Ultra Fast Broadband and the Property sector Rohan MacMahon Strategy Director May 2011
NZ Govt’s Ultra Fast Broadband Objective To accelerate the roll out of ultra fast broadband to 75% of New Zealanders over ten years, concentrating in first six years on priority broadband users such as businesses, schools and health services, plus green fields developments and certain tranches of residential areas CFH : Crown-owned company created to deliver: o FTTP ~3.9M population end 2019, ~1.2M premises o Priority users by end 2015 o UFB policy: 100Mbps / 50 Mbps; 1Gbps + for priority users o “Sister” initiative for rural areas May 2011 2
Context: UFB policy drivers • General purpose technology : Greater efficiency & productivity Sustainable job creation Improve education & health Greater social inclusion Environmental benefits • Internationally competitive • Accelerated investment • Open access network May 2011 3
Context: growing demand for bandwidth Kilobits per second, log scale Source: NBN Co, Australia May 2011 4
UFB schematic: “the last mile” Central Point of Point-to- Office Interconnect Cabinet Point Switch Retail Corporate Service Providers 1 Point of GPON ONT Interconnect per Small Business Candidate Area GPON ONT Premise Boundary Point of Interconnect Residential Partners fund – Layer 1 & 2 CFH funds Layer 1; partner funds Layer 2 Outside UFB scope May 2011 5
So what are you driving? Improvement Copper Fibre POTS (voice) + ADSL2+ UFB 100/ 50 POTS +100% 1 line 2 lines CIR >60 times 45 Kbps 2,500 Kbps Upstream >60 times 850 Kbps 50,000 Kbps Downstream 10-7 times 10-13 Mbps 100 Mbps Throughput Best efforts Certain Video No IP-TV Wholesale Price ~$60 $55 Note: Prices per month ex GST. UFB offers vastly superior product for lower wholesale price
Takeup drivers: Residential • ADSL & POTS substitution: o Current NZ broadband ave 3.4 Mbps* • Schools viral into residences • Video Over The Top, IP-TV & P2P VC MDUs • Upstream undervalued in current asymmetric model • Social media moving to Video • Family & Friends WANs Note: * NZ 27th in Akamai rankings. Source: Akamai State of the Internet, Q4 2010. May 2011 7
Takeup drivers: Business / Schools / Health • High % SOHO in NZ • Export-oriented businesses (19% of GDP) • Corporate data quite expensive o Regional WAN tails often <1Mbps • Data centre infrastructure improving • Cloud computing increasing • Network for Learning • National Health IT Plan • Health clusters May 2011 8
UFB Candidate Areas & Partners Whangarei Auckland Candidate % of Waiheke Island Areas UFB Tauranga Whakatane Pukekohe, Waiuku Rotorua 2 15.3 Hamilton Tokoroa Gisborne New Plymouth Taupo Napier-Hastings 1 1.6 Hawera Wanganui Palmerston North, Feilding Levin, Kapiti Masterton 24 69.4 Nelson Wellington Blenheim Greymouth Rangiora 6 13.7 Christchurch Ashburton 33 100.0 Timaru Queenstown Oamaru Dunedin UFB partnerships will cover all 33 candidate areas (75% of NZ population) by end 2019 Invercargill
UFB Deployment: initial areas • Whangarei: UNDERWAY o 14km of Aerial deployment: ~450 premises o 5km of Underground deployment: ~150 premises o Initial customer connection: June/July 2011 o ~10 schools targeted this year • Hamilton, Tauranga: o Initial deployment: Hamilton/ Tauranga/ Wanganui Q3 2011 o Service activation: Q4 2011 • Christchurch: o Deployment expected to commence July 2011 • Auckland: o Deployment expected to commence August 2011 o Other locations TBC but expected start in 2011 10
UFB Deployment: further areas When is UFB Coming To My Neighbourhood? • Roll-out region by region • Focus on priority users (schools, health & business) • Residential greenfields and brownfields sites also a priority How Can I Get Fibre To My Greenfields Development? • Register location on NZ Broadband Map • Simply assists in planning; not an obligation to take any service How Soon Will Fibre Be Deployed to Existing Residential Properties? • Prudent to check with CFH or the relevant Local Fibre Company regarding the deployment plan for your area • Deployment plans and timelines are being progressively posted on CFH website** as agreed Note: * www.broadbandmap.govt.nz/map/ ** www.crownfibre.govt.nz/ (see Publications/ Resources) May 2011 11
