If Telecom comes up with a timely plan to invest in the Next Generation Network they can avoid some of the more onerous requirements on their legacy network. That’s one of the carrots offered to the telco in the Operational Separation Determination released yesterday. (Of course, the stick is a dirty great $10 million fine if they don’t comply).
So what are Telecom’s NGN plans?
After the Minister’s announcement yesterday I interviewed Telecom Chief Operating Officer Technology and Enterprises Mark Ratcliffe by telephone to try to find out.
But it appears, from this conversation at least, that Telecom hasn’t any overriding NGN strategy – or at least not one that they’re going public with. Ratcliffe says the company currently installs fibre on a case-by-case basis and have no “committed programme” for FTTN.
“We put fibre – and have done for about 10 years – into all new subdivisions, in Greenfield sites where there is no fibre in there. We also use fibre extensively in urban environments to service business customers, but we have no plans to replace copper with fibre.”
I asked if the Determination had altered their expectation for when Telecom expect to switch the off the PSTN - the date when all services will be delivered via IP. But the most he could say was that the first batch of NEAX exchanges will be switched off in late 2008/2009. But just how many exchanges and where they are located is still “in the planning phase”.
“When we turn the last exchange in the country off could be quite a long time away. It could be 10 or 15 years away. But that doesn’t mean to say Telecom takes 10 or 15 years to turn it off (the PSTN). You tend to do this in the major metropolitan, densely populated areas first, where there’s more of a propensity for customers to take up newer services and where you can reuse equipment in other parts of the country.”
“It’s like you don’t simultaneously upgrade every road in the country, it’s just possible to do it economically. And you try and reuse things where you can. And where services are working perfectly adequately there’s no driver to change them.”
This appears to me to be a very laid-back approach for an incumbent telco’s chief engineer to adopt. In other countries they’re obsessed with their NGN rollout (just look across the Tasman at how it’s become a major election issue) but in New Zealand it appears to be in some kind of holding pattern.
In a UK TV interview last month ago the incoming Telecom CEO Paul Reynolds told the interviewer “I understand there are NGN plans and broadband plans and I’ll wait to examine those… exactly what the deployment is in New Zealand, what the right answer for New Zealand is, I don’t know yet.”
Reynolds is due to start work next week.