Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

What Spark thinks about its fixed wireless broadband

Last week Spark announced its first half results for the six months to December 31. It is a solid report showing strong revenue growth.

Spark looks to be heading on the right track. Yet there is an interesting angle on one of the company’s strategic moves.

Nine paragraphs into the market release there is this quote from CEO Jolie Hodson:

“We made a deliberate decision to limit wireless broadband sales in the lead up to the Rugby World Cup, as a conservative measure to ensure customers had a great viewing experience while we introduced our new streaming service. Our capacity was more than sufficient, so we expect this to be a one-off and connection growth to return to trend in the second half.”

In other words Spark back-pedalled on fixed wireless broadband sales because senior management didn’t want customers to have a disappointing Rugby World Cup streaming experience.

Fixed wireless alternative


Spark pushes fixed wireless broadband to its customers as an alternative to fibre. It’s a strategic move because Spark owns its wireless network. That means the company doesn’t pay a wholesale fee to a fibre company. It keeps all the money and that makes for a higher profit margin.

Investors love that.

Downplaying fixed wireless broadband in the run up to the Rugby World Cup made sense. Although fixed wireless broadband should be able to give customers enough bandwidth to watch high definition streaming video, that’s not always the case in practice.

Unlike fibre, which has consistent and predictable performance, fixed wireless broadband performance varies from place to place. In some cases it also varies at different times of the day.

Fixed wireless broadband bandwidth is shared. So if a lot of people connect at once, speeds can drop. The Rugby World Cup saw data traffic peak across the nation. That put pressure on more marginal fixed wireless broadband connections.

Good at times


Fixed wireless broadband can be good. I’ve heard from happy fixed wireless customers who enjoy decent speeds and uninterrupted connections.

There are others who say their service does not do an adequate job with streaming video.

One common complaint is that wireless broadband speeds are not consistent. In some cases speeds vary in a regular pattern over the course of a day. Others say they get intermittent slow downs.

Conservative on fixed wireless broadband


Spark describes the decision to back-pedal on selling fixed wireless as conservative. That may be the case. But it underlines that the company is not confident about its fixed wireless performance.

There was no conservatism about selling fibre broadband to customers in the run up to the Rugby World Cup.

The message is clear: Spark knows fixed wireless broadband is a lower quality product. It knows customers get a better experience on fibre.

That said, fixed wireless broadband is often an acceptable alternative for customers living in areas that are not served by fibre. It is the main technology for Rural Broadband Initiative customers.

Again, going by user anecdotes, some people who can’t get fibre find fixed wireless performs better than their local copper broadband service. Others do better with a fast copper connection.

SamKnows


This is all anecdotal. Yet there is some evidence in the Spring 2019 Measuring Broadband New Zealand report prepared for Commerce Commission by SamKnows.

Customers with a 100 mbps fibre plan saw average download speeds of 99mbps. During peak time the dial barely moved. Samknows reported peak speeds at 98.6 mbps.

With fixed wireless broadband the average speed is 25.8 mbps. At peak times this drops to 22.7 mbps. That’s not a huge drop, but it squares with the anecdotal evidence that some customers see big drops while others see little or no drop.

Fixed wireless broadband latency


The SamKnows data also looks at latency. This is the time it takes for data to do a round trip. If latency is high, online users of applications like video conferencing and gaming can expect stuttering and dropouts. SamKnows says 30 ms is high.

SamKnows found nine in ten fibre connections had latency below 20 ms. In comparison 95 precent of fixed wireless connections had latency of over 30 ms. The average latency is around 50 ms.

Of all the latency tests performed on Fibre connections, 92% were below 20ms. At the other end of the chart, 95% of Fixed Wireless latency results were above 30ms.

Dropouts


That’s past the point where dropouts start. With everyday TV streaming, buffering can shoulder some of that load. Even so, it is a worse customer experience.

SamKnows’ summary says:

“…many fixed wireless connections will experience issues with latency-sensitive applications such as video calls and gaming.”

