A guest blog from The Rural Connectivity Group - Vodafone, Spark and 2degrees, as part of the RBI2 bids blog series
This blog post is the third of a series and was written in response to InternetNZ's blog post: RBI2: Who wants to make a bang with the bucks
Vodafone, Spark and 2degrees normally slug it out on a daily basis to deliver hotter prices, better value and more services to New Zealanders. It’s a fiercely competitive arrangement that has worked out very well for Kiwis.
On some occasions, such as the mammoth industry efforts to restore connectivity and improve resiliency during the recent Kaikoura earthquakes, we work together to find a solution to a common challenge and leverage the collective strengths of the separate businesses towards a single cause. This joint RBI2 bid is one such occasion.
For many New Zealanders connectivity is better today than ever before. Today Kiwis get roughly twice as much value out of their mobile plans for around half the price they paid just four years ago. The value customers get from their broadband plans has also jumped significantly as things like on-demand video streaming services rise in popularity. Growth is expected to boom - Cisco predicts that mobile data use will grow six-fold and fixed-line data use will double in the next five years.
But for people living in the most remote and isolated parts of rural New Zealand, it’s not been so easy. There, the economics for delivery of mobile and broadband services haven’t stacked up. A long, skinny, rugged, undulating country, New Zealand has a very challenging terrain for the laying of fibre or the building of cell towers, and it is in rural areas with low population density that the underlying economics have been the most challenging, and in extreme cases, unviable. Until now.
The world is rapidly trending towards mobility. Increasingly, bridging the digital divide is not just about broadband. For many, mobile is a more critical need, allowing people to connect on the go with friends, family or business partners. It will allow farmers to do their business ‘on-the-job’ during farming hours rather waiting until they get home.
This, combined with the dramatic improvements that are occurring in mobile and wireless technologies, is the background that led to the creation of The Rural Connectivity Group (RCG).
Mobile and wireless broadband technologies have come a long way in the last seven years since the RBI fund was first used to help solve coverage in rural New Zealand. Already, wireless broadband networks are providing higher average speeds than the ADSL copper network. And, more importantly, for customers it rates highly for the overall experience of the service – it’s easy to use and install, reliable, and performs very well.
It’s also well suited for rural New Zealand. This bid pools the three company’s spectrum, giving rural areas of New Zealand unprecedented access to more than enough spectrum to to manage network capacity and ensure a consistent and fantastic service experience for rural broadband and mobile users as demand grows.
Globally, wireless and mobile technologies now attract significantly more research and development investment than other network technology types. As a consequence, their performance will continue to rapidly improve, as we move from a 3G world at the time of the first RBI, to 4G and 4.5G today, to 5G well within the next decade.
As ubiquitous wireless connectivity continues to expand, the real benefits of machine to machine, Internet of Things, robotics and artificial intelligence can start to be unlocked for the rural sector. As an example, it is estimated that the Internet of Things will account for 70% of all networked devices by 2020.
The opportunity is now. Assuming the significant infrastructure costs are shared between the three biggest players in the market alongside the RBI2 funding from Government, the Rural Connectivity Group can provide ultra-fast broadband and world class 4G mobile infrastructure to remote areas of New Zealand that today have neither.
We think this is a once in a generation “2 for 1” opportunity that would see Vodafone, Spark and 2degrees invest hundreds of millions of additional dollars into better rural connectivity to build, maintain and operate up to 520 new cell sites around New Zealand, delivering fast wireless broadband and 4G (one day 5G) mobile services.
It’s an elegant way of getting the maximum bang for buck and delivering effectively two networks at a time when the economics make it challenging for a single player to deliver just one. It’s a way of leveraging the global partnerships, rural relationships and collective strength of the three largest market players that cannot be matched by a fixed network or by small, locally based wireless service providers on their own.
The RCG will ensure the new infrastructure is open-access and on a durable upgrade path, to foster greater retail competition amongst ourselves and other market players, and to help rural consumers get the benefit of the improved products, services and innovations that competition will deliver. And it will easily meet all of the Government’s 2025 aspirations for New Zealand connectivity, with 99% of New Zealanders having access to broadband of at least 50 Mbps and 100% of New Zealanders having access to broadband of at least 10 Mbps.
But it’s not just about the future, the benefits of the RCG proposal would be felt immediately. It would mean a competitive retail market in RBI areas from day one. It would mean instant, plug-and-play installation of high-speed wireless broadband into the home to help kids keep up with online and digital education straight away. It would mean enabling better mobile and digital technology solutions to meet our environmental and predator-free aspirations. It would mean making it easier for international tourists to immediately share their national park experiences with family and friends back home.
Mobile coverage will provide safer and more connected communities, better emergency service support, and allow emerging technology applications to be applied whenever and wherever needed. The new reality is that newer mobile technologies are superior to legacy fixed technologies, and the only solution that will make connectivity viable where rural New Zealanders need it most.
No other bid can deliver this comprehensive package of rural and tourism benefits. It’s only possible because of the unique circumstances of RBI2, where three competitors can use their proven strengths as part of a public private partnership model to connect more of rural New Zealand to the technology future.