022 and connecting Australia, New Zealand, Fiji, Tokelau, Kiribati and the US, is designed to carry 72 terabits per second, providing what Southern Cross says will be the lowest latency pathway from Australia and New Zealand to the US.

The cable adds to the existing 20Tbps of capacity on the current Southern Cross systems.

Alcatel Submarine Networks (ASN) has been contracted to build the cable which is based on an Open Cable architecture, with a Contract in Force now granted.

Laurie Miller, Southern Cross president and CEO, says the new route will provide further resilience and connectivity options between Australia, New Zealand and the United States. It will also provide a key interconnecting infrastructure for the South Pacific, providing FijiA, Tokelau and Kiribati with a direct pipeline, and offering greater options for Vanuatu, Samoa and Tonga.

Telstra joins Spark New Zealand, Singtel and Verizon as shareholders and will be an anchor customer of the NEXT cable. It’s shareholding sees Spark’s shareholding drop from 50 percent to 37.5 percent.

Michael Ebeid, Telstra enterprise group executive, says the cable will benefit customers from enterprise to wholesale and consumer.

“With 80 percent of all the internet traffic to Australia coming from the US, a high speed, low latency direct route to North America is a very important investment for our business and our customers,” Edeid says.

“Southern Cross builds on our existing footprint across Asia Pacific where we carry 30 percent of the region’s active capacity.”

Spark told the NZX it expects to contribute between $70 million and $90 million of equity across FY20-22

A marine survey was completed in 2017, with Sydney BMH and bore landing facilities completed in 2018 along with landing arrangements in Los Angeles and Auckland.

The system was initially expected to go live in the second half of 2021.

In May, the 36Tbps Indigo subsea cable, connecting Sydney and Perth with Jakarta and Singapore was lit up. That cable is a partnership between Google, Telstra, Singtel, AARnet, Indosat and SubPartners.

ComCom: No regulation for NZ mobile – but 5G spectrum auctions need close attention

New Zealand’s Commerce Commission has given a thumbs up for the Kiwi mobile market  – and a thumbs down to any regulatory intervention – saying it’s a competitive market, serving customers well.

The Mobile Market Study final report says New Zealand’s mobile consumers are benefiting from an increasingly competitive market environment with market share among the three national players – Vodafone, Spark and 2degrees – has become more evenly balanced, with 2degrees taking more market share.

The report shows Vodafone and Spark still hold the lion’s share of the market, with 40.5 percent and 37.9 percent of subscribers, with 2degrees, which entered the market in 2009, now holding 20.5 percent of the market.

“We haven’t identified any particular problems or structural issues that could be hampering competition,” says Telecommunications Commissioner Stephen Gale of the report findings.

Unsurprisingly the findings were welcomed by Vodafone, Spark and 2degrees.

The study also shows an emerging market for ‘virtual’ operators selling mobile services without having to build their own mobile network.

The mobile virtual network operator (MVNO) holds just 1.1 percent market share, but has seen growth in recent months with companies including Vocus – which earlier this year slammed the preliminary Mobile Market report – Warehouse Mobile and Kogan entering the market. Trustpower also plans to enter the fray, bundling mobile offers with its existing broadband and energy services.

“Because of these developments, the Commission does not consider there is any need for regulation of wholesale access at this time,” the Commerce Commission says.

But Gale flagged the need for wholesale and retail competition matters to be at the forefront of decisions relating to the upcoming auction of radio spectrum for 5G services in order to ensure continued competition.

“With Spark, Vodafone and 2degrees each having a network of similar technology with similar geographic and population coverage metrics, looking forward we consider the allocation of spectrum to be particularly important for future competition,” Gale says.

The report, instigated back in 2017, comes as Vodafone and Spark jockey for 5G leadership. Vodafone has been testing 5G with plans to have a commercial service up and running in Auckland, Wellington, Christchurch and Queenstown in December.

Meanwhile Spark – which had its original 5G plans shot down by the New Zealand Government Communications Security Bureau over Huawei network security concerns – has launched a limited, invitation only, 5G service in Alexandra. The service uses Nokia technology.

When is unlimited not unlimited?

When it come to the services Kiwis are receiving from their mobile telco providers, the report notes that New Zealand’s 4G performance is ranked eighth out of 88 countries in an OpenSignal report, though the availability of 4G at 57th out of 87 countries.

