UFB opportunities in NZ business

It's been billed as the biggest change in New Zealand telecommunications for more than 50 years.

Heather Wright looks at some of the opportunities the UFB rollout presents for the reseller community.

From network upgrades, to cloud and videoconferencing opportunities and on to technologies as yet undeveloped or even thought of, ultrafast broadband opens up a world of opportunities for New Zealand consumers and businesses – and perhaps none more so than the reseller channel.

For while the channel will get all the benefits of using UFB, there's also a plethora of sales opportunities around technologies which are expected to take off along with UFB, not to mention getting networks up to speed for UFB.

Rohan McMahon, strategy director for Crown Fibre Holdings which is managing the Government's $1.5 billion investment in UFB infrastructure, says the channel needs to size up the opportunities for their customers and also for their own business and supply chain.

"If we just use it to download email at work or to watch YouTube videos faster at home, we're missing the opportunities," he says, noting that while download speeds are improved on UFB, it's the upload speeds, at a minimum of 12 times faster, and the committed information rate, at 60 times greater than the default copper offering – which offer the biggest improvements.

McMahon says at the end of June, 76,000 premises had access to UFB, with 1200 connections up and running. "And it's grown since then and is only accelerating.

He says the ICT sector in general will need to help guide businesses, from the largest enterprises through to the smallest home business, through the change procesas and provide guidance on how they can use UFB.

Meanwhile, Charlie Boyd, Orcon general manager of wholesale, says UFB will create opportunities simply by forcing people to think more about applications and making it harder to make money just from selling pipes and access.

Upgrade, upgrade, upgrade

McMahon says there are a number of key areas where he expects resellers to benefit early on, including upgrading network equipment.

"People need to think about the equipment they're using in the home and business. It has to be fit for purpose for UFB and that's where organisations from the likes of Orcon through to systems integrators can help out, putting in gateways or customer premise equipment.

He says homes and small businesses using Wi-Fi also present opportunities, with older routers not able to get the highest speeds and instead serving up an 'inadequate' speed.

"There's also the advisory opportunity there. If the kit is not fit for UFB, people get an inadequate experience and that's the last thing we want.

McMahon says firewalls have also presented some issues for early UFB customers with some not getting the service they expected because firewalls were speed limited. "So there's plenty of advisory work and we are certainly telling people to talk to their technology advisors or their IT service provider to help them. So we hope we will see latent demand there.

That's a view shared by Richard Wade, Cisco consulting systems architect, who says customers may require network infrastructure, including switching and routing, with increased performance in order to take advantage of the improved bandwidth, and may also want to introduce IPv6 capability to their networks as part of this refresh cycle. He says a security refresh may also be in order for many, with firewalls and other security appliances/applications needing to be upgraded in order to cope.

"Customers wishing to deploy BYOD architectures may require additional equipment or increased functionality in their security and IT systems in order to support the necessary policy enforcement functions. Successful deployment of BYOD should enable employees to work effectively whether at home, on the road, or in the workplace," Wade says.

Voice as cost justification

Most agree that VoIP and videoconferencing will be early winners and McMahon says videoconferencing specialist Asnet Technologies has already reported a 'mini boom' in conferencing linked to UFB, in recent months.

Patrick Kershaw, founding chief executive of One Fibre, which provides UFB and voice services to the commercial sector via Chorus, says as the UFB commercial market takes off there is a limited window of opportunity for wholesalers and resellers to tap into it, buying package deals that they can then offer to their own clients.

"With the bigger telcos coming into the IT services space, revenue streams [for resellers] is really being impacted, and they're looking for other solutions [to bolster revenue].

One Fibre offers both wholesale and channel-based offerings. Kershaw says on the wholesale side, resellers can package together the access with services they are offering.

"Typically the first step we're seeing is putting infrastructure in, then VoIP, and then we're seeing IT services layered on top – cloud and subsidiary services.

Kershaw agrees offerings like VoIP will be big drivers in the first couple of years. "This network is being built to replace the copper network. People often forget that it's scheduled to be decommissioned the same as is happening with television and happened with the old [CDMA] phone network.

"A lot will use voice as a cost justification tool.

Orcon's Boyd agrees, saying New Zealanders will be forced to 'get serious' about VoIP, and says resellers and wholesalers will be crating packages that include voice solutions – 'anything from business trunking products to more bundled offerings'. "That's going to appeal to IT integration organisations looking to bundle it in with other services.

Being able to provide multiple services, not just internet, is very powerful and UFB will be a catalyst for that.

But, that potential to bundle access with services is a double-edged sword for the traditional IT integrators and value added network providers who will increasingly find themselves competing against 'non-traditional' companies. "We're seeing different retail service providers, such as utilities, getting involved," Boyd says. "They're looking to UFB to be the catalyst for change for their customers. They're facing the same issues we all are of retaining customers and fighting churn.

Boyd says while the traditional players can view the entry of newcomers as a threat, it could also be an opportunity to partner with those organisations, who often lack the technical understanding and will need assistance. "It's a big step up from retail in another industry to retail in the IT industry and there will be a skills gap they'll need help with.

Cisco's Wade adds a likely boom in videoconferencing and collaboration will also spur opportunities for resellers. "Customers may want to introduce a combination of room-based, PC-based and mobile device-based collaboration tools in order to enable on –site and remote voice, video and document/data collaboration.

Refreshes of desktop systems with new voice and video communications are also likely as customers seek to enable high-definition voice and video communications.

Cloud adoption too, is likely to see improved uptake.

Says Boyd: "Everyone talks about cloud. The IT behind it is not new. But with UFB and affordable high speed to the customer, one of the barriers has gone away and that will stimulate the whole cloud market.

"Even if you're just in the game of providing components of cloud solutions, storage and so on, this will open up opportunities.

On the home front

Meanwhile, Malcolm Campbell, Enable general manager marketing and sales, says video services or television will be one of the big drivers on the consumer front, with international content providers not yet seen in New Zealand likely to make an appearance. That will drive the need for more technology, including hubs and routers, in the home. "As homes become more information rich that will drive the need for more technology.

Homes, he says will ultimately be built with infrastructure such as ethernet hubs and cables as standard.

Says Boyd: "It's not going to change overnight. The market will evolve." But it's an evolution that's ripe for the picking for the New Zealand channel.