Stories by Tom Pullar-Strecker The Dominion Post

Telco cable lifespan extended

The life expectancy of the US$1.3 billion (NZ$1.7b) Southern Cross Cable connecting New Zealand, Australia and the United States has been extended by five years to 2025.
The Telecom half-owned joint venture that owns the 28,500km-long cable network said it was in good shape and its working life would probably be extended again, though it would continue to consider building a replacement.
Customers, which include all major telecommunications companies and internet providers, had wanted assurances they would still be able to use the cable when their contracts ended in 2020, the company said.
Sales director Ross Pfeffer said each leg of the cable would be able to carry 4.8 terabits of data after an upgrade in two or three years, seven times the total volume of communications traffic to and from Australia and New Zealand.
The cable's capacity could be more than doubled again later, meaning it would "unquestionably" be able to handle any growth in demand that resulted from Australia's A$43b (NZ$56b) project to lay fibre to 93 per cent of homes and businesses and the New Zealand government's $1.35b ultrafast broadband initiative, he said.
Pacific Fibre, a startup backed by high-profile businessmen Sam Morgan, Stephen Tindall and Rod Drury, and state-owned enterprise Kordia are pursuing plans to lay competing cables.

Telecom result helped by $27m compensation payment

Telecom met its earnings forecast for the year thanks to a compensation payment from an unnamed supplier, which masked an otherwise weak result.
The company posted an annual profit of $382 million, beating analysts' expectations by about $10 million to $20 million, but only after a $27 million gain from "resolutions and settlements" with the supplier.
There is likely to be speculation the payments were made by Alcatel-Lucent, and are compensation for problems with Telecom's XT network, which Alcatel-Lucent built.
In its annual results for the year to December 31 2009, filed last month, Alcatel-Lucent NZ noted that there had been compensation payments relating to "claims by a customer" about "components of a network supplied by Alcatel-Lucent New Zealand." These weren't expected to have a material effect on the New Zealand subsidiary's financial results, the filing noted.
Alcatel-Lucent's results also noted that the compensation claim was made on a no admission of liability basis.
Analysts had been expecting the latest Telecom results to show a profit of between $360 million and $370 million. The profit was 4.5 per cent down on last year's $400 million.
Telecom's share price slipped 3 cents to $2.07 in early trading.
Revenue fell 6.3 per cent to $5.27 billion, but Telecom's costs fell faster.
That meant earnings before interest, tax, depreciation and amortisation were down only 0.2 per cent at $1.76 billion, which chief executive Paul Reynolds said was a "great accomplishment".
The company had "halted the significant earnings decline of the previous two years," he said.
Telecom's mobile revenues increased less than half a per cent over the year to $826 million, despite the launch in May last year of its $574 million XT network.
Mr Reynolds said the growth rate had been affected by compensation payments made to XT customers, without which mobile revenues would have been up 4.5 per cent.
The number of customers on its XT network rose by 20 per cent to 712,000 over the three months to the end of June as customers switched across from its CDMA network which is due to be turned off in 2012.
Mr Reynolds said the market for broadband was "reaching saturation" with about 60 per cent of homes now on broadband, but it still saw some room for growth.
The company hopes to win a contract to partner with the Government in laying fibre-optic cable to three-quarters of homes and businesses.
Government investment vehicle Crown Fibre Holdings is due to make a recommendation in October on who the Government should partner with.
- Additional reporting by David Watson

