There were a few disappointed network companies around New Zealand this week as the government handed the rest of the UFB contracts to the incumbent telco.

The ‘wire’ may look a bit different, but for the NZ electricity network companies who were bidding to become Local Fibre Companies (LFC), the business model, and operational priorities would have been remarkably similar to their existing modus operandi.

Installing and maintaining a supply network, managing relationships with the multiple retailers on their network, efficiently billing for the use of that network and navigating a shifting regulatory environment. These have been the challenges faced by every network company since deregulation in the 1990s.  

That experience, along with the opportunity to develop a new network free from legacy constraints, meant that electricity distribution companies were in a very strong position to deliver and manage the UFB network.

On a more positive note, the telco didn’t get the nod in all regions.

For the few network companies whose bids were successful, there will be, of course, new challenges - and not just in the laying and maintenance of fibre and its associated hardware.

There may be several Service Providers (SP) supplying each home – ISP, phone, TV and in some areas mobile over broadband. Each LFC will need to understand and track who is providing which service, know how much bandwidth is available, what bandwidth has been committed – and bill the SP accordingly.

But hardware and content aside, it all sounds very familiar.

A government keen to see competition of services means switching needs to be easy, quick and error free. A distributor facing regulatory pricing caps and tight margins will depend on high levels of automation to keep costs down. And an industry facing considerable media and tax payer scrutiny will need to deliver outstanding customer service and value for money.

Those electricity distributors involved in the new UFB market have been through this all before. But this time they have the benefit of hindsight.

They know that investing up front, in the right back office systems will make their journey to becoming a fully operational LFC a whole lot easier.

Having CRM functionality now means customer details and household information can be captured as the roll out progresses, even linked to hardware as it’s deployed.

Opting for a billing engine with flexible tariff handling will make things simpler, not harder to manage, as new ISPs or other service providers come on-board. 

Integrate these with middleware tools to automate data exchange between market participants, and you cut out the need for manual switching - keeping costs down, minimising mistakes out and keeping the regulator off everyone’s backs.

The government expects fibre to deliver big economic benefits for New Zealand – “enhanced productivity, improved global connectivity, and enhanced capacity for innovation”. With an estimated cost of NZ$3 billion, let’s hope our disappointment with this recent decision and intended deployment timeframes is misplaced.