VDSL2+ can deliver near fibre speeds and in some cases is consistent and reliable. Before fibre came down my road I had a Spark VDSL2+ connection that delivered a consistent speed of more than 70mbps.

In three years it never wavered. You can read about my fixed wireless experience in this post. The speed was never anything like as fast as the VDSL2+ connection.

Fibre most reliable


Of course VDSL2+ is not as good as fibre. In the report summary SamKnows says:
“Households with multiple user should consider fibre, if available, for the most reliable performance.”

Spark knows all of this. The reason it pushes fixed wireless broadband is that the margins are higher. That’s because there is no wholesale charge.

For many Spark customers fixed wireless broadband is the right product. But let’s not pretend it isn’t an inferior product to fibre. Spark is willing to let its investors know that.

Disclaimer: I edit The Download magazine for Chorus as a contractor. It covers the company, the telecommunications industry and fibre broadband. These are my views and not those of Chorus. 

What Spark thinks about its fixed wireless broadband was first posted at billbennett.co.nz.

© Scoop Media

 
 
 
Top Scoops Headlines

 

Gordon Campbell: On The Use Of Existing Drugs To Reduce The Effects Of Coronavirus

So now, we’re all getting up to speed with the travel bans, the rigorous handwashing and drying, the social distancing, and the avoidance of public transport wherever possible. Right. At a wider level…so far, the public health system has ... More>>

Gordon Campbell: On Oil Market And Regulation Crusades

Safe to say, Vladimir Putin did not expect the response he has received amidships from the Crown Prince of Saudi Arabia. Earlier, Russia chose to walk away from the OPEC talks in Vienna that were aimed at reaching an agreement on how to reduce world oil production (and protect oil prices) in the light of the fall in demand being caused by the coronavirus. No doubt, Russia and its allies in the US shale industry probably glimpsed an opportunity to undercut OPEC and seize some of its customers. Bad move. In reply, Saudi Arabia has smashed the oil market by hugely ramping up production, signing up customers and drastically cutting the oil price in a fashion designed to knock Russia and other oil suppliers right out of contention. More>>

Gordon Campbell: On 22 Short Takes About Super Tuesday

With obvious apologies to the Simpsons….Here’s my 22 short takes on the 14 Super Tuesday primaries that combined yesterday to produce a common narrative –Bernie Sanders NOT running away with the nomination, Joe Biden coming back from the dead, and the really, really rich guy proving to be really, really bad at politics. In the months ahead, it will be fascinating to see if the real Joe Biden can live up to the idea of Joe Biden that people voted for yesterday – namely, the wise old guy who can save the country from the political extremism of the right and the left... More>>

Binoy Kampmark: Strong Man Legacies: Burying Mubarak

Reviled strongmen of one era are often the celebrated ones of others. Citizens otherwise tormented find that replacements are poor, in some cases even crueller, than the original artefact. Such strongmen also serve as ideal alibis for rehabilitation ... More>>

Caitlin Johnstone: Humanity Is Making A Very Important Choice When It Comes To Assange

The propagandists have all gone dead silent on the WikiLeaks founder they previously were smearing with relentless viciousness, because they no longer have an argument. The facts are all in, and yes, it turns out the US government is certainly and undeniably working to exploit legal loopholes to imprison a journalist for exposing its war crimes. That is happening, and there is no justifying it... More>>

Gail Duncan: Reframing Welfare Report

Michael Joseph Savage, the architect of the 1938 Social Security Act, wouldn’t recognise today’s Social Security Act as having anything to do with the kind, cooperative, caring society he envisioned 80 years ago. Instead society in 2020 has been reduced ... More>>


Gordon Campbell: On The Addiction To Chinese Student Fees

Last week, Australian PM Scott Morrison extended its ban on foreign visitors from or passing through from mainland China – including Chinese students - for a third week. New Zealand has dutifully followed suit, with our travel ban ... More>>

 
 
 
 
 


 
 
 
  • PublicAddress
  • Pundit
  • Kiwiblog