Crown Fibre CEO, “FTTH will enable New Zealand to compete in a global marketplace”

Graham Mitchell is CEO of Crown Fibre Holdings, a group tasked with bringing ultra-fast broadband to New Zealand. He is speaking on Day Two of the Broadband ip&TV Asia 2012 conference taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. He tells how New Zealand’s ambitious initiative of rolling out fibre could help others learn from its experience.

What is the core technology your network is currently based on and what are the development plans for the future?

In the New Zealand context, ultra-fast broadband is taken to mean the availability of broadband services at a minimum speed of 100Mbps Downstream and a minimum of 50Mbps Upstream, and capable of being upgraded to ten times these speeds.

The Ultra-Fast Broadband network is a Fibre-to-the-premise (FTTP) network, building the “last mile” from a Point of Interconnect (typically one per city plus redundancy) to your door. It uses a mixture of Point-to-Point and Gigabit Passive Optical Networking (GPON) technology for the mass market and Point-to-Point services (Layer 1 and 2) for corporate and Government customers, with fibre diversity available. The GPON Layer 2 is mostly for Residential and Small to Medium Enterprises (SMEs). Products range up to 10Gbps symmetric, and service providers can customise Committed and Peak Information Rates.

The architecture allows for two fibres per premise in both the distribution fibre and the service line into the premise. It enables competition by providers of broadband, voice, video, security and other services in the premise. Video can be delivered over Ethernet for IPTV and Over the Top as well as via Radio Frequency (RF) overlay.

In future, the network has provision for additional fibre count, allowing for a higher proportion of Point-to-Point connections, in-fill growth in land use and future unbundling of GPON from 2020.

What major developments have there been for the broadband industry in your region over the past year?

In the last year both the New Zealand Government’s broadband initiatives – the Ultra-Fast Broadband (UFB) and Rural Broadband Initiatives, have moved into implementation phases.

The UFB aims to accelerate the roll-out of Ultra-Fast Broadband (FTTP) to 75 per cent of New Zealanders by the end of 2019, concentrating on providing access to priority broadband users (businesses, schools & health services) by the end of 2015. Crown Fibre Holdings was created to manage the initiative, which is supported by a NZ$1.3bn (US$1.06bn) government investment.

Over the last year, four public and private partnerships have been formed to build the UFB at a total expected cost of NZ$3.5 billion (US$2.9 billion) with the partners contributing the balance of funding. The largest partner is Chorus, the former network arm of the incumbent telecommunications company Telecom Corporation of New Zealand. Chorus completed a world first structural separation from Telecom (retail and mobile) in November 2011 and is now separately listed on the New Zealand and Australian stock exchanges.

The Government funds the layer one “passing” (communal infrastructure) and the partner funds the drop or service line as well as Layer 2 equipment.

Full scale UFB deployment also commenced in 2011. Good progress is evident, with 70,000 premises expected to be passed by June 2012 and around 200,000 by June 2013. At this early stage, over 900 connections are already in place. Over 30 Retail Service Providers (RSPs), who take the UFB wholesale products and create end-to-end offerings for consumers and businesses, have signed up to deliver UFB services, and innovative retail plans are now coming into the market.

Speed is often touted as a priority, but some view the major challenge to be coverage and network capacity. What is your view?

UFB is already delivering higher broadband speeds that are important to improving productivity and service delivery in health and education. But UFB’s wide coverage, reaching 75 per cent of the population by the end of the decade, will also be important in future in creating a network effect which encourages usage and innovation.

Is FTTH really necessary for businesses and consumers and what are the stumbling blocks to rolling it out?

FTTH will enable New Zealand businesses to compete in a global marketplace. Ninety-seven per cent of New Zealand businesses are small to medium enterprises, so working at and from home is an attractive proposition and will drive UFB uptake.

Civil engineering barriers are a key challenge in the New Zealand rollout. The country is mountainous and has low urban density (Singapore is 5.7 times more dense than Auckland, Paris 17 times), while the volcanic geology in parts in the country is also a challenge.

To what extent can fixed wireless connections help in the roll out of broadband connectivity?

Schools and New Zealand’s small to medium enterprises are likely to be among the greatest users of fixed wireless connections particularly in rural as opposed to urban locations. Schools and businesses are among priority users in the UFB initiative, receiving service early in the deployment. Wi-Fi is also likely to be the leading form of connectivity to UFB in existing homes.

Will the dominance of mobile connectivity limit the growth opportunities for fixed-line connections?

Mobile and fixed line services are largely complementary: mobile towers require fixed fibre lines to deliver service, while fixed wireless can assist in driving fibre uptake in many homes, schools and businesses.

What are the trends in terms of data traffic and how is it affecting your network expansion plans?

More than 80 per cent of New Zealand’s traffic is sourced from offshore, so most sessions are dominated by an inherently long transmission path. Round trips can exceed 30,000km, causing issues with latency and packet loss. Most traffic passes through Auckland, New Zealand’s largest city. Congestion, packet loss and costs can be reduced through caching on Content Delivery Networks. RSPs developing caches and CDNs may differentiate their services by offering free local and national traffic.

What are the biggest challenges you expect to be facing over the next 12 months?

As the UFB rollout continues the four partnerships will be bedded down, with further deployment plans being released and customer growth ramping up. The industry is working on sound operational and business support services, encouraging uptake through our partners and supporting the development of further UFB products.

Why is your attendance at Broadband ip&TV Asia 2012 so important for you and your company and what aspect are you looking forward to most?

New Zealand is keen to share its FTTP experience with others and learn from international deployments. We are a small, geographically isolated country, and world-class connectivity is vital to our economy.  We are keen to learn about uptake trends, barriers and drivers abroad.

The Broadband ip&TV Asia 2012 conference is taking place on the 15th-16th May 2012, KL Convention Centre, Kuala Lumpur, Malaysia. Go to the website now to register your interest.

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