TelstraClear testing internet TV service

Mathew Bolland sees a chance for TelstraClear to expand its triple-play service. Photo / Dean Purcell

TelstraClear has been testing a new television service with the potential to make it a full-service provider on the Government-backed ultra-fast broadband network.

TelstraClear's head of national broadband network engagement, Mathew Bolland, said the company had just completed testing of IPTV (television delivered over the internet) in a Wellington workshop.

It used the fibre network of Whangarei-based lines company Northpower, on which TelstraClear runs its local phone and broadband, to test the television service.

"It was effectively like a living room in a household up in Whangarei, with high-quality TV, multiple channels, on-demand content, all linked in with your phone and your broadband as a triple-play," said Bolland.

TelstraClear has cable networks in Wellington and Christchurch but until now has been unable to offer its triple-play service - broadband, phone and digital television - outside those areas.

The Australian-owned telco sees the opportunity to run services over the proposed ultra-fast fibre networks as its chance to achieve the scale it has always aspired to.

With the support of up to $1.5 billion of Government money, high-speed fibre broadband networks will be run out to three-quarters of New Zealand homes and businesses by yet-to-be-named network builders.

TelstraClear had already indicated that it had no ambition to help build the Government-backed fibre networks, saying its preference was to compete in areas where it had existing networks and buy access to the new networks everywhere else.

The potential customer reach of its access to high-speed fibre networks also opened up opportunities to import services being developed by its Australian parent.

Telstra is touting the T-Hub, a touchscreen device offering regular phone features and internet access, the ability to play music, look at videos and photos and run a household diary.

TelstraClear had made all the investments to be a company a lot bigger than it was, said Bolland, but had been limited by its network size.

He said investment in local loop unbundling - installing its own equipment in Telecom's telephone exchanges - gave it direct access to about 220,000 lines, thereby doubling its network reach.

"The building of other networks is pretty blimmin' exciting for us, because they're areas we couldn't justify building in and now we're showing we have a pretty unique capability to go to those guys and say, 'Hey, here's something that's going to make the end-user in your community want to use your network'," Bolland said.

The company would continue building its own fibre networks on an as-needed basis for larger commercial customers. He said much of the discussion to date around the Government's billion-dollar fibre roll-out had been about how the network should be built.

"The big question mark is: why would you use that network? What would you sell over it?" said Bolland.

Simply duplicating the Telecom network and offering phone and broadband services would not cut it.

"How are you going to attract people on there? It's going to have to be a high-value product, both in terms of revenue but what the customer is willing to pay and you need fast networks to deliver these IPTV services."

TelstraClear has been talking with the network builders vying for a share of the Government's fibre spending.

This month 38 companies, including several international players, indicated an interest in the Government's plans and have until the end of January to provide a detailed proposal.