Saturn Communications

» see saturn.co.nz as it lived, on the wayback machine

~ the obituary ~

New Zealand in the early 1990s had one telephone company that owned the line to your house and one pay television company that owned the dish on your roof, and both of them priced accordingly. Kiwi Cable Limited was formed in 1994 on the Kapiti Coast, a strip of small towns north of Wellington, and started digging. The head end was a large satellite dish at Lindale Farm, with the electronics in the outbuildings, and the company ran a community television channel out of a working farm that was also a tourist stop.

The technology was hybrid fiber coaxial with twisted pair alongside it, which meant one trench could carry television and a dial tone, with a cable modem added on top of it later. That combination is the whole reason the company existed. Austar, an Australian pay television operator, bought it, moved the headquarters and planned an aggressive build, and the company became Saturn Communications. The economics were simple enough to write on a napkin: Telecom New Zealand's prices in the local telephone market and Sky's in pay television both sat far enough above the cost of production that a second wire could undercut them.

So Saturn built out from Kapiti into Lower Hutt and then Wellington, with Upper Hutt added last, and put a smaller head end in Christchurch fed over fiber from Seaview. It signed an interconnection agreement with Telecom and started selling residential phone service in Wellington, and it ran a studio at CentrePort producing a Saturn Sport channel. For a few years there were New Zealand streets where you could genuinely choose which company's cable came through your wall, which was not true anywhere else in the country and is still not true in most of it.

Telecom's answer was First Media, its own cable rollout, which it started and then scuttled. Its more effective answer was to discount telephone service specifically in the suburbs where Saturn had built, and only there.

~ the case file ~

~ who set it up ~

en.wikipedia credits the setup to Jack Matthews, an American expatriate who later chaired MediaWorks, in the same paragraph where it says Kiwi Cable was formed by a local entrepreneur. Both readings can stand if you take the first as the Saturn era and the second as the years when the trenching was happening on the Kapiti Coast. What is not in dispute is that the money after 1997 was Australian, and that Austar came to New Zealand for the arbitrage sitting between two monopolies.

~ the satellite service that never launched ~

After Telstra merged its New Zealand operation in during February 2000, the combined company was TelstraSaturn and it had a plan to go national without digging. Two transponders held by Television New Zealand would carry a direct-to-home satellite pay television service, with TVNZ keeping part of the capacity for its free-to-air channels. Launch was set for August 2001, with a rollout across the country over the following months.

At the beginning of August 2001, TelstraSaturn announced the service was on hold indefinitely. It never came back. Instead the company bought Clear Communications, turned toward telecommunications and away from television, cancelled the network expansion plans and signed a programming deal to carry Sky's channels rather than compete with them. A government change had put local loop unbundling on the table, and unbundling makes the case for laying your own copper a lot weaker.

~ what happened to the name ~

In December 2001 TelstraSaturn and Clear merged and the result was called TelstraClear. That is the month the Saturn name stopped meaning anything. The company it turned into served about 70,000 subscribers on its own cable network in Wellington and Christchurch plus the original Kapiti build, out of roughly 200,000 customers overall, most of the rest riding on resold Telecom services. Vodafone bought the whole thing from Telstra on 31 October 2012 for $840 million plus the $450 million sitting in TelstraClear's accounts.

The analog side of the cable was switched off around 2009. The coax itself stayed in service under Vodafone for another decade after that.

~ the second wire, from here ~

Turkey had cable television early and it had cable internet after that, and both of them were built by the state operator. Kablo TV went into Ankara and Istanbul apartment blocks in the 1990s, Kablonet arrived later, and at no point was any of it a competitor to the company that owned the phone line, because it was the same company. I spent the TTNet years assuming that was simply how a country gets wired.

Saturn is the counterexample, and it lasted seven years. That is roughly how long a second wire gets before the incumbent either buys it or outlasts it.

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