Australia - National Broadband Network - HFC Networks

Synopsis

The main cable network operators Telstra and Optus have both upgraded their cable networks with DOCSIS 3.0 technology. These upgrades can provide data from local shared nodes at up to 100Mb/s. Although network investments have helped enable the operators to meet consumer demand for faster broadband services, these upgrades are interim measures. HFC capabilities in Australia remain comparatively low, and there is considerable scope for Australian players to make additional improvements. In Europe, HFC networks commonly deliver data at up to 300MB/s, while trial networks can provide data at up to 400Mb/s.

The roll out of the National Broadband Network under the December 2013 strategic review has placed a greater emphasis on existing hybrid fibre coax plant being utilised within the national broadband infrastructure. In December 2014 the revised NBN agreement saw Telstra’s HFC network and elements of Optus’s HFC infrastructure deployed as part of the NBN, so reducing the overall cost of the NBN rollout. This is expected to reach some 3.6 million premises by June 2016, when NBN Co is scheduled to commercialise HFC services, following trials held in several areas of northern NSW and southern Queensland. The company expected to be able to incorporate DOCSIS3.1 technology within the NBN’s multi-technology mix from 2017. This aim found encouragement in January 2016 when CableLabs certified hardware from five vendors for DOCSIS3.1. Modems compatible with DOCSIS3.1 will be available to customers when services start later in 2016.

In markets across Europe as well as in North America the key driver for deploying DOCSIS3.1 is the wave of new broadband and video competitors. Telcos as well as new operators such as Google Fiber are deploying 1Gb/s services based on FttP, and this is prompting cablecos to accelerate their DOCSIS3.1 deployment plans.

The other main cable player is TransACT, operating a hybrid fibre coax network in Ballarat, Geelong and Mildura. Since the acquisition of TransACT by iiNet in late 2011, these networks have been integrated in the latter’s company’s overall infrastructure plans.

There were 996,000 cable broadband subscribers as of June 2015, compared 966,000 at the beginning of the year. This represents only 7.2% of the total broadband market in Australia. However, most of these subscribers are high-end users providing relatively high ARPU for the cablecos.

This report provides an overview of HFC networks, including the status of networks bring transferred to NBN Co by Telstra and Optus, as well as data on subscribers and market statistics, and background information on technologies including the development of the DOCSIS 3.1 standard.

Key developments:

CableLabs certification of vendor equipment for DOCSIS3.1 supporting NBN’s plans for DOCSIS3.1 roll out from 2017; ACCC considers access regulation on superfast broadband services; Optus HFC network could be unfit for purpose for incorporation within the NBN; HFC subscriber growth continues; NBN transition developments, fibre broadband subscriber base shows rapid rise; report update includes ABS data to June 2015, analysis of the NBN strategic review, recent market developments.

Companies mentioned in this report:

AUSTAR, Optus, FOXTEL, Telstra, Neighbourhood Cable, TransACT.

Table of Contents

  • 1. Synopsis
  • 2. Technology
    • 2.1 Hybrid Fibre Coax (HFC)
    • 2.2 The DOCSIS standard
    • 2.3 The next development for DOCSIS
    • 2.4 Can Cable Networks Deliver a Gigabit?
    • 2.5 HFC DOCSIS vs. fibre
  • 3. NBN - HFC Program
    • 3.1 Statistical overview
    • 3.2 Overall plan
    • 3.3 FttN and FTTB as infills for HFC
    • 3.4 Arris appointed supplier of the network
    • 3.5 Roll out plan
    • 3.6 HFC pilot in Queensland
  • 4. Market statistics and estimates
  • 5. Telstra
    • 5.1 Background information
    • 5.2 Network upgrades
  • 6. Optus
    • 6.1 Overview
    • 6.2 Network upgrades
  • 7. IiNet/TransACT
    • 7.1 Overview
  • 8. BES/e-wire
  • 9. Austar United Communications (AUSTAR)
  • 10. Industry analysis
    • 10.1 DOCSIS3.0 -v- DOCSIS 3.1 (Analysis)
    • 10.2 Do we need infrastructure-based competition?
    • 10.3 Moving on from the HFC of the past
    • 10.4 No long-term future in HFC cable broadband
    • 10.5 HFC incorporated in multi-technology NBN
    • 10.6 From HFC to Fibre-to-the-Premises (FttP)
    • 10.7 Open access policy
    • 10.8 Superfast Broadband Access Service (SBAS)
  • 11. Related reports
  • Table 1 – HFC Roll out 2016-2018
  • Table 2 - Weighted average cost per HFC premise (rounded nearest $100)
  • Table 3 – HFC cable broadband subscribers – 2012 - 2015
  • Table 4 – Cable broadband subscribers by major operator and annual change – 2002 - 2015
  • Table 5 – Cable subscribers versus other broadband technologies – 2009 - 2015
  • Table 6 – Optus financial data – 2011 - 2015
  • Table 7 – Optus financial data – 2011 – 2015
  • Table 8 – Optus financial data by sector – 2009 - 2015
  • Table 9 – Optus on-net broadband subscribers – 2009 - 2015
  • Chart 1 – Overview of cable broadband subscribers by operator and annual change – 2002 - 2015
  • Chart 2 – Overview of cable subscribers versus other broadband technologies – 2009 – 2015
  • Exhibit 1 – HFC network status

Focus Report profile

Technologies

Broadband Fixed
Broadcasting
Telecoms Infrastructure

Number of pages: 19

Status: Current

Last update: 22 March 2016
View update history

Analyst: Henry Lancaster

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