Joyce declines to release UFB document

Communications Minister Steven Joyce says he is unable to release the Cabinet paper that sanctioned the Government's $1.35 billion ultrafast broadband investment initiative as some of the information it contains may be misconstrued to indicate bias on the part of the Government.
It is understood the Cabinet paper includes some information provided by Telecom about the viability of the flagship government initiative.
The Dominion Post requested the paper in September. The Office of the Ombudsmen is investigating whether to order its release.
Setting out his reasons for refusing to release the Cabinet paper, Mr Joyce told the Office of the Ombudsmen that doing so could prejudice negotiations over the UFB scheme.
"The paper includes detail of informal propositions and financial detail provided by potential partners for the initiative. Neither these propositions, nor the fact they had been asked for, is currently public information.
"Whereas this information was only requested of potential partners as illustrations for my Cabinet colleagues, there is a significant risk that its release may (incorrectly) indicate favouritism towards some potential partners."
He says the Cabinet paper also discusses some potential risks related to the initiative, the release of which could "undermine the Government's ability to maintain a strong negotiating position".
The Office of the Ombudsmen is investigating whether to order Mr Joyce to release a letter sent by Telecom chief executive Paul Reynolds in August last year that is believed to discuss Telecom's possible involvement in the UFB initiative.
Mr Joyce was advised by officials to respond to the letter by phone. Mr Joyce said records of what he said did not exist or could not be found.

Gen-i's RuralZone may apply for public funding

Gen-i is likely to apply for Government funding to help set up its RuralZone internet portal, which will provide a single, web-based repository for farmers to store and share farm data.
The Telecom subsidiary and its partners — TruTest, FarmHQ and Anzco Foods — may seek funding from the Agriculture and Forestry Ministry's Primary Growth Partnership scheme for RuralZone, Gen-i rural market manager David Walker says.

Crown Fibre moves to next phase

Crown Fibre Holdings has finished assessing bids from Telecom, members of the Regional Fibre Group and Canadian company Axia NetMedia.
The firms are bidding to partner with the Government in its ultrafast broadband initiative.
A spokesman says it may be two or three months before the Crown-owned company is able to make a further announcement. A trilateral process is now under way between the bidders, Crown Fibre and the Economic Development Ministry (MED), which is fielding questions on regulatory issues.
On the day that Telecom announced it was considering structural separation, Communications Minister Steven Joyce told The Dominion Post he would consider any request from Crown Fibre for a broader, multilateral discussion between the parties, but he was happy with the existing arrangement.
"Different scenarios with different partners have different potential regulatory impacts, so I think just having an all-in discussion wouldn't necessarily achieve anything, although obviously if [Crown Fibre] came to us and said they would like something, we would look at it," he said.
Some independent industry sources say there is a certain inevitability about the structural separation of Telecom and a deal between it and the Government. But the Regional Fibre Group is tipped to launch a new offensive to try to regain momentum for its bid.
Group chief executive Vaughan Baker says he has no concerns about the roles of, and demarcation between, Crown Fibre and MED. "We continue to put our best foot forward and trust Crown Fibre in their process."
However, Telecommunications Users Association chief executive Ernie Newman expressed unease that the selection process might be held up by a debate around the separation of Telecom.
He accused the company of "playing a game of brinksmanship" by maintaining that network arm Chorus was interested in building a national network and would not — for example — participate if it missed out on the Auckland network build.
"We certainly don't want to see a situation where the process is derailed or slowed while everybody waits for Telecom to catch up."
Telecom chief executive Paul Reynolds told analysts last month that Telecom could be split into two by August next year. Spokesman Mark Watts would not comment on speculation it is working on a formula that would allow Chorus to start work on the fibre roll-out before then, if it was chosen as the Government's partner.
Joyce envisaged the scheme would get under way by the end of the year. The initial focus would be on connecting schools.
Under Telecom's proposal, a separated Chorus would manage both Telecom's existing copper and fibre network and the fibre that would be laid as a result of the ultrafast broadband initiative.
The Government would acquire either a shareholding or an alternative financial instrument that would entitle it to a return from the $1.35 billion it would invest in the new infrastructure.
Joyce said the MED was keeping him informed on regulatory matters, and Crown Fibre "largely via MED, are keeping me informed on their progress and process, but certainly not in where they are at in their thinking".
The Government has made it clear that ministers will have the final say.
Crown Fibre chairman Simon Allen said in February that it intended to complete its assessment by the end of May and would then negotiate "final binding offers for recommendation to ministers during the third quarter". The spokesman says Crown Fibre is still running to its timetable.
The MED is taking a lead role on regulatory issues, working closely with Crown Fibre, the spokesperson says. "If any party wishes to raise regulatory issues, they are welcome to do this through the MED.
"Crown Fibre understands a number of parties have done so; these matters have been taken into account in the assessment process. Crown Fibre has the mandate to collect further information from interested parties and will do so at its discretion, " he says.
Vector chief executive Simon Mackenzie has said the Government would need to consider imposing a levy on fibre connections sold by Telecom, if Telecom was not involved in the initiative.

