New Zealand Broadband All Go

September 17, 2009

Despite some experts warning that the plan is under funded and real costs could escalate to as much as $5 billion, the New Zealand government announced on the 16th of September that it would proceed with the planned NZ$1.5 billion investment to build a national broadband network together with the private sector, while rejecting counterproposals by Telecom Corp. of New Zealand Limited and Vodafone New Zealand, a unit of Vodafone Group PLC.

The new network would be established through a new government company, Crown Fibre Holdings, that will be operational next month. The government will select 33 regional and national operational partners – to be known as Local Fibre Companies – that will build commercial, open access, dark fiber networks, with the goal of connecting 75% of homes within 10 years. Priority would be given during the first six years to connecting schools, hospitals, health service providers and homes in new sub-divisions.

The fibre networks would cover cities and towns that are projected to have the largest population by 2021. These now include the towns of Masterton, Levin and Kapiti. Queenstown and Greymouth, which would have been excluded under criteria the Government issued in March but which now qualify.

Communications Minister Stephen Joyce said he expects that Crown Fibre Holdings will receive proposals from the Local Fibre Companies by mid 2010 and that the final deal will allow investment in any number of the LFCs by any one entity or consortium..

A number of companies have already shown interest in the government’s broadband initiative and  “Now it’s time to get on with finding the right partners to build these networks.” Joyce says.

Telecom, New Zealand’s biggest telco by revenue and subscriber numbers stated that the government’s high-speed broadband plan appears to preclude its involvement.

“Telecom is disappointed the benefits of our national approach to going faster and further have been overlooked,” Telecom Chief Executive Paul Reynolds said in a statement.

Joyce said relative to indications from other potential partners, Telecom’s proposal covered fewer homes and businesses, only provided ducts and not the fiber itself, and did not clearly result in significant additional private sector expenditure above normal business levels.

Vodafone’s proposal to establish a cooperative fiber company with the country’s major telecom operators owning a quarter of the shares, was also rejected.

A Vodafone spokesperson said, however, it is positive the government is looking at working with private companies and “we now need to spend some time now looking at the details to decide if we’ll be able to be involved in some way.”

As in the draft outlined earlier this year, the final plan will not allow participation by telecom service retailers, suggesting Telecom would have to fully split its network company, Chorus, from its retail arm in order to participate.

On Wednesday Telecom noted that “in the context of Telecom’s undertakings on operational separation and associated investment, today’s announcement also raises the issue of the relevance of those undertakings.”

Telecom said it looked forward to further clarification on the regulatory, competitive and operational issues raised by the announcement and added that it remained open to discussion.

Telecom, through Chorus, is in the process of building a national NZ$1.3 billion fiber-to-the-node network.

Joyce said Telecom was welcome to become a potential partner if it can meet the tender criteria, and national proposals would be considered as well as regional ones.

“The government is also clear that potential partners who already own fiber assets can table options that involve those fiber assets being vended into any new fiber companies,” said Joyce.

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Three months ago the Federal Government announced plans to form a new company that, together with the private sector, will invest up to $43 billion over eight years to build a high speed broadband network.

The Government will be the majority shareholder, but it will sell down its interests within five years of the new network becoming operational, and the private sector can invest via cash or the contribution of assets.

The formal call for tenders for the first part of Australia’s Broadband Network (NBN) in Tasmania, was made last week by Tasmanian Premier David Bartlett and Federal Communications Minister Stephen Conroy, while they officially opened Basslink’s fibre optic cable across Bass Strait.

Senator Conroy says the Tasmanian leg of the rollout will deliver wholesale-only, open access broadband network services in the second quarter of 2010.

See http://m.nbr.co.nz/opinion/chris-keall/fibre-101-with-steven-joyce.html

Hybrid 1516 Enquiries

July 14, 2009

We are pleased to see the level of enquiry being received regarding our new development from both contractors and utility companies alike. It is very encouraging to see that the direction we are taking is supported, by both end customers (utility companies) and users of HDD (contractors).

Common questions and themes, along with our answers thus far have been:

Do we believe other manufacturers will follow suit with hybrid drills? Yes we do and it is evident already in other areas of construction equipment with the release of hybrid excavators etc.

What advantages are there for the contractor buying a Hybrid Drill? Operational drill benefits for the contractor will  include reduced fuel consumption and operating noise levels along with some control advances. However, we see the real benefit being the ability to tender based on a reduced carbon footprint which we see growing as a pre requistite almost daily now. Some countries may be slower to adopt the relevant environmental policies but there can be little doubt it is coming. We suggest that as a contractor your next HDD Rig buying decision has to be made with this in mind and with a view to future proofing your business.

Are there any utility companies already setting policy regarding work being carried out with hybrids? To date and to our knowledge there are not. We think that perhaps this will come but as yet, the technology and machine access is obviously not available to support such a policy. However we see clearly growing public and government pressure, world wide to move toward ‘green’ policies and no business should expect to be immune to these in the medium to long term. Certainly many large corporates have established environmental policies and as technology and access to machinery grows we expect to see these policies firm up around these issues.

