BBWF 2018: Chorus sings the praises of centralised infrastructure model

Yesteryears rumbling story was the enforced separation of BT and Openreach, and while this might have been nothing more than a thinly veiled show, Ofcom might look at the success of Chorus for future inspiration.

Down in New Zealand, Chorus is an example of what can be achieved through structural separation and effective centralised investment in broadband infrastructure. The business is rolling out fibre faster than many in the world, giving rise to a landscape which benefits the consumer and is remaining profitable in the meantime. Speaking at Broadband World Forum in Berlin, Kate McKenzie, CEO of Chorus, demonstrated just what is actually possible.

Back in 2011, Telecom New Zealand was completely separated into two legal entities; Spark for mobile and Chorus for broadband. Unlike the Openreach and BT separation, these are two entirely separate (and listed) businesses, both of which are proving to be a success.

Fibre broadband penetration is at roughly 70%, with the team targeting 87%. Ubiquitous penetration would be perfect, but due to the at times harsh environment in New Zealand, it is just commercially impossible with today’s economics. New Zealand might be a small country, but the environment is incredibly varied and population density can be a nightmare. Technology is now the third largest contributor to the economy, accounting for 8% of GDP, and is steadily growing. The country now even has its own space programme, and fibre penetration has been heralded as part of this success.

“Coming up with a plan and sticking to it is key to success,” said McKenzie. Sensible regulations, consistent government policy, an understanding of consumer demand, as well as a vigilant board to keep a close eye on costs and returns, are needed to create a successful centralised infrastructure model.

The only suspect outcome is the 90+ service providers in the market. This might be great for the consumer, but it is not sustainable. Barriers are entry are almost none existent allowing anyone to get involved, but numerous of these businesses will fail due to the cut throat nature of competition. However, there certainly are some interesting models. One example is energy companies bundling energy and broadband services together.

Of course, there are dangers of centralising so much spending. Without a resilient and robust regulatory framework, the monopoly could be abused. Australian broadband providers are supposedly feeling the sting of NBN’s dominance with Telstra complaining wholesale rates are double what they should be. The political agenda also needs to be quite stable, as too much interference or changes from different government administrations could cause disaster.

Despite the negatives, New Zealand seems to have struck the right balance. Perhaps this is a country Ofcom should have a close look at. BT might have resisted (and will obviously continue to do so) pressure to remove Openreach from its business, but under the right conditions, New Zealand has shown the great benefits which can be realised for the economy and the consumer.

NZ and Canada decline to jump on the Huawei banned wagon

Despite the current fashion for banning Huawei among US allies, New Zealand and Canada have both indicated they may not play ball.

The Chinese kit vendor has been a pariah in the US for years, but more recently Australia decided to join in the fun and there have been rumours of other countries with close ties to the US following suit. But a couple of reports this week point towards a lack of unanimity on the part of ‘the west’ over this matter.

Reseller News spoke to Kiwi MP Andrew Little, who indicated his government is not convinced Huawei poses a security threat. “New Zealand develops its own, independent security policy based on inputs from a range of sources,” said Little. “As you’d expect with any change in technology of such significance as 5G, officials are considering whether the existing framework will remain fit-for-purpose in the new environment.”

While this appears to leave open the possibility that NZ might yet sanction Huawei, US neighbour Canada seems to be taking a more absolute stance. Earlier this week the Globe and Mail published a story with the following headline: ‘No need to ban Huawei in light of Canada’s robust cybersecurity safeguards, top official says’.

This is the verdict of Scott Jones, the head of the Canadian Centre for Cyber Security, who reckons Canada is perfectly capable of working out for itself whether any technology presents security concerns.

“We have a very advanced relationship with our telecommunications providers, something that is different from most other countries to be honest from what I have seen,” Jones is reported as saying. “We have a program that is very deep in terms of working on increasing that broader resilience piece especially as we are looking at the next-generation telecommunications networks.”

Huawei is understandably keen to see these decisions reported as widely as the Australian one. It seems reasonable to assume that if enough US allies ban it from 5G infrastructure then it will become increasingly difficult for the rest not to follow suit. Europe has kept quiet on the matter and so long as countries like NZ and Canada decline to play ball Huawei might feel it’s on top of the damage limitation