ChCh health IT vendor wins Australian deals

Christchurch software firm Emendo has won deals together worth between $5 million and $10m over three years, providing its CapPlan capacity planning software to hospitals in South and Western Australia.
Emendo co-founder Nick Burns says the contracts are its biggest to date, although it is chasing an even larger contract in Canada.
CapPlan is designed to help hospitals forecast how busy they will be and where bottlenecks may occur, helping them roster staff and allocate beds.
Data from major patient management systems can be automatically fed into the system, which analyses past trends and can adjust forecasts to take into account variables such as weather forecasts. "We have some clever algorithms that run over the data," Mr Burns says.
Some modules are designed to forecast workloads as far as 18 months ahead to help with budgeting, while others are designed to look just a few hours ahead.
"The core benefits are around aligning staffing to patient workloads," Mr Burns says. "Typically, hospitals have had to `flat roster' and what we allow them to do is manage for troughs and peaks."
Royal Adelaide Hospital and Sir Charles Gairdner Hospital in Perth have both been using CapPlan since 2007. In the latest deal, it will be adopted by another nine hospitals in the two states.
Mr Burns denies there is a risk that capacity planning could lead to fully occupied staff with no downtime to catch up with non-time-sensitive tasks.
"I would argue this is a fairer way, because it is not only about the troughs, it is about accounting for when it may go the other way. A significant amount of effort goes into understanding when peaks occur.
"Rather than have the same number of people who have to work harder, it can quantify what extra resources may be required. The idea is to smooth workloads."
Canterbury District Health Board business development manager Richard Hamilton last year estimated CapPlan had saved Christchurch Hospital more than $2m over four years during Christmas periods alone. It had also cut the average length of patients' stays by half a day, by making it more aware of what was going on in the hospital.
Emendo employs just under 40 staff and is hiring another five.
It is in the early stages of establishing an office in the United States, with the help of New Zealand Trade and Enterprise. "This year is about market research and getting our market entry right, but that is in our plan," Mr Burns says. "Like all the markets we are in, there is some emerging competition, but we believe from our research to date there is a massive gap."

Cellphone use on some NZ-bound planes permitted

Cellphones can now be used on a smattering of flights to and from New Zealand for the first time.
Telecom XT post-paid customers can use their mobiles on all Emirates planes and some Air Malaysia flights, including flights between Auckland and Brisbane, Melbourne and Kuala Lumpur and between Christchurch and Sydney, under a deal with the airlines.
Calls cost $13 a minute with a $1 a minute charge for incoming calls and an 80 cent charge for text messages.
Accessing the internet costs $40 a megabyte.
Passengers are billed by Telecom, rather than the airlines.
Coverage is provided by Norwegian-owned company AeroMobile.
It has installed mini cellsites on Emirates and Air Malaysia planes that connect to terrestrial networks via satellite.
Emirates became the first airline to commit to supporting mobiles on its entire fleet in 2006, when it agreed to invest US$27 million in the required equipment.
Having cellsites on the planes means phones can operate at a low power setting, which is designed to mitigate any safety concerns about interference with aircraft navigation systems.
However, mobiles are still banned when planes are flying under 6000 metres.
Telecom spokeswoman Lori Belmonte expected the service would appeal to business people.
"It will allow our customers to quickly check emails or make a few quick calls – it's just another way for them to stay in touch while travelling."
Air New Zealand has not announced any plans to allow mobiles to be used in planes or to provide any form of on-board internet access.
The airline did a survey of passengers in 2006.
Although Air New Zealand has never shared the results, it is believed they showed opposition to the use of cellphones.
Spokeswoman Tracy Mills says it "continues to keep a close watch on developments".