Spark signs on for Gigatown

UPDATE / Dec 16: Spark has signed on to support Chorus' Gigatown, filling a big hole in the lineup of retail ISPs willing to provide 1 gigabit-per-second service to the winning town, Dunedin.

Home, mobile and business CEO says Spark will also fulfill its earlier promise to provide GigaWiFi on some of the WiFi hotspots the company already has in the winning centre.

Spark holds around 50% of the retail market.

The second-largest ISP, Vodafone (which holds around 32%), has yet to release pricing but earlier told NBR it is preparing plans. Chorus' 1 gigabit service will begin in March.

It's a boost for Chorus to have Spark onboard. 

But NBR's key questions around the competition remain.

People who know the broadband market will be impressed by the pricing. $99 a month for unlimited data at 1 gigabit/s (30 times the speed of the cheapest fibre plans, and 100 times the speed of most copper broadband) is a very keen deal.

But most Dunedinites — like people in other towns — will be on $70 to $75 plans. 

Will paying an extra $25 a month feel like winning a competition?

Sure they'll get much faster broadband (if they live in an area that's been upgraded for UFB fibre).

But can even the biggest fibre advocates come up with any reason why a home user needs 1 gibabit of bandwidth (that is 1000Mbit/s? I can't, for all my support for the UFB overall.

It's hard to see how any home (or indeed most businesses) need more than the ample bandwidth provided by a 100Mbit/s or 200Mbit/s connection, even for a family that wants to game, cloud compute and stream Netflix in 4K at the same time (not that there's much 4K content yet, but Netflix recommends a 25Mbit/s connection for its ultra high defnition option).

Dunedin wins Gigatown, but largest ISPs not onboard

Nov 27: Dunedin has won Chorus' "Gigatown" competition, which began back in October 2013.

The city reached the final five, along with Gisborne, Nelson, Timaru and Wanaka, after a tussle that involved clocking the most mentions of "Gigatown" on social media. The final result also involved a popular vote, and proposals for how the towns would use one gig broadband (see Dunedin's here).

Dunedin receives $500,000 community grant, a $200,000 innovation grant and, more, a  low-cost 1 gigabit per second UFB fibre for all who live in a part of town all ready covered by the UFB**, and whose ISP is supporting Gigatown.

1 gigabit/s or "one gig" colloquially, is 1000Mbit/s — the sort of speed reserved for big companies and all their staff a couple of years ago. NBR shares a 100Mbit/s connection, or a 10th that speed, among 30 staff. Most copper broadband connections are around the 10Mbit/s mark.

I'm a huge advocate of the UFB rollout. It's smart Crown intervention to move the market along. And faster, more reliable fibre is a must-have for businesses, schools, hospitals, government departments and homes as we enter the age of cloud computing. But a 30Mbit/s or 100Mbit/s connection is all most homes or small busiinesses need, even if they have multiple people who want to stream video, game and cloud compute at the same time. I'm scratching my head as to why any Dunedin home needs one gig speed now (in the future; yes, with streaming ultra high definition 4K video and so fourth — but the whole of the UFB is buiilt to support one gig bandwidth, and it's going to be available to all down the track).

It is a positive that business connections were added during the Gigatown competition, which started as residential-only.

Will $100/month broadband feel like a win?
Orcon was one of the first to put a cost on a one gig plan: $85 per month with a 100GB data cap and $95 a month with unlimited data. Business plans will cost between $100 and $135, with $10 extra for a static IP address, one line included and $35 for each additional line.

That's pretty keen pricing. Primo Wireless — one of a handful of small ISPs that are so far offering commercial 1 gig residential service up in Taranaki — is charging $109/month with a 50GB data cap, $119 for 100GB, $129 for 250GB, $149 for 500GB and $169 for 1000GB (unlimited for all intents and purposes). 

Yet although the tech savvy and industry insiders will think Orcon's $95 for one gig unlimited a great price — and it is — the fact is most residents of the winning Gigatown will be paying around $70 to $75 for their broadband at the moment. Upping that to close to $100 might not feel like winning a competition.

Orcon says it will also throw in a Roku 3 streaming devices worth $150 — a Roku 3 being a gadget that makes it easy to get a broadband-delivered movie and TV service like Netflix playing on your regular television. That should be fine, as long as residents of the winning Gigatown double-bolt their doors against Sky TV lawyers.

MyRepublic, the first ISP to reveal Gigatown pricing, says it will upgrade its 100Mbit/s residential plans, Pure ($99) and Gamer $109) to 1 gigabit/s for residents of the winning town. Both plans offer unlimited data. Snap has also weighed in with $99 and $119 unlimited plans.

Locally owned and operated Dunedin ISP Wicked Networks also announced this evening that "we will immediately upgrade all UFB ports within its customer access network to gigabit capability."  Wicked Networks principal Stu Fleming says his company will charge $150 a month for residential and $180/month (ex GST for) business.

"We feel that those numbers more accurately reflect the costs of delivery ex-Dunedin.  We've been in that space for 10 years now and understand the community," Mr Flemming told NBR.

"Having said that, mass-market residential isn't our primary market.  We know from the strength of our involvement with local entrepreneurs and startups that the innovative communities and being agile ourselves are the most important."

The one gig service is due to kick off in March next year.

Big dogs conspicuous by their absence
That gives two notable hold-outs at this point — Spark, which holds around 50% of the ISP market, an Vodafone, which has about 30% — a lot of time to consider whether they want to join the party.

Without them, the vast majority of Dunedinites will have to switch ISP (which often involves break fees) if they want to grab one gig service.

Spark spokesman Andrew Pirie told NBR his company supports the general aims of the top-town competition. But when it launches a one gig service, it wants it to be for evey town. "As a nationwide company our focus has been on working with both Chorus and the other LFCs towards a nationally consistent approach to fibre inputs, including gigabit per sec speeds.  For this reason we are not in a position at this time to offer such a product just to Gigatown," Mr Pirie said.

Vodafone spokesman Brad Pogson says his company is preparing a one gig service for Dunedin home and business customers. He notes his company already provides a 200Mbit/s service.

CallPlus (which includes the CallPlus, Slingshot, Orcon and Flip brands) is the third largest ISP with around 12% of the market. So far, CEO Mark Callander says there are only plans to weigh in with it innovation brand, Orcon, not its maintream brand, Slingshot. CEO Mark Callander told NBR, "Orcon is a market leader in fibre, and has opted to make the necessary investment in the Gigatown opportunity. This extends from network capacity to CPE [customer premise equipment like routers] to deliver the desired customer experience." At this point, he's not motivated to bear the costs of Slingshot joining the one gig offer.

NBR suspects there is some arm wrestling going on behind the scenes between the big ISPs and Chorus over who bears what percentage of Gigatown connection and setup costs.

March next year, when Gigatown service goes live, will also be around the time that Chorus and the three local fibre companies (Enable, Ultrafast Fibre and Northpower) agree on nationwide standards for one gig and UFB other services — a move that should see one gig service put on ISPs' menu in most towns in NZ.

ckeall@nbr.co.nz

Follow @ChrisKeall

* A recent update from Communications Minister Amy Adams said the 10-year UFB rollout was 44% complete in Otago/Southland. Chorus' 2014  annual report said UFB fibre had been rolled past 44,500 or 37% of Dunedin premises. As of The September 30, 536,000 customers nationwide were within reach of UFB fibre. Of those, 55,000 or 10.26% had chosen to take a UFB plan with their ISP.