The Auckland CBD will be flooded with new fibre-optic cable offerings in the first half of the year but users are being told not to expect an immediate price war.
“Our pricing is already very competitive in the Auckland CBD with just TelstraSaturn and Clear as competitors,” says Telecom spokesman Glen Sowry. But Sowry doesn’t rule out price changes in the future. “Time will tell what happens in the market,” he says.
While well served by wireless operators, Auckland has never been able to match Wellington’s extensive fibre network. Telecom, TelstraSaturn and Clear already operate independent fibre networks around the CBD but two Wellington-based companies, CityLink and utilities company United Networks, will roll out services in the near future. Questions about an oversupply of bandwidth in the short term are ruled out by all the companies.
“Fifteen years ago we said there was probably about 10% of the fibre we needed in the ground in Wellington," says CityLink managing director Neil de Wit. "Today we say exactly the same, so no — I don’t think you can ever have too much fibre.
De Wit says CityLink has cable in the ground in Auckland and "we’re constantly expanding our service in the Auckland CBD”. CityLink was convinced to move into the Auckland market by one of its major Wellington customers that wanted to extend its network north. “They have supported us in that move, yes,” says de Wit, who would not elaborate further on what support was offered.
"In a market that was bandwidth-constrained we're about to have a boom period," says United Networks strategic development manager David Stone. United Networks deals with service providers rather than end users. "Unlike our competitors, we do not compete with our customers." Stone says the company is not out to start a bandwidth war but will be able to compete on price if needs be.
If there’s one thing the fibre providers agree on it's that the battle for Auckland will be waged on service not raw bandwidth.
“It’s more about what happens at each end of the fibre than the fibre itself,” says TelstraSaturn spokesman Quentin Bright. “We will be the only company in the region to offer full services; by that I mean voice, data, mobile and cable TV. None of the others can compete with that.” TelstraSaturn also claims to be the only company with plans to roll a fibre hybrid out to residential customers and plans to reach out to the entire Auckland region within five years.
Telecom’s Sowry agrees that services will be the defining factor in the ensuing battle. “Products will need to be built around the services rather than raw bandwidth. We will be competitive on that score.”
Clear Communications spokeswoman Rochelle Lockley says Clear does not differentiate its pricing models based on regional variation, but does plan to offer a competitive service in the new market.