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New Zealand's Chorus proposes shared 5G network

Government-backed wholesale operator says there would be more 'effective outcomes' if operators shared 5G infrastructure.

Iain Morris

October 24, 2018

3 Min Read
New Zealand's Chorus proposes shared 5G network

BERLIN -- Broadband World Forum 2018 -- New Zealand's Chorus will urge government authorities to look at building 5G infrastructure that can be shared between the mobile operators providing services to customers.

Kate McKenzie, the operator's CEO, said there was a "strong argument" for sharing 5G network assets in a small country like New Zealand, which is home to about 4.8 million people.

"There are much more effective outcomes for the country if you build it once and encourage competition at the retail layer and share as much as you can," said McKenzie at this week's Broadband World Forum in Berlin. "That is what we'll be arguing for down the track."

Chorus is a government-backed operator that aims to cover 87% of the country with an all-fiber wholesale network by the end of 2022. It was created in 2011 when authorities carved up Telecom New Zealand, the former incumbent, into separate infrastructure and service companies in a process known as "structural separation." The infrastructure part became Chorus, while the retail and mobile networks businesses today operate under the Spark brand.

The use of shared fiber infrastructure to support 5G connectivity would naturally suit Chorus, which currently sells capacity on its network to as many as 90 retail companies across New Zealand. "What is the role of the network in 5G rollout? There is a lot of discussion but by the time you get to lots of small cells you also need lots of fiber," said McKenzie.

Operators are likely to need small cells in a 5G network because services will operate in higher spectrum bands than in today's 3G and 4G networks. Signals do not travel as far in these ranges, or penetrate buildings as effectively.

Service providers would then need access to fiber connections for the "backhaul" links between basestations and the core network. Authorities may be keen to avoid any costly duplication of infrastructure buildout in what would clearly be a challenge to the Chorus wholesale business.

However, operators might also position 5G as an alternative to fiber networks for residential broadband services. Chorus played down this threat in its most recent annual report, pointing out that "some operators have questioned the economic viability of 5G deployments in areas where a superior fiber service is already available."

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Chorus has now covered about 70% of the population with its all-fiber network and about 50% of customers have subscribed to services, according to McKenzie. "We're beating targets in terms of the take-up rates," she said. "The biggest challenge is dealing with demand."

The operator is relying on last-mile copper infrastructure to provide broadband services in areas where it remains uneconomical to extend fiber to customer premises. "We could maybe go to 90% but after that the cost skyrockets," said McKenzie. "There is a large price tag for the last 40,000 to 50,000 customers."

Richard Jones, the chief strategy officer for the German Institute for Intelligent Cities and Regions, and a former industry consultant, says about 80% of the all-fiber project costs during a rollout in Sweden went on connecting the hardest-to-reach 30% of the population.

Chorus has indicated that it does not expect to see any 5G deployments in New Zealand until 2020. "We see a complementary future with 5G, because fixed line infrastructure will also be needed for backhaul and power to base stations," says the company in its last annual report. "This may create new revenue opportunities for our business over time."

— Iain Morris, International Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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