Chorus passes 588k premises with high-speed fibre

New Zealand fixed-line telecommunications provider Chorus has provided an update of its fibre connections, revealing that 588,000 premises have now been passed by its fibre services, with 46 percent of fibre customers on plans of at least 100Mbps.

Chorus added that in the South Island city of Dunedin, which won the Gigatown competition, there are 4,000 premises with 1Gbps connections. VDSL coverage also increased by 175,000 premises over the quarter, thanks to changes in transmission frequencies.

For the quarter ending March 31, fixed-line services decreased by 14,000, down to 1.75 million, while broadband increased by 5,000, to reach 1.228 million, "reflecting broadband's growing utility status", Chorus noted.

On Thursday, the New Zealand government had affirmed this broadband-as-a-utility perspective in announcing a set of policy changes for telecommunications regulation, with the government planning to move to a "building blocks-style" utilities-based framework for copper and fibre from 2020.

Under potential changes to the Telecommunications Act 2001, the government will also consider how best to support mobile competition; retaining the present unbundling requirements to encourage innovation across the Ultra-Fast Broadband (UFB) network; and ruling out regulatory changes to the broadcast infrastructure.

"Digital technologies are transforming the way New Zealanders live, work, and do business," Communications Minister Amy Adams said.

"To help reach our 2025 broadband target and to keep our economy growing, we need the right laws in place to make sure high quality and affordable communication services are available for consumers and businesses."

Chorus welcomed the changes, saying they would enable citizens to leverage the benefits of high-speed broadband.

"New Zealanders are known for being early adopters of new technology, and we're seeing that again with uptake of fibre broadband services. New Zealanders are leveraging better broadband to enhance their social wellbeing and business success as an essential utility -- much like electricity, water, and gas," said Chorus CEO Mark Ratcliffe.

"Today's announcement by the government effectively recognises broadband as the fourth utility."

Mobile provider Spark also applauded the government's decision, saying wholesalers must be regulated in order to provide a more level playing field.

"Wholesale lines charges make up about half the cost most New Zealanders pay for their broadband, so it's important we get these charges set right," said Spark general manager of Regulation, John Wesley-Smith.

"It's also important to ensure all levels of the industry have the appropriate regulatory settings to encourage continued investment in better technology and services."

Last week, the New Zealand Commerce Commission (ComCom) also announced the beginning of a review of the non-price terms of Chorus' unbundled bitstream access (UBA) service, examining whether the copper service will fulfil the medium-term needs of consumers.

"UBA is the most common wholesale input used by retail service providers to deliver fixed-line broadband services to their customers," the ComCom said in its paper.

"There are currently approximately 1.1 million UBA connections in New Zealand. The regulated UBA service is delivered over Chorus' fibre-to-the-node (FttN) network."

In December, the ComCom released its UBA final pricing determination, setting it NZ$50 million lower than that applied when Chorus separated itself from Telecom -- though NZ$120 million higher than the original pricing proposed by the ComCom.

Ratcliffe and chairman Patrick Strange attributed this pricing decision to the telco's sharp decline in its financial results. For the six months to December 2015, Chorus reported a net profit of NZ$33 million recorded -- plummeting by 48.4 percent from last year's NZ$64 million -- on revenue of NZ$479 million, down 9.1 percent.

As of December 31, Chorus had 1.223 million total broadband connections, consisting of 74,000 basic UBA services; 7,000 naked basic UBA; 763,000 enhanced UBA; 128,000 naked enhanced UBA; 94,000 VDSL; 45,000 naked VDSL; and 112,000 fibre services.

Chorus, along with local fibre companies Northpower Fibre, UltraFast Fibre, and Enable Networks, is rolling out the New Zealand government's fibre-to-the-premises UFB and Rural Broadband Initiative (RBI).

The UFB was originally planned to provide minimum speeds of 100Mbps up/50Mbps down to 75 percent of the population, but has since been increased to reach 80 percent of the population, while the RBI will provide download speeds of 50Mbps to the remaining 20 percent by 2020.

By comparison, Australia's National Broadband Network (NBN), which moved away from an all-fibre rollout following the Coalition's election at the end of 2013, is forecast to reach 100 percent of Australian premises by 2020, guaranteeing minimum speeds of 25Mbps down/5Mbps up.