Fibre Broadband Shares

[Snoopy]

Does Vital fit into this group somewhere?

You mean 'Vital' in the sense of the entity that was the old 'Teamtalk' and 'Citylink'? Yes there is a 'fibre' component in what Vital owns. But it isn't part of the network funded by Crown Infrastructure Partners. The Vital network is a private network built where Vital wanted to build it. Their fibre networks are in downtown Auckland and Wellington. I am not a student of Vital, so I am prepared to be corrected on what comes next. But my impression is that Vital supplies intracompany fibre not intercompany fibre. This may include external lines linking different business units in different buildings. But generally a customer of Vital buys fibre for their own use rather than with an intention to sell utility to third parties (*). Vital is not unique in doing this. I think Spark have their own in house built fibre network, for example. But this is how I see Vital fitting into the picture.

As to whether Vital belongs on this thread: They operate a fibre business unit, so of course they do! Thanks for bringing the topic of 'Vital' up.

SNOOPY

(*) I think the downtown Vital Wellington Fibre Network, for example, can service more than one customer of Vital. But generally Vital is 'private network' that Vital manages for their own selected customers. There does not exist a right to join the Vital Network if Vital do not want you to join. There is no guaranteed network access price for allcomers as you might find with the Chorus network in Wellington, (as a comparison). I hope I explained that right. No doubt someone will emerge to correct the picture if I didn't!

[Snoopy]

The roll out of fibre broadband in New Zealand has been on a public/private partnership model. Details of the oversight regime can be found here:

https://www.crowninfrastructure.govt.nz/ufb/what/

From the above reference....

------------------

What is UFB?

Ultra Fast Broadband fibre provides a reliable, consistent experience even at the busiest time of day.

It delivers speeds in excess of 25 Megabits per second (Mbps), using optical fibre technology rather than the slower copper technology (ADSL or VDSL).

Not only does this make your online experience faster, it allows multiple people in your household or business to be online at the same time. You will experience faster download and upload speeds, more reliable connectivity, the speeds will be consistent and you won’t have to deal with buffering.

-------------------

This is a pretty good sales pitch for Fibre Broadband. But have a look at pages 19 and 20 in the FY2019 NBN Annual Report

https://www.nbnco.com.au/content/dam...eport_2019.pdf

I was particularly interested to read about 'G-fast' which is the latest evolution of VDSL technology.

"G.fast provides greater bandwidth and improved noise mitigation on the copper pair network, and is able to achieve speeds up to 1Gbps over the shorter copper distances in typical FTTC deployments. As G.fast can be deployed on existing copper networks, it is a viable alternative where fibre into the premises is too costly or difficult to deploy."

Yes you did read that right. 1Gbps over copper! 1 Gigabit is 1000 Megabits. So we are talking about a transfer speed forty times higher than the crown fibre broadband minimum performance target! Of course fibre can do 1Gbps as well, if appropriately set up. But I had been under the impression that copper was 'down and out' as data transmission conduit of the future, when this is not so - for the last little bit of delivery to the household anyway. While still experimental, the next generation of G-fast is even more impressive with speeds of 5Gbps over a line length of 70m. Perhaps copper isn't dead yet?

Next we learn more about potential upgrades to HFC (Hybrid Fibre Co-axial; the co-axial bit being copper). This is the network owned by Vodaphone that services customers in Wellington, Kapiti and Christchurch. Vodaphone inherited this network, installed lines which date back some 20 years, when it was acquired from TelstraCkear in 2012.

"Emerging HFC technologies like Full Duplex DOCSIS 3.1®, Extended Spectrum DOCSIS (ESD), and the recently announced DOCSIS 4.0® which may offer upgrade paths capable of delivering low latency services and 10Gbps download speeds (and beyond) into the future."

Reading Crown Infrastructure information here in NZ leaves the impression that HFC technology is a dead end. Yet here we are talking about download speeds over four hundred times faster than 'basic fibre'! Is this or is this not serious competition for 'fibre broadband' in Wellington, Kapiti and Christchurch?

