Rural New Zealanders will get a choice of mobile network provider once the fibre-and-wireless broadband network covers the country. Better services should follow. Heather Wright reports
Once upon a time in the world of telecommunications, population coverage was considered a major competitive advantage. Each mobile network would market itself as covering the area where the largest percentage of New Zealanders ‘live, work and play’. One network even launched with an advertising campaign featuring a Hollywood stunt-woman sitting on a shipping container floating in the middle of the ocean while she talked on her mobile phone.
Now thanks to the Rural Connectivity Group (RCG), coverage is no longer a key differentiator in the telcos’ marketing playbook, at least not for the three mobile network owners (MNOs) Vodafone, Spark and 2degrees, who are equal shareholders in the RCG.
It’s this commitment to providing an equitable wholesale broadband service across New Zealand that attracted Andrew Button to the role of Executive Programme Director of the RCG. He has previously worked for Ericsson and Nokia Siemens and, just prior to joining the RCG, worked with application companies, Mobile Mentor and Blerter.
“As soon as I read about the intent (of the RCG) and the target audience – being a Taranaki guy and having spent lots of time in rural New Zealand – it immediately appealed to me. Doing something good for the community rather than something that is a business proposition is highly aspirational,” he says.
“With the Rural Connectivity Group, all three mobile network owners are turning around and saying it should be equal coverage for rural New Zealand, and the differentiator will be the services they provide on top of that network.”
What is the rcg?
The RCG was formed in 2017 as a response to the then National Government’s decision to extend the Rural Broadband Initiative (RBI) programme to 74,000 rural households, delivering a broadband service of around 20Mbps. In addition, the Government created the Mobile Black Spots Fund (MBSF), aimed at providing better mobile coverage on rural highways and at remote tourist locations.
The $225 million contract was signed in September 2017. The bulk of the money, $150 million, comes from three instalments of the Telecommunications Development Levy. This is an annual $50 million industry levy that is due to come to an end in 2019. There is also a $75 million contribution from RCG’s shareholders, as well as capital that is being provided direct from government agency Crown Infrastructure Partners (CIP).
In December 2018, the Coalition Government announced a further $40 million investment from the Provincial Growth Fund (PGF). This is overseen by Infrastructure Minister Shane Jones. The money will be added to the RBI2/MBSF expansion budget. This is to extend mobile broadband services to more households and bring total broadband coverage up to 99.8 percent of the New Zealand population.
While the RCG has the lion’s share of the contracts entered into by CIP, there is an additional $17.5 million in funding that has been awarded to 17 regional wireless service providers (collectively known as WISPs).
The RCG has undertaken to build a minimum of 400 new sites capable of delivering 4G mobile broadband. There is a stretch target of 454 sites to be built by the end of 2022. And there is an expansion programme that will see an extra 120-plus sites built by 31 December 2023.
There will be one Radio Access Network (RAN) unit at every site, which will deliver mobile and broadband services from each of the
three MNOs. From the user’s perspective, this means that regardless of whether you subscribe to 2degrees, Vodafone or Spark, you can use your mobile to make a call when you are in an area covered by the RCG.
For urban folk this might not seem like a big deal, but Button says being able to access all three networks will be a huge step forward for people living in rural and remote areas. “This provides choice for rural residents and workers, and it means rural service providers will remain connected regardless of which mobile network they are presently with.”
In addition to the MNOs’ RAN there will be space at each site for another operator to locate its equipment. This could be one of the WISPs or another entity such as the emergency services, Kordia or business telco, TeamTalk.
Conversely, it may be that the RCG decides to co-locate on a site owned by another organisation. “If the existing infrastructure is in a location that will satisfy our needs and the commercial offer is within the cost of us building our own, then absolutely we will co-locate on someone else’s equipment,” Button says.
Individual site costs vary from less than $100,000 to over $500,000 and depend on a range of factors such as the remoteness of the location, the cost of gaining resource consent and the availability of electricity. Even the wind can ratchet up the price, as Button explains. “We’ve got some sites that we are looking at in the Tararua district and its actually the wind loading that will drive the costs of those sites more than any other individual component.”
