Competing fibre optic networks will help eliminate the bandwidth bottleneck in Hawke’s Bay from mid-2012, presenting both a challenge and opportunity to businesses, schools and ultimately residential internet users.

Locally-owned power company Unison and Telecom’s former network arm Chorus plan to take the region’s communications infrastructure beyond the present excuse for broadband to a digital superhighway with no speed bumps.

A recent Deloitte-BusinessNZ survey claimed that after physical transport, broadband and telecommunications infrastructure had the greatest potential to contribute to New Zealand’s future economic prosperity.

However, talking about bitumen and direction signs doesn’t tell us what’s in the cars and trucks that travel our roads and neither does rattling on about cable lengths and capacity without considering content and consequence.

Shifts happen

Hamish White, the new CEO of soon-to-be rebranded Hawke’s Bay telco Airnet, says fibre signals the beginning of the end for traditional media and will massively change access to games, music and videos.

“People will stop buying CDs and DVDs; they’ll just subscribe to a library,” says White, a former Telecom head of consumer marketing.

“A lot of people with iPads for example are no longer subscribing to the NZ Herald, they access media through iTunes for a much richer experience. We’re seeing the displacement of traditional news and TV – the industry is being redefined.”

Airnet is among an elite group of ‘tier one’ carriers, and the only one in Hawke’s Bay able to connect directly into the Chorus network.

The company has just recapitalised and restructured for growth based on access to fibre from Chorus and Unison, alongside its fixed wireless and broadband-over-copper offerings. While cagey about its imminent make-over, it hints at future offerings including streaming video and radio through its reseller channels.

Fibre access will also create a ‘tech-tonic’ shift for businesses, throwing up endless possibilities for those who have an ear to hear and the motivation to make a strategic shift.

“Competing on price is dumb; businesses need smarter tools so they can do business more successfully and that means using technology to build relationships,” says White.

Essentially people want to be validated by technology whether they’re customers of inner city retailers, manufacturers, processing companies, horticulturalists or wineries.

Fibre can change the way we work, teach and learn – from creating efficiencies in the supply chain, linking and tracking everything from source to shelf, to using high definition video conferencing and workgroup or collaborative applications to minimise travel costs.

The new communications conduits will improve access to remote applications hosted in the ‘cloud’; enable full conferencing with Skype so the images keep pace with the voice; connect PBX systems; encourage the use of GPS and map-based services; and facilitate the sharing of 3D and engineering diagrams, X-rays, animations or raw footage for movie editing.

Fibre will also support workflow and paperless office systems which to date have been as elusive as the paperless toilet.

Fibre to the door

Chorus, the new owner of much of the copper and fibre optic cable already across the greater Bay area – around 1100 km last count – has a mandate to deliver fibre-to-the-door, as part of the government’s Ultrafast Broadband (UFB) network.

Chorus, which won a monopoly role in the $1 billion UFB deployment, began work in Napier and Hastings before Christmas, with access for 90% of businesses, all health premises and schools promised within four years.

Chorus cable will deliver at least 100Mbit/sec speeds to around 125,000 Hawke’s Bay homes, around 2,500 business premises, 70 schools and more than 700 medical and other healthcare services.

Its first next generation access (NGA) fibre cabinets in the Bay will not be in service until April-May 2012. Full region-wide coverage is expected before December 2019.

Concurrently the Government’s Rural Broadband Initiative (RBI), a consortium of Telecom and Vodafone, will fill in the gaps with wireless, enhanced copper and cellular coverage to outlying areas.

Earlier this year, when Unison lost its CentralFibre UFB bid to Chorus, it already had 140km of backbone fibre to its electricity sub-stations. Rather than pulling back, the plucky Hawke’s Bay operator, with the full support of the Hawke’s Bay Power Consumers’ Trust, escalated its roll out.

From March 2011 it began extending fibre into the business areas of Hawke’s Bay, Rotorua and Taupo. “We believed Hawke’s Bay couldn’t wait, so we just got on with it,” says UnisonFibre sales and marketing manager, Wayne Baird.

By the end of November over 100 customers were on board, from small innovative software companies and manufacturing firms to large multi-site organisations including the Hawke’s Bay District Health Board.

UnisonFibre now covers much of the Hastings CBD and Onekawa, and is moving into Havelock North, Omahu, the Napier CBD and other areas where there’s clear business demand.

Wasted on the Bay?

So is having two networks capable of delivering up to a gigabit per second data speeds overdoing it for a digitally-deprived region with an entrenched rural mindset?

Chamber of Commerce chief executive Murray Douglas thinks not. He reckons competition keeps everyone honest, although he’s concerned local businesses need urgent help to get up to the mark.