SNOOPY

[Doug]

From the above reference....
Is this or is this not serious competition for 'fibre broadband' in Wellington, Kapiti and Christchurch?

SNOOPY

https://company.chorus.co.nz/first-c...d-service-live

Available right now!

[Snoopy]

https://company.chorus.co.nz/first-c...d-service-live

Available right now!

Thanks for that Doug. It looks like Orcon is the first retailer out of the blocks with 8Gbps. It comes at a price though:

https://www.orcon.net.nz/broadband/sign-up

Plan	Orcon Price
Fibre 100Mbps	$89.95/month
Fibre 950Mbps	$99.95/month
Hyperfibre 2000Mbps	$149.95/month
Hyperfibre 4000Mbps	$184.95/month
Hyperfibre 8000Mbps	$274.95/month

The accompanying table in the Chorus news release. cast an interesting light on the utility of such higher speeds

Plan	Time taken to download a 5GB Movie
Fibre 100Mbps	6min 40s
Fibre 950Mbps	42s
Hyperfibre 2000Mbps	20s
Hyperfibre 4000Mbps	10s
Hyperfibre 8000Mbps	5s

Maybe I am just lacking imagination. But I would have thought rustling up the family to watch a movie and get everyone settled on the sofa would take six minutes and forty seconds. I wonder what the potential take up of hyperfibre speeds is? Anyone out there signed up with such speeds? What do you do with such download power?

SNOOPY

[Snoopy]

The next three posts are going to read like a horror story, but here goes.

Earnings Per Share = Normalised Net Profit After Tax / No. of Shares on Issue at EOFY

FY2016: -$2,750m / 20,275m = -13.6cps
FY2017: -$4,224m / 27,465m = -15.4cps
FY2018: -$4,779m / 29,500m = -16.2cps
FY2019: -$4,878m / 29,500m = -16.5cps
FY2020: (-$5,237m + $80m + $150m)/ 29,500m = -17.0cps

Notes

1/ For FY2020 I have added back $80m of credits to internet retailers FY20 as NBN moved quickly to offer pricing relief for increased network capacity requirements attributed to bush fires and Covid-19. I have also added back financial assistance packages for $150 million, created in consultation with industry to help internet providers connect low income households with home schooling needs, support emergency and essential services, and assist small and medium businesses and residential customers facing financial hardship.

Discussion

Despite more capital being put into the company, and more capital continuing to be invested, the loss per share keeps increasing. The trend could not be worse.

Conclusion : Fail Test


SNOOPY

[Snoopy]

ROE = Normalised Net Profit After Tax / Shareholder Equity at End of Financial Year

FY2016: -$2,750m / $12,023m = -22.9%
FY2017: -$4,224m / $14,959m = - 28.2%
FY2018: -$4,779m / $12,212m = -39.1%
FY2019: -$4,878m / $7,337m = -66.4%
FY2020: -$5,007m / $2,100m = -238%


Discussion

All the returns on equity are negative, which is never a good sign. This dramatically worsening statistic is the result of $27.409 billion of accumulated losses since FY2009. Government supplied equity of $29.5 billion is almost exhausted, but fortunately the building of the core of the network is now over and revenue is rising. Will the inflection point be reached, or will the government have to bail NBN out? The answer is not relevant to the question being asked here.

Conclusion : Fail Test

SNOOPY

[Snoopy]

Net Profit Margin = Normalised NPAT / Revenue

FY2016: -$2,750m / $421m = -653%
FY2017: -$4,224m / $1,001m = -422%
FY2018: -$4,779m / $1,978m = -242%
FY2019: -$4,878m / $2,825m = -173%
FY2020: -$5,007m / $3,837m = -130%


Discussion

A negative profit margin is a loss, which is never a good sign. A negative margin of more than 100% means your loss is greater than all of your revenue. The technical term for this kind of loss is 'eye watering'. This has occurred for every year over the last five years. The net profit margin is improving as losses in relation to revenue reduce. But to be able to bank enough money on an ongoing basis to offset inflation, at some point a profit must be made. There is no sign of that here.