Will having a hybrid drill get me more work now? Clearly without established environmental policies which call for use of the technology this is difficult to quantify in any way. We do however expect that utility companies and the like will in time provide recognition and a favourable weighting towards hybrid drill operators and their tenders.

We are pleased to now announce the basis of our new drill range development, which will see TerraMacs launch a Hybrid Horizontal Directional Drill range later this year.

The first new Hybrid Drill to be released will be a 66,723N (15,000 lbs) thrust and pullback machine with 2,170Nm
(1600 ft lbs) of torque, providing a number of key benefits including improved fuel economy, reduced emissions and lower noise levels.

The drills will use a combination of conventional diesel engines and electric motors to deliver the total machine output, normally requiring a much larger diesel engine.

The company is developing options with and without clutch between the diesel and electric motors, allowing machines with clutch to operate solely from the electric motor to position the drill on site and to stakedown and possibly to carry out smaller drill shots from a totally silent machine. For larger work where the electric motor output on its own is insufficient and for machines without clutch, the diesel engine will ramp up output as required in series with the electric motor as required to meet drilling needs. Whenever the total power draw permits, the diesel engine is left to idle or turnover at lower speed thus saving further on fuel and while tests are to be concluded, it is expected that fuel economy of at least between 35% and 40% will be achieved over conventional drills in the same size.

Whenever onboard battery levels start to drop below optimum, they are recharged from the electric motor, acting as an alternator and with battery levels automatically managed and maintained in this manner, substantially extended battery life is achieved. Control of systems interaction will all be automatic and require no operator intervention. TerraMacs is testing both Lithium Iron and Gell Cell batteries and may consider allowing customers to choose their preferred option.

Both motors will drive the hydraulic pump and drill circuit and with electric over oil controls and load sensing on the electric motor, hydraulic flow will be tuned to provide optimum flow and /or pressure to those machine functions requiring it.

The TerraMacs Hybrid drill will also provide other benefits as a result, such as a smaller size footprint and will use existing technologies developed by TerraMacs in its current range of product to provide what TerraMacs believes will be a world leading product.

Noise and emission reductions come from the use of a smaller diesel engine and the automated control of this, allowing it to idle or operate at lower speed than would normally be required with conventional drills.

Steven Joyce, this morning confirmed on television a delay of at least 2 months to the broadband plans. Mr Joyce stated that the government needed to take the extra time to review the proposals tabled by the various parties, including sligthly ‘left field’  proposals from Telecom and Vodafone. He confirmed that funds of $1.5b remain set in concrete for the 10 year project.

The New Zealand Government has received more than 100 submissions on its plan to spend up to $1.5 billion over the next 10 years, which will be topped up to $3 billion by private-sector investment, to run fibre to the doorsteps of schools, hospitals, businesses and private homes.
The Government today reported that it did not now expect a report back to Cabinet on the submissions and implementation details for another few weeks, a month after the original timeline set.
Telecom is to table two options with the Government: a national network of ducts available to all operators deploying fibre or extending its current fibre roll-out.
Telecom reports that both proposals will focus on connecting 2000 schools and all hospitals to the fibre network within two years of work starting, while the remaining 600 schools would be connected within the following six months.
Vodafone having initially supported the Government plan, has also now come up with its own version of how the broadband roll out should take place, suggesting that telcos and infrastructure companies club together to invest in a single, ultra-fast broadband network.
Meanwhile Electricty Lines companies and local fibre operators, including Vector, Northpower and WEL Networks, who all have existing infrastructure and expertise to support fibre roll out, have joined forces to form the Regional Fibre Group to support the Government plan.

New Drill Specification

June 20, 2009

We can now confirm our target power specifications for the first unit, in what will be a new range of directional drills:

Thrust & Pullback 66,723 N (15,000lbs)
Torque 2170 Nm (1600 ft lbs)

As we have eluded to in various media releases, this range will offer one very special feature which we are not yet able to divulge but which we feel sure will atrract strong interest.

New Drill Progress

June 5, 2009

Well, we are getting close to locking in the specification for the new drill before finally handing the challenge over to the design team.  Certainly all of us at TerraMacs are excited about the prospect of delivering something completely new to the industry and something which will perhaps be the next step in the evolution of the industry. A tall claim you may think but one we think we will measure up to.

At this stage, for obvious commercial reasons, we cannot divulge the nature of our new drill and there is also a lot of water to go under the bridge, so to speak but we are confident it will be worth the wait. We also have to confirm with our patent attorney, that we are clear of any preceding claims and that we can lodge our own patent to protect our own position going forward. Preliminary research suggests we are okay but those in the know, will understand the minefield of intellectual property.

Keep in touch and watch this space!

Paul

Vodafone has suggested a co-investment model for ultra fast broadband in New Zealand, saying it was not a secret plan as suggested by some. Its co-investment model involves multiple firms co-operating by investing in a Fibreco company, as outlined in the governments Investment Initiative Paper and in which the government could also invest.

Vodafone did not name potential shareholders but said that they would likely involve existing operators.

The government is due to appoint its Crown Fibre Investment Company in mid June, which in turn will appoint local Fibreco companies.