It notes that mobile plans offering higher volumes of data are increasingly popular. To highlight that, it noted the total number of residential subscribers purchasing voice, SMS and data bundles with allowances of 3G or more was up from 133,000 in 2016 to 497,000 in 2018.

Spark, in its cross submission on the reports preliminary findings paper, noted a shift towards unlimited data plans, including ones that can be shared across several users, as a predominant trend in the retail market.

However, Teligen, which does telco benchmarking, much of which the ComCom report relies on, no longer considers New Zealand’s ‘unlimited’ data plans to qualify as unlimited, because of telco’s throttling the speed once a threshold has been reached.

The average volume of data used by mobile consumers was 2GB per month in 2018 – a figure the report says is growing strongly.

Prices for mobile services in New Zealand have been falling and compare well with other OECD countries, the report notes – though not all fare so well compared with Australia, with mobile prices per GB for the highest data plans offered in New Zealand coming in around NZ$80-$85, versus NZ$56 from Vodafone Australia and NZ$103 for Telstra.

“For the 2G and 5G  baskets, the New Zealand price reported by Teligen is currently at or below the OECD average.”

For larger baskets, however, mobile pricing in New Zealand is relatively high when compared to Australia, but below the OECD average.

One area the report does note a need for change is in the low number of consumers moving telco plans. Sixty-eight percent say they rarely, if ever, compare plans and 54 percent saying they haven’t switched providers in the past five years.

“By shopping around more frequently consumers are likely to trigger more competition between mobile providers,” Gale says.

“We are keen to see more consumer activity and will be looking into ways we can help New Zealanders understand whether they are getting the best deal possible and, if not, consider switching.”

However, in response, Vodafone NZ says its data shows a high number of Vodafone customers change the make-up of their mobile plans each year – if not their provider.

NEW BOSS FOR SPARK NZ FOLLOWING SHOCK RESIGNATION

MAIN STORY

New Zealand’s largest telco, Spark, will have a new boss from July, after the shock resignation today of Simon Moutter, who has served as managing director for seven years.

Spark made the announcement to the New Zealand Stock Exchange today, with current Spark customer director, Jolie Hodson, becoming the company’s chief executive on July 1.

Moutter has also resigned as a director of the company, effective 30 June. Spark shares on the NZX dropped sharply following the unexpected announcement.

Moutter has lead Spark through some major changes in recent times, including a big move to agile working. “In almost every respect, Spark today is a vastly different company to the one that Simon re-joined in 2012,” said Spark chair Justine Smyth.

She noted the company’s ‘rejuvenated’ mobile business, including the launch of the Skinny brand, and its entry into areas such as the Internet of Things, entertainment and sports media.

The telco recently launched Spark Sport and has secured the rights to the Rugby World Cup 2019 and the Women’s Rugby World Cup 2021, along with a slew of other big name events.

Moutter also steered the company through its rebrand from Telecom to Spark in 2014. The resignation comes at a time when Spark is making news again on the back of tensions over Huawei’s role in New Zealand’s 5G rollout.

Spark’s application to use Huawei equipment in its 5G build was declined in November, with the GCSB (Government Communications Security Bureau) citing “significant national security risks.”

Last week, New Zealand Prime Minister Jacinda Ardern while visiting China, was at pains to downplay the Huawei issues, claiming suggestions Huawei had been banned were false.

Smyth said Moutter took on the role in 2012 with the expectation that it would most likely be a five-to-seven-year tenure.

His successor has been with Spark since 2013, when she joined as CFO. She later moved into the role of CEO for Spark Digital and customer director.

“We are delighted to have confirmed a top-quality internal candidate, which speaks to Spark’s desire, where appropriate, to develop and promote talent from within,” Smyth added. “Jolie is an accomplished leader with a strong record of delivering results and managing complex business units and to be able to appoint an executive of Jolie’s calibre and experience is a testament to the quality of the talent within the company.”

“She has had experience across most major parts of Spark’s business since she joined the company in 2013,” Smyth said.

Moutter said he hasn’t made any decisions about what he will do once he leaves Spark, other than spending the first couple of months with his family.

“I feel it’s the right time to pass the leadership baton on and I am delighted the Board has chosen an outstanding leader in Jolie to succeed me,” he added.

