Verizon strikes NBN Enterprise Ethernet reseller deal

The local arm of US telco giant Verizon has signed a reseller deal with NBN Co to supply the National Broadband Network (NBN) builder’s Enterprise Ethernet offering to its local customer base. 

The move gives Verizon Australia’s local customers, the bulk of which are government entities and private sector enterprises, the ability to combine NBN Co’s business-oriented broadband product with Verizon’s own services, such as Software Defined Networking (SDN) and Virtual Network Services (VNS).

“This agreement provides choice and competition that hasn’t existed on this scale before. Businesses, particularly those outside of the major cities, deserve access to the globally recognised, best in class services and capabilities that Verizon offers,” Robert Le Busque, Verizon’s regional managing director in Australia, said. 

“A robust network is the backbone of any business, and particularly today, where digital business is the norm, and organisations are increasingly looking for scalable, flexible network capacity to support global growth. 

“Verizon is pleased to be able to present a compelling alternative to Australian enterprise and government businesses,” he added. 

For Verizon, the deal marks a new milestone in its 20-plus year history in Australia, which has seen the company named among the panellists on the australian Federal Government’s Whole-of-Government Telecommunications Services Panel. 

The move sees Verizon join a handful of existing NBN resellers, including Telstra, Vocus and TPG, already offering the Enterprise Ethernet product, which is aimed squarely at the high-margin business market. 

NBN Co launched the wholesale enterprise product, which offers symmetrical speeds of up to 1Gbps and premium customer service, in October last year. At the time, the network builder said that its Enterprise Ethernet connections are designed to be built on request and feature a point-to-point fibre connection.

“This wholesale product has been developed with the specific needs of global enterprise and government organisations in mind. It is capable of delivering the service required by businesses that use data-intensive applications such enterprise network systems and cloud-based solutions,” NBN Co chief customer officer for business Paul Tyler said at the time. 

At launch, the product was touted as being packaged with a premium service-level agreement between NBN Co and retail service providers (RSPs) to provide faster resolution of faults as well as to encourage RSPs to offer an increased service experience for mission-critical applications. 

Vocus chief spruiks turnaround effort as AGL withdraws A$3b deal

Vocus Group CEO Kevin Russell has reminded shareholders that the company is in the midst of a three-year turnaround effort after the latest in a series of potential buyers walked away from the takeover table.

AGL Energy announced on 17 June it had decided to cease due diligence on Vocus Group and withdraw the non-binding proposal to acquire the telco it had announced just days before.

According to AGL managing director and CEO Brett Redman, the energy company was “no longer confident that an acquisition of Vocus at the proposed terms would represent sufficient certainty of creating value for AGL shareholders.”

At the same time, Redman maintained that AGL believes there will be material opportunities for the company as energy and data value streams continue to converge and the traditional energy sector accelerates its transformation.

“The approach to Vocus reflected our view that the Vocus asset base has attributes that could support the execution of this strategy and benefit our customers,” Redman said.

AGL pitched its multibillion-dollar proposal to shareholders on 11 June, saying at the time that it had been granted exclusive access to conduct due diligence on the telco for a period of four weeks.

The takeover proposal, worth just over A$3 billion, came almost exactly a week after another potential suitor, Scandanavian private equity group EQT Infrastructure, pulled out of its own non-binding takeover play for Vocus, scrapping a deal that would have been worth nearly A$3.27 billion.

At the time, Russell reiterated earlier comments that Vocus was in the early stages of a business turnaround and maintained that the company had “great confidence” that its strategy would deliver significant value in the medium to long-term.

Now, following the withdrawal of AGL from the negotiating table, Russell has once again pointed to the company’s turnaround activities.

“As we have repeatedly said, this is a three-year turnaround,” he said, noting that with the AGL deal off the table, the Vocus management team will now be able to focus all of its attention on “realising the opportunity that we have ahead of us.”

KIWI FIBRE UNBUNDLING SPARKS ISP ANGST; FIBRE UP

New Zealand businesses are embracing fibre rapidly according to new figures, but there are storm clouds gathering on the horizon, with several ISPs already snarling over proposed pricing for new unbundled fibre services.

Last week Chorus released its proposed unbundled fibre pricing with Vocus and Vodafone – which have already showcased an unbundled offering – immediately hitting back with claims the pricing is too high and will result in a NZ$40/month price increase for fibre users.

InternetNZ quickly jumped into the fray, calling on the ISPs and Chorus to reach an agreement – quickly.

Unbundling will enable retail ISPs to gain direct access to fibre broadband cables so they can install their own technology and manage the full service to their customer, rather than having Chorus or other local fibre companies manage the broadband package details such as speed.

From next year, fibre companies – of which Chorus is the largest in New Zealand – will be required to provide unbundled services.

Chorus’ proposed pricing would see a monthly access charge of NZ$28.70 per month to cover access to the fibre between the premise and the splitter. Retail service providers would also have to pay NZ$200 per month to access the feeder fibre from each splitter – which can have up to 16 customers connected – to a central office where RSPs can pick up the unbundled service.

The network provider has warned the industry not to expect the same level of savings seen from unbundling the copper network.

Ed Hyde, Chorus chief customer officer, said: “While I’m sure some RSPs will argue for even lower input costs, the economic and technical reality of unbundling a newly-built, world-class fibre network is much more challenging than unbundling much older, often fully depreciated, copper network assets that have a fundamentally different architecture.”

“However, we are confident that an RSP that is committed to providing unbundled fibre services will be able to do so at this price point,” he added. “The pricing released for feedback today is the latest step in a near year long process of industry engagement, that has sought extensive feedback on the product and processes that will enable unbundled fibre.”

Back in the mid 2000s New Zealand went through copper unbundling – an extended process that proved to be one of the more contentious periods in New Zealand’s telecommunications history.