“We need businesses to see ultrafast as a transformational technology that can increase productivity and our connection to the world, not just a faster way to do emails.”

To raise the level of knowledge and skills, Business Hawke’s Bay, the region’s new growth promotion group, is creating an e-commerce hub to showcase leading edge uses of fibre, wireless and related broadband technologies.

The demonstration and training space will open early in 2012 with connections to all the main providers and access to a multitude of applications. Chorus, Gen-i, Telecom, True, Unison, FX Networks and Airnet are all “in the conversation”, although the big question remains, what’s in it for them?

“In order for Hawke’s Bay to benefit, these providers must get the business. That means we have to showcase, demonstrate, encourage, educate and basically connect businesses to this underground spaghetti,” says Douglas.

“We have to change business processes and people’s head space to do things faster with bigger packages and different technologies.”

He’s talking about bringing in experts or ‘translators’ to make the case clear and even giving local technology managers a tickle up to get acquainted with smarter technologies.

The Chamber of Commerce is leading by example. It recently moved its in-house business servers into a virtual or cloud environment. In other words their core applications, databases and software are now hosted off-site – in fact offshore – and they access everything over high speed internet.

That’s removed the cost of owning, maintaining and managing computer server hardware and the associated network infrastructure. Staff can use iPhones and iPads anytime, anywhere to access the software and services that make the business tick. “I’d say we’ve saved hours and days even,” says Douglas.

Unusual activity urged

UnisonFibre sales manager, Wayne Baird

UnisonFibre sales manager, Wayne Baird, would like to see a lot more activity on his fibre network rather than the current wait and see approach. “Hawke’s Bay is traditionally a bit slower than other regions to take up new technology.”

Aware competition is just around the corner, Baird says the company has to be nimble and stay close to its retailers. One of its big advantages is the ability to run cable across its power lines to speed up delivery and where it goes underground it’s open to Chorus sharing the trench or even capacity on its cables.

Co-opetition options

In fact it’s all starting to sound rather cosy with local telco Airnet interconnecting directly with Chorus yet still championing UnisonFibre, and concerned it doesn’t get a raw deal.

CEO Hamish White suggests the main carriers will have “no love to show Hawke’s Bay” over the next two years as they’ll be primarily focussed on the major centres and not eager to interconnect with wholesalers like UnisonFibre.

White says it’ll be up to Airnet to lead the local innovation wave and ensure UnisonFibre is an important part of the mix. “If we look after them, we could all do very well out of this.”

Airnet’s full service network and its relationships with the major providers position it well as a vital link in the ultrafast broadband chain and as a provider of applications and content. It is however concerned many local technology companies are not up to the challenge.

To that end, it’s moving into education mode to ensure equipment and service providers can leverage the opportunities. That may mean recommending smart new PBX or point of sale systems so people understand their business better and communicate more effectively with customers.

Airnet sales and marketing manager Ben Deller is concerned that some integrators and would-be telcos seem to have no idea what they’re doing and are already giving fibre a bad name.

While some players are offering 10/10Mb fibre services for $100 a month, Deller says they’re doing a disservice to their customers who’re disappointed with the result. “They could get ADSL2 over copper and achieve speeds of 22Mb downstream and 2.5Mb upstream for a fraction of the price.”

Business at light-speed

In reality fibre is just part of a marvelous mix of technologies – fixed wireless, wi-fi, copper (ADSL2, VDSL), cellular and even satellite connections – that can deliver superfast connections to offices, warehouses, packing sheds, schools and homes around the country or the world.

Users don’t need to know who put the fibre in the ground. What really matters is the quality of the service and what you are doing with it.

Chamber of Commerce CEO Murray Douglas warns local businesses they need to start reclaiming their share of e-commerce from sites like Amazon.com which are taking double digits from New Zealand retailing.

While some are at the leading edge, he fears those who don’t lift their game, for example retail outlets who refuse to have a computer, may not be around for much longer. “Dinosaurs are at real risk at the moment. We know fibre can transform low productivity of labour and capital, but we have to work really hard on this.”

He says the value for money from fibre speeds will be in productivity gains, including eliminating the dilemma of ‘distance to market’ through videoconferencing or making good use of social media.
Airnet’s Hamish White agrees. Bay businesses need to stop defining themselves by the 2.9% of the population that live here and start looking at 100% of the population of Australasia.

They need to be asking why would people want to transact with them, what their point of difference is, and how can they use these new tools that can connect them to a much wider market than they could ever have imagined?

So, will Hawke’s Bay take a back seat as consumers and importers? Or rise to the challenge as producers and exporters, innovating and adding value to the regional economy as the world of borderless, on-demand connections goes light-speed?

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