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Spark, what are you thinking?

17 September 2020

Spark has stated in the media that it has "a goal of getting up to 40 per cent of its broadband customers on to wireless technology by 2023".

Seriously Spark?

What are you thinking?

Today, broadband internet is a far different thing to the broadband of just a year or two ago. Instead of email, a little web-browsing and perhaps the odd game or two, the application of broadband communications has shifted emphasis to things that are far heavier uses of bandwidth and data. Things like streaming video services.

While wireless broadband may have been a satisfactory option for the average internet user of yesterday, I doubt that there are many Netflix, Disney+ or Amazon Prime users who could survive on the meagre data-caps that Spark's wireless options provide.

Indeed, even my own YouTube consumption would blow that monthly data-cap away in less than a couple of short weeks.

Then there is the issue of the actual amount of bandwidth available at peak times, such as the evening, when families sit down to watch their favourite shows while kids spend hours in their bedrooms watching TikTok and YouTube.

If Spark thinks that it's going to be able to provide an effective and viable level of service to consumers using wireless broadband in the year 2023 then they're dreaming!

Based on my own observations, using a Skinny 4G wireless broadband modem and their pre-pay service, the infrastructure being used to provide this connectivity is already coming under heavy load at peak-use times. How it will cope if Spark really does manage to shift 40% of its customers to wireless one can only imagine.

Yes, 5G is coming and has the "potential" to significantly increase the amount of bandwidth on offer but is this really the best use of the service?

Are there not far better ways to deliver Netflix, Disney+, Amazon Prime and the growing number of other streaming VOD services to people's smart TVs and other devices?

Let's see... might we be better off using, say, fibre?

Of course fibre is a far better option -- so why is Spark focusing so strongly on wireless?

The answer, of course, is the quest for margin and profit.

As a provider of fibre-based broadband, Spark has no competitive advantage over any of its peers.

Since the government forced the split of the wholesale from the retail, Spark lost its control of "the network" to Chorus and has now been relegated to the role of "reseller" for fibre. With numerous other companies competing against them, pricing for fibre-based broadband is quite keen and that constrains margins and profits.

However, Spark still operates its own wireless 3G/4G network and the competition in this sector is far more limited. Those are the ingredients for much higher margins and profit -- hence the imperative to shift customers onto the wireless network.

I honestly believe that this focus on leveraging its wireless network to boost profits is extremely myopic and will ultimately hurt not only Spark but perhaps the whole industry.

How will Spark wireless broadband customers feel when they discover that Netflix is buffering from 6pm through to 10pm due to over-commitment of the limited bandwidth available?

How will Spark wireless broadband customers feel when they discover that they're blowing their data-cap with increasing regularity and that is significantly hiking the cost of the service?

The other negative aspect that Spark really needs to consider carefully is the effect that over-committing their 4G/5G bandwidth will have on the performance of their cellphone service. Could chasing the broadband dollars effectively kneecap the service they deliver to smartphone users?

And why on earth anyone would even consider going wireless if fibre is available at their address?

Well the answer is that Spark is already pushing people to choose wireless over fibre and huge swathes of the market will believe the sales-pitch they're given -- to their long-term cost.

In order to bring you an informed viewpoint, I now have a Spark wireless modem sitting here beside my desk and I'll be doing some benchmark comparisions with the fibre service so as to provide a "warts and all" review.

Stay tuned for that!

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