Jordan Carter, InternetNZ chief executive, said it would be a shame if an agreement could not be reached.

“Price is a major factor of why some New Zealanders don’t have access to the Internet. Any changes that could potentially increase Internet prices would be a terrible thing and would only expand digital divides,” Carter said. “It’s important that ISPs and Chorus work together to find a mutually agreed solution to unbundling fibre, otherwise the Commerce Commission will need to be involved to find a fair price.”

“It would be a shame if New Zealand’s Internet users had to wait for the Commission to sort this out,” he said.

Fibre growth

The flak comes as newly released Stats New Zealand figures show more than half of Kiwi businesses with six or more staff used fibre-optic broadband connections last year.

Geraldine Duoba, Stats NZ business performance manager, said: “Fibre usage has more than doubled to 52 percent, compared with four years ago. Access to faster broadband is seen as an important factor in enabling increased productivity and promoting economic growth.”

A further eight percent expect to be using fibre within a year.

The financial and insurance services industry had the highest proportion of businesses using fibre, at 82 percent, followed by the professional, scientific and technical services industry – which includes scientific research, legal and accounting, advertising and computer systems design services – at 78 percent.

Across New Zealand there were 714,258 users connected to UFB at the end of December – a 6.8 percent increase on the previous quarter.

New Zealand’s UFB build, which aims to provide UFB access to 87 percent of Kiwis across 390 towns and cities by the end of 2022, was 77 percent complete at the end of December.

The number of small businesses with no plans to use fibre has also dropped, however, 28 percent of businesses with fewer than 20 employees still say they have no plans to use fibre. That’s down from 41 percent in 2016.

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.

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.

VOCUS GROUP NAMES TELCO VETERAN KEVIN RUSSELL AAS ITS NEW CEO

Vocus Group has hired telco industry veteran Kevin Russell as its new managing director and CEO, following the departure of former chief exec Geoff Horth three months ago.

kk Russell, who comes on board with an A$1.1 million pay packet, most recently served as Group executive for Telstra and before that as the consumer country chief officer and CEO at Optus.

According to Vocus chairman Bob Mansfield, Russell will be responsible for “leading Vocus through its next stage; building a high-performance team that is focused on developing and executing a strategy to deliver the potential value within the company.”

With Russell coming on Board, Vocus interim group CEO Michael Simmons will return to his position as the company’s chief executive of enterprise and wholesale.

Vocus also said that as part of Russell joining its ranks on  28 May, he will also be appointed to the board.

Mark Callander, CEO of Vocus New Zealand, will also join the Vocus Board on 28 May as an executive director.

THE KIWI ROUNDUP: THE WEEK’S TELCO HAPPENINGS IN NZ

Soaring broadband consumption, a Vodafone sale, Spark’s Cisco deal and Vocus shuts down an automated phone scam… We take a look at some of this week’s key news in the New Zealand market.

Vocus shuts down automated phone scam

A phone scam, where callers received an automated message claiming to be from police and threatening the recipient with arrest if they don’t pay money to Inland Revenue was shut down by Vocus Group, according to New Zealand Police.

More than 2,400 calls were made to New Zealand phones before Vocus detected the campaign and was able to stop it, police said. Police received numerous complaints about the scam.

Vocus Group CTO Adrian Dick said the telecommunications company uses sophisticated scam monitoring tools, and was able to block the number being used for the scam calls and then alert other telcos and the Police High Tech Crime Group.

Detective Sergeant Damain Rapira-Davies warned that people need to look after their personal details in the same way they would a wallet or personal possessions.

Kiwi broadband demand sees usage double in two years – 680GB/month forecast for 2020

Broadband use in New Zealand has soared from an average of 101GB per household in April 2016 to a whopping 204GB in April 2018, according to new figures from Chorus.

Chorus is forecasting average monthly data per household of 680GB come 2020.

Kurt Rodgers, Chorus network strategy manager, said in 2011 the average use in households was just 13GB.

“In the space of a few years, the demand has gone through the roof,” he said. “And there’s no sign of the demand slowing. Our view is that ever-increasing data demands and the evolution of new data-hungry devices and applications, such as 4K televisions and virtual reality, will only continue to fuel the demand for bandwidth.

April’s figures cover the Commonwealth Games, which were streamed by national broadcaster TVNZ, and school holiday period.

Vodafone ups rural broadband push

Vodafone has snapped up telecommunications service provider Team Talk’s remaining 30% stake in rural broadband provider Farmside.

Vodafone New Zealand acquired 70% of Farmside in June 2017 for $10 million in cash in a deal that included options to enable Team Talk to sell its remaining stake to Vodafone for $3 million cash at any time over the following three years.

Vodafone New Zealand chief executive Russell Stanners said the deal deepens the telco’s commitment to rural communities.

“With Farmside now firmly part of the Vodafone whānau [family], we can continue to deliver better outcomes for these communities and increase our presence in the rural broadband market,” Stanners said.

No immediate major changes are expected in the operation of Farmside, which will continue to be based in Timaru providing all its current services.

The change of ownership takes effect at midnight May 31, 2018.

Spark NZ adds to UC offerings

Spark New Zealand is adding BroadSoft’s cloud-based unified communications offerings to its lineup.

The new deal will see Spark offering a suite of UC services, including instant message and presence, hosted voice, mobile client support, a full-featured soft client for computing devices, desktop and file sharing, virtual meeting rooms and voice and video conferencing, based on BroadSoft’s UC-One application.

Broadsoft is now part of Cisco. The new service, which will hit the market ‘in the first half of this year’, will be branded Spark Cloud Phone.

Sally Gordon, Spark head of business marketing, said business customers have been asking for a feature-rich calling solution to help improve collaboration, and which can easily scale as business needs change.