KEY POINTS:
Ernie Newman never shies away from giving his colleagues in the telecommunications sector a serve if he thinks they deserve it.
At the moment, however, the chief executive of the Telecommunications Users Association lobby group is upbeat about where the industry is headed.
This year would go down
as "the year New Zealand took its giant leap in telecommunications - the year when our political leaders came to realise the enormous potential of the technology to transform New Zealand's position in the world", he told the 9th Annual Telecommunications & ICT Summit (Tel.Con9) in Auckland this week.
Competition was alive and exciting, and our global ranking for broadband connectivity was improving, he said.
Issues remained, however.
An overhaul of the "Kiwishare" agreement - the Telecommunications Services Obligations regime requiring Telecom to service unprofitable rural customers - was taking too long, hampering development of services in rural areas.
The delay in getting more competition in the mobile phone market was also a frustration.
But the "fibre future" - the fibre-optic overhaul of the country's phone and internet network, which both Labour and National are committed to - was set to revolutionise our telecommunications capabilities, he said.
While it was difficult to accurately predict the financial benefits impacts of New Zealand building a world-leading network included reduced traffic congestion, improved worker productivity and greater economic adaptability and resilience.
"It's hard to actually get the measure but it does not need a cluster of economists to recognise the benefits of becoming one of the world's early adopters of fibre to the premises will have enormous social and economic payback, while the cost of the reverse would be still greater." Earlier in the conference, Communications Minister David Cunliffe and National's spokesman Maurice Williamson spelled out their parties' respective fibre investment plans.
The significance of broadband as a utility service was highlighted by Rosalie Nelson, telecommunications research manager for analyst firm IDC, who said the number of broadband subscribers was expected to grow 89 per cent to about 1.5 million by 2012.
That will be accompanied by broadband revenue growth of a more modest 58 per cent as competition intensified.
IDC also expected the fixed-line phone market - the traditional core revenue base for companies like Telecom - would continue to decline by 5 to 7 per cent year-on-year.
The major phone companies used Tel.Con9 to plug their various investment plans.
"A year ago the investment climate for us was beset with uncertainty," said Telecom chief executive Paul Reynolds.
"Now we know what we're doing and what we need to spend our money on." That investment includes $1.4 billion on fibre-based infrastructure to run a "next generation" digital network.
Vodafone chief executive Russell Stanners said the July 11 launch of Apple's new 3G iPhone would accelerate a trend towards mobile devices becoming consumers' preferred means of connecting to the internet.
This was good news for mobile operators who make their money selling data connections. Users of iPhones on Vodafone's network were chewing through 30 times more data than users of other devices, Stanners said.
Brenda Stonestreet, TelstraClear's head of small and medium business, said TelstraClear was close to launching a new range of services, including VDSL2, a super-fast version of standard DSL broadband. It would be available at more than 130 sites across the country and offer download speeds of 30Mbps, she said.
The enthusiasm of TelstraClear's parent Telstra towards remaining in the New Zealand market has been a matter of speculation but Stonestreet said the Australian telco giant was committed to its New Zealand subsidiary.
"Their [Telstra's] view is very much that we have to make it on our own, we have to prove that we're profitable, we have to be a really good challenger," she said. "They're backing us, though. They're investing every year and the amount of investment is going up."
While the politicians at Tel.Con9 were touting the need to replace ageing copper line broadband connections with fibre, other speakers talked up the potential - in the meantime - of making the most of the existing copper network, through technology advances such as VDSL.
Ric Clark, technology infrastructure company Alcatel-Lucent's Melbourne-based vice-president of technology strategy and architecture, said while "fibre is the end game ... there is still a lot of opportunity in copper". He said it typically cost three to five times more to build a fibre connection to a user's home than to deploy VDSL over existing lines. Much of the cost associated with building a fibre network related to the expense of placing the new fibre cables in the ground.
"At the end of the day it's all about digging ditches ...
"It's somewhat ironic that two of the leading executives in the industry in New Zealand happen to be geologists [Paul Reynolds] and mining engineers [Telecom wholesale head Matt Crockett] because that might come in useful in some of this because that's principally what it's all about.
"It's not so much about bits and bytes, it's about digging ditches."
