In the second part of Computerworld's Q and A interview with Telecom's executive lead on UFB and RBI, Mark Ratcliffe discusses the telco's controversial bid for the government's Rural Broadband Initiative. Telecom has partnered with Vodafone in a joint bid and is currently negotiating with the MED on rolling out a fixed line/wireless solution.
Shall we switch quickly to the RBI?
Yes, it is more exciting.
I think it is more exciting in that it is going a way to giving rural customers better services.
Yes, although they would claim and the Federated Farmers would claim that the services in six years time will be way behind what the urban customers are going to get. They’re going to be looking at 5Mbps; everybody else is going to be getting 100Mbps.
That’s an argument but I think you have to balance up the quality of life and the choices that you make around living in a rural area versus living in an urban area. There aren’t dairies on the corner. There’s a whole bunch of things that don’t exist in rural life that exist in suburban New Zealand.
The world is going fibre and the RBI over the next six years takes fibre further then it does today. It puts more cellphone towers in rural New Zealand that can provide broadband to people who don’t have it and this is a big step in the right direction.
Are you going to put XT equipment on those cell towers that Vodafone’s building?
I don’t know; my expectation is that Telecom would want to have the XT coverage being close to what Vodafone’s coverage would be and so Vodafone might be the one that’s making the initial commitment. I’m sure with competitive mobile networks you’ll see 2degrees there as well.
Competitive, that’s an interesting one. Why would you go with Vodafone when you could have done the whole solution yourselves?
We thought that was the best approach to doing it.
It demonstrates that we can work together, it is open access, it is rational.
It’s putting fibre to your competitor’s cell sites.
Vodafone are my biggest customer, they are not a competitor.
Your biggest customer as Chorus.
This is a Chorus/Vodafone proposal.
Is that why you fronted it and not Paul Reynolds?
I think the reason I fronted it then [at the press conference in November announcing the bid] was because Paul was out of the country. It is Chorus fibre and Vodafone mobile services and some DSL equipment as well. We saw this as the best way to get the most broadband to the most people for the money that was available. It is open access as it means that anybody can put their equipment on the towers, it means that anybody can put their equipment in the cabinets that we’re producing.
If we hadn’t done it with Vodafone you would have said this is just Telecom looking to retain its monopoly. Because that is what you would have said, it is Telecom wanting to do it on its own and being exclusive and then, because we’re doing it with them, it is a cosy duopoly.
I think I said it was two monopolies, do you think Vodafone dominates Auckland in the mobile market?
I think Vodafone has got the largest market share in Auckland, doesn’t necessarily mean the company dominates it, this just means it has been very successful. But everybody else is allowed to be a mobile provider.
Why didn’t you tell all this to the Federated Farmers meeting [22 February], why didn’t someone from Chorus go along and say this is our proposal?
Because we have already told everybody about the proposal, it is been through an evaluation process and our proposal was deemed to be the best one and we’re now in a commercial negotiation period with the MED. We didn’t have any additional news and we will happily go along and talk to everybody once we have got through the commercial process.
With the change to RBI, is Telecom still required to provide a voice service to rural customers via the copper lines as per the TSO? Does that obligation switch to ServiceTel, where does that obligation sit?
I think that is what is going to have to be sorted out in the legislation because the way the existing TSO works can’t hold through in a separated company. It was all designed around a copper world, therefore there needs to be obligations placed upon people who provide networks and people who provide services.
In New Zealand what we have got is general business regulation, then we have got telecommunication specific regulation, then we have got Telecom specific regulation. With Telecom disappearing off the face of the map obviously you have to address the telecom regulation and that means you’ve also got to address the telecommunications regulation. That I think is what the SOP is doing and the regulators will have to work out how they adjust the regulation to cope with the new world.
What about your career, would you like to be CEO of Chorus 2?
I have loved being leader of Chorus and it does sound like a fantastic opportunity. But this is about doing what is best for Telecom, personal ambition is secondary.
But yes, it would be cool to be part of building UFB.
This is the second part of the interview with Mark Ratcliffe, see also Telecom wants to close negotiations, demerge and get on with UFB build.