Cable races along Auckland gas pipes

By ADAM GIFFORD

A network of 19th-century gas mains is giving UnitedNetworks the jump on competitors in the race to connect Auckland's central business district with fibre-optic cable.

The former Power New Zealand bought the standby mains last April from Christchurch network company Orion, which was selling the former Enerco gas networks in Auckland and Wellington.

After developing a telecommunications strategy, UnitedNetworks started running fibre cable in both cities in November.

Stage one, covering almost all significant buildings in the CBD and connected directly to the Southern Cross cable, will be in operation by February 22.

That means UnitedNetworks is going head-to-head with Vector subsidiary Tangent, which has upgraded the fibre network Mercury Energy laid alongside its underground power cables and is already selling bandwidth suitable for high-speed internet access.

The new entrants have to compete with incumbents Clear and Telecom, which have dropped prices to head off the upstarts.

Meanwhile, TelstraSaturn and CityLink are digging up Auckland's streets to lay their fibre in projects that will not be completed for at least a year, although some customers are being connected as cable reaches them.

Industry sources say trenching in the CBD can cost up to $300 a metre.

UnitedNetworks project manager David Stone said the old gas mains, including some stretches of 60cm cast-iron pipe, allowed his company to pull a cable up both sides of Queen St from Customs to Wellesley Sts in four days.

Because fibre cannot go round right angles, United has to dig up corners to put curves in the pipes.

Mr Stone said United did not receive full maps of the gas pipe networks until several weeks after the sale and "we were amazed at how extensive it was."

The company has budgeted $30 million over two years for laying fibre cable.

The switching equipment was provided by Nortel.

Mr Stone said United aimed to be a wholesale open-access bandwidth provider to telecommunications companies, internet services providers and other network providers.

The first customer, "a major telco," had already been signed.

UnitedNetworks' 216-fibre core ring has four hubs, on Queen, Albert, Fanshawe and Shortland Sts.

From the hubs come other rings, mainly 72-fibre cable. As technology expands the network will be able to handle "terabytes" of data.

Mr Stone said that until now New Zealand had been a bandwidth-constrained market, and the new challenge was to find applications to soak up the bandwidth on offer.

Tangent is using the fibre Vector uses to control its network, as well as benefiting from a longstanding policy by Mercury and Vector to lay ducts, with or without fibre, whenever they dig up roads for power cables.

Vector chief executive Patrick Strange said a report putting the project cost at $15 million was "a significant overestimate," and Tangent should pay for itself within a year.

General manager Jill Garing said Tangent would sell wholesale as well as retail to large-capacity customers, but she did not name any clients. The backbone equipment is from Cisco.

While UnitedNetworks and Tangent have pure fibre networks, TelstraSaturn is putting in a hybrid fibre-copper network, also using Nortel switches and backbone.

Tony Baird, TelstraSaturn network technology group director, said that as well as the CBD, its fibre was being run alongside the Auckland motorway system.

The budget for the broadband network in Auckland, Wellington and Christchurch, including an undersea link from Wellington, is $1.2 billion over five years.

CityLink, which started out cabling the Wellington CBD using the trolley bus network, is piggybacking on the TelstraSaturn excavation, an arrangement put together by the Auckland City Council, which wanted to minimise disruption from carriers digging up the roads.

CityLink general manager Neil de Wit said the first customer for its dark-fibre services would be connected this week.

Even with the time and expense involved in digging up roads to lay cable, Mr de Wit did not consider that UnitedNetworks and Tangent had a big jump on his company.

"We started [in fibre] five years ago. It's not what you put in the ground but what you do with it."

With the amount of bandwidth already available, late arrivals in the market could struggle to recoup their investment, particularly if they intend to reach into the suburbs using overhead cables, which in Auckland might mean a long struggle to gain resource consents.

In the absence of fibre, many businesses have turned to wireless solutions for their bandwidth solutions.

Paul Ryan, from Walker Wireless, said having large amounts of fibre in the ground should not affect the wireless market.

"We never saw ourselves as competitors. The cost equation for fibre makes no sense unless you need 100 Mb/sec bandwidth or more," he said.

"Our target market is small and medium enterprises and Soho (small office home office).

"Those companies are usually not in the CBD, and it's expensive to lay fibre to the kerb," said Mr Ryan.

"The new fibre is good news because we can connect our POPs (points of presence) with fibre a lot cheaper than before."

Links:

www.unitednetworks.co.nz

www.mercury.co.nz

www.vector-network.co.nz

www.citylink.co.nz

www.telstrasaturn.co.nz