Kiwi wrap: Spark DX hits profits, but Vocus revenue climbs; ComCom action for Vodafone NZ

By Heather Wright, Assistant Editor

 Agile costs Spark

Spark New Zealand’s profits have taken a hit, despite a reduction in labour costs, as the telco transitions to Agile as part of its digitisation programme.

The company has reported a net profit of $385 million, down 7.9% on last year’s $418 million. Revenue was up $35 million, or 1.0%, to $3,65 billion, with mobile revenue up 6.9% and cloud, security and service management revenue up 15.1%. Legacy voice, managed data and networks revenues were all down to the tune of $100 million, offsetting those gains.

In May Spark announced it was accelerating its Quantum business improvement programme. that action accounted for $49 million in costs, for the FY18 year, including $24 million which were brought forward.

Spark chair Justine Smyth says the decision to accelerate the Quantum programme was based on increasing confidence the telco could improve customer experience and operate under a lower cost structure in an Agile model.

Labour costs were down $82 million to $581 million on the back of the programme, which saw 1900 staff told to sign up to the new Agile work practice or be made redundant, in June.

Vodafone NZ joins Spark in court

Vodafone New Zealand has been charged with making false representations in customer invoices.

The 10 charges, laid by the New Zealand Commerce Commission, cover the five years from January 2012 to January 2017, when the Commission alleges Vodafone sent invoices billing customers after their contract had finished.

The Commission says Vodafone sent the invoices, for full month billing periods, after agreeing with customers to terminate their service pay way through the month.

The matter will have its first hearing in the Auckland District Court next month.

Last month Spark was also in the commission’s firing line, with 11 charges laid alleging false or misleading representations relating to its billing and a $100 offer for new customers.

Those charges arose from three separate alleged failings, including overcharging for broadband data when a fault in the broadband network misrecorded customer data usage; and an offer of $100 credit for new customers to a broadband plan which was sent to prospective customers but failed to mention the offer could only be redeemed by phoning Spark, not joining online. The Commission alleges the letters created the impression customers could sign up online.

The third alleged failing mirrors the action against Vodafone, with customer’s final bills including charges for entire month billing periods after customers had left Spark.

Vocus results vindicate abandoning NZ sale 

Vocus has reported growth across its entire Kiwi operations, with revenue up 4% and to account for N$363.5 million, or AU$335 million, of Vocus’ overall AU$1.9 billion group revenue for FY18.

The results, which Vocus says were negatively impacted by foreign exchange rates to the tune of AU$8.2 million, come just months after Vocus decided not to sell it’s Kiwi business after failing to receive an ‘appropriate’ offer.

The enterprise and wholesale business, was up 5% to AU$162.1 million, with consumers up 2% to AU$172.9 million. Underlying EBITDA was up 8% to $56.6 million.

Broadband consumer numbers were up 3%, with a 60% increase in ultrafast broadband customers offsetting a 15% decline in copper broadband numbers.

SMB customer numbers were up 5%, while mobile customer numbers increased 14% and the company’s move into energy retailing increased with a 240% increase in energy customers, something the company attributes to improved bundling in the consumer segment and additional sales investment in the SMB segment.

Vocus says it plans to double revenue from its core enterprise, government and wholesale markets in New Zealand within five years, leveraging its fibre and network assets.

Kiwi wrap: Spark ups sport foray, power co wins telco awards

17 August

In a week that highlights the changing telco market in New Zealand, we’ve seen Spark marking plans for a standalone sports media business, Trustpower continuing to win big in the telco market, and new 4K and UFB developments.

Spark ups sports play

New Zealand’s largest telco, Spark, will partner with an as yet unnamed specialist sports-streaming platform as it looks to create a standalone sports media business.

The company this week secured exclusive rights to three seasons of Premier League, from next August, and Manchester United TV. The deals follow the April’s announcement that Spark had won the rights to the Rugby World Cup 2019 and Women’s Rugby World Cup 2021 and other premium rugby tournaments.

Spark says the platform used for the delivery of the streamed sports content won’t be the platform used for its current streaming service, Lightbox and will instead be from “a specialist platform provider , with extensive experience streaming live sports events.”

Spark managing director Simon Moutter, said the deals were “not about using sports content simply as an acquisition or retention tool for our broadband or mobile base,” tipping them as a potential future source of revenue and profit growth for the company.