Deployment Comms: Guiding Principles: • Proactive engagement • Timely provision of information • Honouring commitments • Risk identification & issue escalation • Safety ethos Typical communications: • Community 0800 line, email & website • Community awareness workshops • Local advertising • Fact sheets & flyer drops • Thank you cards Photos courtesy: Northpower. May 2011 12
Optimal Topology for NZ: • Mix of P2P and PON topology: o P2P Layer 1 and 2 services (mostly Corporate & Govt) o GPON Layer 2 (mostly Residential / SME); Layer 1 2020 • Provision for additional future Fibre count: o Higher proportion of P2P o In-fill growth o Future unbundling Northpower aerial deployment • Civil engineering is key NZ challenge: o Predominantly rock (volcanic) o Mountainous o Low urban density Mini- trenching trial, Wellington Image credits: Northpower, CFH May 2011 13
Industry Overview: End Customers Residential SMEs Enterprise Schools Health Government Retail Service Providers Retail Layer 2 (lit RSPs may take Layer 2 lit or Layer 1 UFB GPON 100/50 Mbps UFB GPON 100/50 Mbps fibre, copper P2P dark fibre services UFB P2P 1Gbps, 10 Gbps UFB P2P 1G/10 Gbps ADSL) UFB video transport UFB video transport Copper (ADSL & VDSL) Copper (UCLL) UFB Dark Fibre UFB Fibre P2P Access Layer 1 P2P : 69% of UFB and 100% of LFCs: 31% of UFB Network copper (24 candidate areas) (9 candidate areas) Providers May 2011 14
Retail Service Providers: • Letters of Intent with indicative pricing • Wholesale Services Agreement • Service descriptions & prices • Trials & pilots • Demand mapping
Getting Ready for UFB: • Plan to lay ducts alongside other utilities in the build so that UFB can be deployed as soon as it is available. – A single conventional 100mm duct will suffice. • Ensure requirements for UFB are known to Local Fibre Company/ Chorus. • Within existing & new premises, use the TCF Premise Wiring code * to ensure houses are capable of getting the most out of UFB. • Consider future connectivity needs of owner-occupiers or tenants. – UFB will be able to be delivered in the home by Wi-Fi; – Can use existing copper in the home for legacy services (POTS voice, alarming, fax, Sky TV authentication); – However, those wishing to enable the richest possible connectivity should invest in Cat 5e cabling, particularly for concrete or brick houses. Reference:* http://www.tcf.org.nz/content/dc07abcd-21f8-4288-b55b-6f861bdd4d02.html May 2011 16
Will UFB Add Value to Properties? • Broadband becoming fundamental to our lifestyle: – Now considered a human right in Finland! • Properties with UFB access likely to be more valuable to owner-occupiers and tenants than those without. – US market research suggests Fibre To The Home will add US$2,500 to US$5,500 to the value of new houses. Source: Michael Render, RVA LLC, 2008. May 2011 17
UFB & sustainability: Power consumption (watts per user) • UFB for remote working: – NZ already has high rate of SOHO – UFB will allow High Defn Video Conference, Home WAN etc. • UFB for home management: – Smart grid to reduce energy use • Fibre (GPON) has lower carbon footprint than DSL copper UFB will help make our homes more sustainable 2004 2005 2006 2007 2008 2009 2010 Source: Alcatel Lucent, 2008. May 2011 18
Thank you – and time for questions CFH contact: Rohan MacMahon, Strategy Director E: rohan.macmahon <at> crownfibre.govt.nz Ph: 09 912 1970 T: @rohmac May 2011 19
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