Conclusion : Fail Test



SNOOPY

[Snoopy]

Thanks for that Doug. It looks like Orcon is the first retailer out of the blocks with 8Gbps. It comes at a price though:

https://www.orcon.net.nz/broadband/sign-up

With Vocus a trans-tasman company, I thought it might be interesting to compare costs and plans between the Vocus owned retailers

Plan	Orcon Price	Dodo Price	iPrimus Price	'Aussie Broadband' Price
Fibre 100Mbps	$NZ89.95/month	$A85/month	$A90/month	$A99/month
Fibre 950Mbps	$NZ99.95/month			$A119/month
Hyperfibre 2000Mbps	$NZ149.95/month
Hyperfibre 4000Mbps	$NZ184.95/month
Hyperfibre 8000Mbps	$NZ274.95/month

Notes

1/ Prices quoted are standard without any limited time promotional offers.
2/ iPrimus offers a 'Home Superfast' plan for $115 per month. They say it is suitable for 8k streaming verses 4k streaming for their Premium service. However, no uprated access speed is guaranteed.
3/ Both Dodo and iPrimus say that their 100Mbps download speeds may fall to 92Mbps and 95Mbps respectively at peak times.
4/ 'Aussie Broadband' (not Vocus owned) Gigabit plan may only work at 600Mbps at peak times.

I can't find any reference to plans faster than 1Gbps available in Australia. I think 1Gbps was the maximum design speed it was conceived the NBN would operate at. But I guess that doesn't preclude faster speeds being available in certain areas?

http://tektel.com.au/wp-content/uplo...is-the-NBN.pdf

Summary (from Feb 2014)

"NBNCo proposes peak rates of up to 1 Gbps. The NBN Fibre to the Premises (FTTP) architecture is based on the GPON (Gigabit Passive Optical Network) standard, which provides 2.488 Gbps shared amongst 32 users. This supports the 1 Gbps NBNCo peak rates (downstream and upstream). XG-PON, the next version of the GPON standard, will provide 10 Gbps downstream, shared among 32 subscribers, allowing multi Gbps subscriber services. However, actual NBN data rates will be constrained by back haul and Connectivity Virtual Circuit capacity."

SNOOPY

[Cricketfan]

Maybe I am just lacking imagination. But I would have thought rustling up the family to watch a movie and get everyone settled on the sofa would take six minutes and forty seconds.

SNOOPY

Also most people stream movies, not download them first and then watch. I really don't see many people being able to make use of such high speeds at the moment. Maybe if everything was streaming at 4K and you had a busy household, you might use those higher speeds, but otherwise it'd be wasted for the majority.

[Snoopy]

Also most people stream movies, not download them first and then watch. I really don't see many people being able to make use of such high speeds at the moment. Maybe if everything was streaming at 4K and you had a busy household, you might use those higher speeds, but otherwise it'd be wasted for the majority.

The iPrimus broadband page suggests that 100Mbps is appropriate for '4k video streaming' (there is your Cricket, Crickrtfan), Multiple player on line gaming (that takes care of the teenagers) and video conferencing (there is your Covid-19 work insurance).

I remember when 'The Hobbit' came out in 2012 using, at the time, cutting edge video technology. I had to look up what that meant. I see it was filmed at 48fps (vs 30fps more common in the US at the time ) and at a 5k resolution (for the 3D effect). Provided it would not be broadcast in 3D, this sounds like 100Mbps could 'live stream' the Hobbit. My memory also says that this 'faster frame per second' technique was only appreciated by geeks and abandoned.

The 'Home Superfast' upgrade suggested that you could video stream 8k images and engage in multiple video conferences, with no hint of that being anywhere near 1Gbps transmission. I wonder if we are getting to the stage where increasing the amount of data being transmitted will overwhelm the human brain's ability to receive it? Thus the Ozzies, seemingly stuck at 1Gbps max, may have done enough?

SNOOPY