Jeff Latch has been appointed as head of Spark Sport. Meanwhile Kiwis are watching anxiously, hoping their World Cup and football viewing won’t be marred by the issues seen in Australia in June when Optus’ struggled to deliver Fifa World Cup streaming services.

Changing face of NZ telco market as Trustpower reinforces market hold

Trustpower, an energy company which branched out into telecommunications, has locked established players out of the winners circle in the annual Roy Morgan New Zealand Customer Satisfaction Awards,  snapping up Home Phone Provider of the Year and Home Broadband Service Provider of the Year.

The company has won home phone provider for the past four years and said it had noted 12.5% growth in internet connections last year.

Craig Neustroski, Trustpower general manager markets, said the company was ramping up its use of predictive AI and machine learning to help customer satisfaction. “We started 2017 with nine automated processes and we will have reached 20 by the end of this year,” he says. “We now have over 400 topics that can be accessed through out chatbot, webchat or the Trustpower app, with our New Zealand-based phone agents taking calls from those who prefer to speak directly to a person.”

Skinny Mobile, Spark’s low-cost, online-only brand, was a first time winner in the award this year, taking out Mobile Phone Service Provider of the Year.

Apple, meanwhile, was rated the Mobile Handset Provider of the Year, with the iPhone also making it into the ‘Best of the Best’ with 95.0% satisfaction, behind Emirates on 96.2% and Holden on 95.9%.

Kordia completes first live 4K broadcast

Kordia has completed what it says is New Zealand’s first 4K ultra high definition broadcast in a move the state-owned commercial enterprise says shows 4K is a viable option for broadcasters.

“We’ve proven we can do it right here, right now using existing digital terrestrial technology which we believe is the most reliable option when delivering 4K content,” Dean Brain, Kordia head of media, said.

Huntly gets fibred-up

Fibre is beginning to roll out in Huntly as part of the UFB Extension project – the next phase of the New Zealand Government’s Ultrafast Broadband programme which sees an additional 190 towns receiving access to fibre-to-the-premise tech.

The Huntly build, which is carried out by UltraFast Fibre, will offer UFB connections to up to 3,000 homes and businesses.

William Hamilton, Ultrafast Fibre CEO, said the Huntly installation provided “a real opportunity to help reduce the digital divide.”

“We are aware that some parts of this community could benefit from some help in accessing high-speed broadband, and it is something UFF is prepared to push for,” he added.

On completion of the UFB Extension project in 2022, 87% of Kiwis will have access to FTTP.

The Kiwi wrap: UFB complaints, Fortinet deal for schools and Vodafone’s new fibre bridge

UFB complaints increase

Complaints about ultrafast broadband installations are on the rise in New Zealand, according to the latest report from the Telecommunications Dispute Resolutions.

The TDR, an industry body comprising a set of some 95% of the nation’s telco providers by revenue, which handles complaints for the sector, recorded 666 complaints and enquiries in the January to March quarter. Billing issues remained the largest source of complaints at 39% or 265 complaints/enquiries, with disputed charges the greatest proportion of billing complains.

Fibre installations, meanwhile, prompted 48 complaints/enquiries, or 7.2% of overall issues raised, behind customer service, faults and contracts – with TDR noting that while UFB installation complaints are on the rise, they “remain in proportion to the rise of installations across New Zealand.”

Vocus and Trustpower have continued to top the complaints list for New Zealand telcos for the Jan-Mar 2018 quarter, with 2.7 and 2.5 complaints per 10, 000 connections, respectively.  Both firms recorded a slight increase in complaints for the quarter.

Spark recorded just 0.5 complaints and enquiries per 10,000 connections, with 2degrees logging 0.7, and Vodafone 1.0 per 10,000.

Fortinet network security for Kiwi schools

New Zealand’s schools are to receive “more robust protection against online threats” with a new upgrade to the Network for Learning managed network, as usage across the network has soared to hit more than 12 petabytes in the first two terms.

The upgrade will see schools transitioning to a combined enterprise-grade firewall and internet filtering service from Fortinet. Improved internet filtering tools, modifiable to suit individual classes and students, and smart reporting will also be part of the upgrade, along with offerings to enable schools to manage attempts to bypass their internet filtering with virtual private networks.

Network for Learning (N4L) is a crown company whose network connects more than 2,400 schools across New Zealand.

