Fibre companies talk connection costs for businesses, homes

Now that we’re getting to the sharp end of the $1.35 billion Ultrafast Broadband rollout, with the first major swathe of home and business connections just months away, readers are starting to ask meat-and-potatoes questions.

What will it cost to connect? Will fibre run right into my home? What if I live down a right-of-way?

Last night I dropped by an event hosted by Huawei for Enable (the Christchurch UFB winner) and Ultrafast Fibre (the consortium led by lines company Wel that picked up Hamilton, Te Awamutu, Cambridge, Tauranga, Tokoroa, New Plymouth, Hawera and Wanganui).

I took the opportunity to relay a couple of NBR reader questions and comments to Enable CEO Steve Fuller and Ultrafast Fibre CEO Maxine Elliot.

Both said that for businesses, the connection cost would equate to the cost of two months’ charges on a business plan (Crown Fibre Holdings has previously said it expects its partner's business plans to cost less than $600 a month).

Mr Fuller said Enable residential customers would get connected for free if their home was within 30m of the curb (that’s no small thing given it will cost somewhere between $1500 and $3000 to connect each home. Crown Fibre Holdings’ investment in Enable, Ultrafast Fibre, Chorus and Whangarei winner Northpower oils their respective finances to allow the subsidised connections).

There’s been talk of fibre running along every curb, but cost-saving copper running into homes.

Mr Fuller said (like Ms Elliot) said, nope, it’ll be fibre all the way.

Fibre will be laid right into your home to up to 10m into your house. (If that’s not enough to reach your central wi-fi point – or, once we get into TV-over-fibre, your home entertainment area then you could be looking at wiring costs).

If you live further than 30m from the curb, then there will be a “small fee” (still undisclosed), Mr Fuller said.

If, say, there were four neighbours living down a 120m right-of-way, then if they all decided to get fibre at the same time, then their allotted 30m of free connection could be lumped together to cover the distance, Mr Fuller said.

Ultrafast Fibre: free free free
Ultrafast Fibre is taking a more aggressive approach.

All residential fibre connections will be free.

What if you live down a long right of way? Still free, Ms Elliot said.

If you’re the first person in your apartment block to want fibre, with no other takers in the building? Still free.

The Ultrafast Fibre CEO conceded that the “stick” I wrote about yesterday (the nefarious practice of “averaging” raising copper line prices by around $20 a month, shortly) could help Ultrafast Fibre.

But she pledged its first fibre plans (it will connect its first homes in Tauranga and Whanganui in July) were already offer more services than copper DSL for the same price (read more about monthly retail pricing here and here).

Couple that with Ultrafast Fibre’s aggressive time-table – it’s aiming to finish its rollout in 2016, or four years before Chorus – and the Tron and other areas under its Crown fibre contract are looking like the place to be for fast internet fans.

Forced to make its own way in the world
It’s no surprise Ultrafast Fibre is taking such a lean-forward approach.

Along with Northpower, which holds the relatively tiny Whangarei contract, it’s the only outfit that conforms to former ICT minister Steven Joyce’s original vision of a local fibre company that offers keen pricing because they had no other broadband business. If they couldn’t lure people to fibre, there would be nothing doing.

I'd hope Chorus will shoot for growth by pushing fibre, too (and it has cut wholesale pricing across the board). But the spun-off Telecom wholesale/network division's behaviour will also be shaped b bean counters who want to sweat copper assets as long as possible (as long as possible, that is, without missing fibre roll-out milestones - a scenario that would jeopardise Chorus' giant, interest-free government loan).

Huawei facilitating cooperation behind the scenes
Enable and Ultrafast Fibre have both chosen Huawei as their main infrastructure supplier, and will share back-end systems hosted by the Chinese company (including the above $750,000 piece of kit, located in Huawei’s central Auckland office -  where the company now occupies four floors – which will be used for testing and to help manage connections across Enable and Ultrafast Fibre).

Ms Elliot said there would also be cooperation with Whangarei winner Northpower, though to a lesser extent (Northpower, like Chorus, has opted to use fibre from Sweden’s Ericsson. Chorus is currently using incumbent Alcatel Lucent for layer 2 electronics, though plans to tender. Northpower is using Ericsson for layer two.)

Retail ISPs milling
There was a big turn out of retail ISPs at last night's event.

Enable has named two retail ISP partners so far - Snap and WorldxChange.

Ultrafast fibre has gone further, publishing a lengthy list of all the ISPs who have signed letters of intent. Telecom and TelstraClear are the two notable omissions at this point (although as Ms Elliot pointed out, Ultrafast Fibre's final wholesale pricing only went to ISPs last week). TelstraClear had several people along last night, indicating a degree of interest (the UFB, along with expansion of its own network, was also name-checked as a potential area of growth in the company's recent financial result). That's good to see from a company that once decried Crown fibre as "network socialism" that would inhibit private investment.