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Symbio rolling out NZ wholesale voice network

MNF-owned Symbio Networks is building a nationwide wholesale voice network to be used by low-cost OTT providers.

IP voice communications provider Symbio Networks has announced that it is constructing a nationwide voice network in New Zealand, which it will wholesale to service operators and over-the-top (OTT) providers.

Owned by Australian retail and wholesale voice-over-IP (VoIP) provider MNF, which rebranded from its previous name of MyNetFone late last year, Symbio has provided number-hosting and call-termination services in New Zealand since 2008.

MNF itself signalled plans to expand across the country when it bought New Zealand telco Spark's international voice business, TNZI, for NZ$22.4 million in April last year.

"With MNF Group's recent acquisition of TNZI and its focus on investment in infrastructure, the time is now right to step up our activities in New Zealand in order to offer service providers and OTT players a next-generation wholesale provider," said MNF CCO Jon Cleaver.

According to Cleaver, MNF had identified a gap in the market left by New Zealand's bigger telcos, which are choosing to occupy themselves with growing their own retail networks rather than developing the wholesale layer to lease off to the many low-cost OTT operators that are entering the market.

"That's where Symbio fits in: Symbio's solutions are modular and scalable, with the flexibility to accommodate specialised service providers' needs, bringing enhanced innovation and product choice to the New Zealand wholesale voice market," Cleaver said.

Allowing more entry points for OTT providers will increase competition and innovation in the sector, Cleaver added. This is particularly so with the transition from voice to data, meaning customers are downgrading their voice services to cheaper offerings.

MNF last month reported its financial results for the first half of FY16, announcing a net profit of AU$4 million on revenue of AU$83.98 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$8.2 million.

Its profit was up by 29 percent year on year, while revenue jumped by 177 percent and EBITDA by 64 percent. MNF attributed its growth to the contribution of TNZI to the business.

The newly merged Vocus-M2 entity -- now the third-largest telecommunications provider in New Zealand, worth AU$3 billion -- is also a competitor in the provision of wholesale VoIP in the country, while traditional retail voice services are continuing to decline, as experienced by incumbent provider Spark.

While Spark reported net earnings of NZ$158 million for the six months to December 2015, up 7.5 percent year on year, revenue from voice services fell, reflecting the trend in customers shifting from voice to data-based services. Spark experienced a NZ$50 million or 12.9 percent drop in voice for the half year, down to NZ$337 million.

Spark's broadband services grew by 4.6 percent, while mobile increased by 11.7 percent.

To cover the increasing reliance on data-based services, the federal government's Ultra-Fast Broadband (UFB) network is being rolled out across New Zealand by Chorus, and has now been completed in 24 areas.

"We are almost halfway through the UFB rollout, and continue to activate our planned network areas on schedule," Chorus said last month.

"Build work had been finished for about 400,000 premises across our UFB areas at 31 December, meaning approximately 539,000 consumers could connect to our ultra-fast broadband."

Chorus spent NZ$90 million on rolling out the UFB during the six months to December 2015, with cost per premises passed sitting at NZ$1,643.

The UFB will reach 80 percent of the population, with the remaining 20 percent set to be connected to wireless mobile broadband under the Rural Broadband Initiative (RBI), which will provide download speeds of 50Mbps by 2020.

By the end of calendar 2019, 97.8 percent of the NZ population will be covered by either the UFB or the RBI.

Chorus said the RBI should be completed in June 2016, with total capex spend forecast to be between NZ$280 million and NZ$295 million.

"Demand for fibre continues to be extremely high, and addressing these challenges remains mine and Chorus' number one priority," Chorus CEO Mark Ratcliffe said in December last year.

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 just 25Mbps down/5Mbps up.

The NBN proposes to cover 20 percent of the population with fibre to the premises; 38 percent with fibre to the node (FttN) and fibre to the building; 34 percent with hybrid fibre-coaxial (HFC); 5 percent with fixed wireless; and 3 percent with satellite services.

The NBN has faced delays and doubts due to its decision to abandon all-fibre connections, with a leak last November revealing that Optus' HFC network is "not fully fit for purpose", with 470,000 premises in the footprint needing to be overbuilt by either Telstra HFC or fibre services; another leaked document in December divulging that the cost to replace or repair the legacy copper network would amount to AU$641 million; and a leak earlier this week claiming that the FttN network is seriously delayed and costing more to connect each premises.

NBN has denied that its network will be delivered late or cost more than the peak funding projection of between AU$46 billion and AU$56 billion announced last year.