The network has seen data usage almost double year-on-year. N4L said more than 374 million websites and 118.000 virus and malware threats have been blocked across the managed network in the first two terms this year.

Hawera High School in Taranaki is one school recently affected by ransomware, with student work and teaching resources among the files encrypted – with a demand of US$5,000 in bitcoin made for the return of the data. The school had opted out of N4L’s current security offering…

Vodafone serves up fixed wireless as fibre bridge

Vodafone New Zealand is offering a fixed wireless broadband service, targeting those customers waiting for fibre to be installed.

The Ultimate Home Fibre plan will provide customers with a mobile broadband connection via Vodafone’s 4G/3G network while they wait for a fibre connection.

The telco said its new service will make it easier for people to switch to fibre. “Our customers tell us they are frustrated by installation wait times, while others say they are putting off a move to fibre because they simply don’t want to be disconnected while they wait,” added Vodafone consumer director Matt Williams.

Vodafone claims ‘tens of thousands’ of customers across all providers are waiting for fibre, which is installed by Chorus and other local fibre companies.

Kiwi roundup: 5G, rural broadband acceleration and cybersecurity expansion

Cisco becomes first collaborator in Spark 5G innovation hub

Spark has announced that Cisco is the first of several collaborators it will be working with to prepare and test the parameters for a Kiwi 5G network as it aims to help Kiwi businesses “win big in a digital world.”

Cisco signed an agreement earlier this month to contribute services, technology and capability to the hub which will develop, test and prepare for 5G deployment.

The hub will see vendors, developers and application provides working together on innovations. Spark chief operating officer Mark Beder says 5G will create endless opportunities for innovation of products and services in New Zealand, transforming the way we live, work and play through significantly faster speeds and considerably more capacity.

“The purpose of the 5G innovation hub is to start planning and testing use cases that’ll help New Zealand business win big in a digital world,” Beder said.

Cisco ANZ sales and operations director for service providers Andrew Findlay said the hub will allow Kiwi companies to work with Cisco’s programmable networking technology within a 5G sandbox.

Spark has already trialled 5G in Wellington and Auckland, achieving speeds of 18.23 Gigabits a second.

Rural broadband rollout jumps ahead

Work on phase two of the Rural Broadband Initiative and Mobile Black Spot Fund builds will be “substantially” finished by the end of 2021 – a year ahead of schedule according to Communications Minister Clare Curran.

Rural communities not covered by the RBI2 and its expansion project will be able to apply for funding from the NZ$1 billion Provincial Growth Fund.

“There is enormous untapped potential in our provinces – we have businesses with ideas and ambitions but they need infrastructure like high-speed broadband to compete equally in our 21st century economy,” Curran said. “We want to let them know we are supporting them, and to let them know what’s coming down the line.”

Curran said the Labour led government intends to grow ICT to be the second largest contributor to GDP by 2025.

Malware-Free Networks expands

The GCSB, New Zealand’s public service agency charged with promoting national security, is expanding its Malware-Free Networks cyber defence initiative to provide protection to more Kiwi organisations.

Andrew Little, the minister responsible for the Government Communications Security Bureau said expanding the service will “significantly” increase the range of organisations receiving the cyber defence services Government offers New Zealand’s organisations of national significance through the GCSB.

Organisations of national significance include Government departments, key economic generators, niche exporters, research institutions and critical national infrastructure.

The expansion follows a pilot with Vodafone and some of the telco’s customers.

Little said the pilot showed Malware-Free Networks has “the potential to disrupt a significant volume of malicious cyber activity.”

The GCSB is developing a plan to work with telco network operators to deliver the expanded service, which is expected to take a couple of months. The GCSB already provides its Cortex cyber defence offering to nationally significant organisations.

SamKnows to monitor Kiwi broadband

The Commerce Commission has awarded a nationwide programme to monitor New Zealand’s broadband performance to a UK-based company, SamKnows.

The testing previously been managed by Kiwi company TrueNet, which announced earlier this year that it was closing after learning it had lost the contract.

Telecommunications Commissioner Dr Stephen Gale said the programme is costing NZ$2.8 million over three years, under SamKnows.

“SamKnows was a standout applicant. It is considered to be a world leader in internet service performance, currently assessing broadband performance for about half of the world’s internet population,” Dr Gale said.