Then there are the backhaul costs (getting traffic from the rural sites to telecoms hubs). Satellite is the most expensive and delivers the least capacity, so is likely to be deployed for less than 10 percent of sites. Fibre will be used in up to 30 percent of sites and microwave radio technology for the remainder.
Button won’t comment on which technology partner the RCG is in talks with, but it’s probably safe to assume that Huawei is off the list given the Government’s current aversion to its presence in New Zealand. The telecommunications portfolio is now part of Minister Kris Faafoi’s remit, but Button says he works with the Government through CIP, which is also the entity responsible for the Ultra-Fast Broadband roll-out.
RCG employs up to 20 full-time staff (some are still being recruited). It boosts this core team with resources from its shareholding companies, the three MNOs. In addition, there are contractors who work on time-bound projects, such as the programme to integrate the RCG’s network with the three MNOs, and representatives from design and build partners Downer NZ, Connect 8 and Broadspectrum.
To date, the RCG has built three permanent sites – at Raurimu in the Ruapehu district, Kaihu in Northland and Lake Wahapo on the West Coast. All three currently provide 3G services from each MNO.
“All three mobile network owners are turning around and saying it should be equal coverage for rural New Zealand and the differentiator will be the service”
There are also four temporary sites located at Haast and along State Highway 6 on the West Coast of the South Island. One temporary tower, in the Haast township, is supported by three roadside sites. These were installed before Christmas to enable better safety on what can be a dangerous section of the state highway. The roadside sites were each built in a container with a pre-installed antenna, satellite dish and diesel generator.
Once permanent sites are built at Haast, the intention is for the container-sites to be deployed elsewhere. However, 3G connectivity will remain even after 4G is delivered, says Button, because VoLTE, which enables voice services over 4G, can’t be accessed by users with overseas SIM cards, so the company will have to run a 3G service as well. (VoLTE stands for Voice over Long Term Evolution and is the technology used by 4G wireless networks.)
When asked why there aren’t more sites established, given the RCG has been in operation for over a year, Button explains that as a start-up organisation it had to first establish ‘resource and process’ before specific site acquisition could begin.
“Site acquisition is not an instantaneous process – identifying the location you wish to build a site at, understanding the land-owners’ requirements, engaging with the local community, iwi and government agencies as appropriate, getting the lease approved and then getting the resource consent takes many months,” he says.
In addition, the process of integrating the RCG network with the MNO networks, which each have their own unique architecture, is a big piece of work that isn’t expected to be completed until mid-2019. The first permanent site delivering 4G connectivity can’t become fully operational until this work is done.
“We will end up with a period of time where we are building sites, and then a number of sites will all come online at the same time, once the MNO integration work is completed, and then the programme will flow logically from that point onwards,” Button says.
In January the RCG was ready to begin construction on 10 sites, with another batch to follow. It had lease approval for 54 sites, had gained 47 resource consents and was actively working on 283 sites of the 454 sites.
Button is confident that not only will the RBI2 be completed on time, it will come in ahead of schedule, a year earlier, in 2021, although he notes there will always be that “hard site” that takes longer to finish.
Even then, the relentless march of technology will likely mean changes are needed. By 2022, 5G is expected to be operational and there might even be a fourth mobile network.
Button says the latest evolution in mobile is part of their “future thinking”, but a new mobile network operator is not. “That doesn’t mean yes, that doesn’t mean no. I honestly haven’t considered that. That’s a question that would need to be answered by the shareholders – Vodafone, Spark and 2degrees.”
Dealing with the task at hand is probably enough to be getting on with. Button says the level of industry and technical collaboration is not only new for this country, it may even be a world first.
“Shared networks have been considered and implemented in many other countries, but shared networks across two technologies, across three network operators, for the geographical coverage we’re looking at in New Zealand? We think that’s actually unique.”
“The level of industry and technical collaboration [two technologies and three network operators] is not only new for this country, it may even be a world first”