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Infrastructure, or Applications, or BOTH?

01 Dec 10

Change is all around us – not only is there the huge debate about fibre, urban and rural; there is the reshaping of the industry structure, the dis-aggregation of the vertically integrated technology stack, and then there is the increasing presence of advanced broadband applications.
Some would argue that the investment in fibre is critical and the most important, while others simply seek open, affordable, capable broadband products and service to enable the delivery of applications, new and old.
Should investment be made in infrastructure or applications?
If the truth was to be known, the answer is both. To advance the way we work, live and play we need new applications and services, and a range of service providers innovating on an open new infrastructure foundation that offers no limitations. It was a bold move by the Christchurch City Council to kick-start the building of an open fibre network in 2007 – let alone own and manage it on behalf of the community. But it sure is paying dividends, despite plenty of doubters suggesting there was no need for such an investment. I can’t help but think that our recognition in the top 10 of the Deloitte Fast 50 Index this year, with revenue growth of 566%, is more than justification of the decision to invest in fibre.
So do the economics work?
This has been the subject of much debate in New Zealand with our small population base. What is clear to us is that there is significant latent demand for open affordable broadband services that can serve the business, education, health and government sectors. This demand is driven by the increased presence of service providers across the IT&T industry delivering products and services that were not possible in the past, and at a price point that is affordable.
To this point, we have over 30 service providers and many customers directly innovating over our network. Our business has been NPAT positive since year two and customer growth has out-stripped our expectations every year. This year is no exception.
With over 280km of fibre in the ground we have now passed the doors of 75% of local businesses. That figure will lift again in 2011, to around 85%, and hundreds have connected to our network.
We set out three years ago to establish a competitive broadband market in Christchurch and we led with a world-class, open-access fibre network that would enable local schools, healthcare facilities and businesses to transform their businesses while also creating an incubator for other entities to hatch from. With the new fibre platform now in place, the applications/services and service providers are now coming.
We now have over 50 schools connected to our fibre network, with plenty more lined up to connect. They now have access to a wider range of educational, professional development, administration and IT&T services at an affordable price. And more importantly, they have a choice of service providers to provide these services. Our children will be the beneficiaries and they are our future – the ones who will truly maximise a globally connected fibre world in decades to come.
Health is a biggie too, and that’s why we’ve worked closely with health providers throughout Christchurch to provide ultra-fast fibre connectivity, leading to efficiencies for health providers and patients as well as much- needed cost reduction for the health sector.
Within a matter of months we will have almost every major health provider connected to our fibre – Christchurch Radiology and Canterbury District Health Board, Nurse Maude, Medlab, St John, Pegasus Health and Southern Cross to name a few. We have provided the foundation, once again, for one of the most thoroughly connected health regions in the country.
Since our fibre expansion gained traction, numerous data centres have been established in the city on the back of affordable bandwidth. One of the latest start-up ventures in the city is Virtual Bridge, which is basing its virtual server business model around the availability of affordable Co-Location facilities, and fast bandwidth – something that was simply not possible on a copper network.
Some clients with exceedingly high data transfer needs are buying dark fibre and lighting it themselves so they don’t have to contend with data cap restrictions or cost blowouts from exceeding ‘plan specific’ data limits. One of the most surprising learnings for us is how little even the largest business knew about the potential of open access fibre and Ethernet products. CIOs and IT managers had been conditioned to a certain way of thinking that required solutions to operating with little bandwidth. The true potential of what business models will evolve and how business IT architecture can change is still on the early part of the exponential growth curve.
But our time spent educating service providers and end-users about the possibilities of high and unlimited bandwidth is paying dividends. Whether it is data storage, server virtualisation, co-location, full outsourcing or web hosting, it is clear that fibre is making a difference because it is providing businesses with remote high bandwidth applications without sacrificing performance.
Affordable ultra-fast fibre access is a key catalyst for cloud computing. While there are many definitions of cloud computing, the hard facts are that if a business has access to high speeds, typically 100Mbit/s or faster, you can locate almost any application in the cloud and depending on where your cloud is, the performance will be outstanding.
All of our business systems and applications live in the cloud somewhere; we have no servers or applications on site, just a single fibre connection – well two actually. This not only reduces business risk, but also IT costs due to economies of scale, while opening up new options for working anywhere.
An open access Fibre/Ethernet network is the key, as it allows all customers to leverage off infrastructure that is becoming a core asset within our communities – just like roads, electricity and running water have been for over a century. Having set out with a goal of transforming Christchurch’s broadband capability to enhance business, educational and community growth, it’s fair to say we’re exceptionally pleased with the progress we have made so far.
And it is pleasing to see similar progress amongst NZRFG members throughout New Zealand as they push on with fibre network builds in their respective communities.
In years to come, people will take fibre for granted just as we all do electricity. That day can’t come soon enough.  

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