The new Rudd Government has put a four person strong ministerial NBN team together to sell the project to the voters and to challenge the Opposition on their ‘cheaper’ NBN version. The good thing however is that whoever wins the next election the NBN is safe and will continue. If the Coalition wins there will be changes but so far it is not known what exactly they are going to change and what changes are still possible. This report provides the very latest update on all the developments surrounding the NBN. As BuddeComm has been involved in the NBN from its inception we are in a unique position to provide you with the insights of this large scale project, the largest of its kind in the world.
It provides a range of analyses on all the aspects of the project. It also offers a wealth of information on infrastructure rollouts; contracts; wholesale and retail arrangements; legislative and regulatory issues; an overview of key players and stakeholders; the e-government, e-health and e-education sectors.
The report analyses the issues surrounding the growth of such services and includes global overviews. Comprehensive information is provided on the roll-out and on the exciting digital economy developments taking place at a regional level.
Subjects covered include:
The NBN as its stands in mid 2013
The latest data on the FttH roll-out and the plans going forward
Government policies and regulations
Full analysis of the Opposition’s position
Wholesale, competition, pricing and products
NBN Co, infrastructure plans and updates on the latest contracts
The developments surrounding the fixed wireless and satellite roll outs
Industry in transition – both from the perspective of Telstra and the rest of the industry
The opportunities for councils and communities to capitalise on the social and economic benefits
Market forecasts 2015, 2020
The all important digital economy that will be built on top of the NBN.
Researcher:- Paul Budde Current publication date:- July 2013 (6th Edition)
NBN secured – but uncertainty about possible changes
By mid-2013 NBN Co indicated that its rollout plan was now slightly above target. This bodes well for a rapid rollout of the network, to reach close to four million connections by 2015. With all the major foundations now in place it should be reasonably plain sailing from here.
The ACCC has laid down its wholesale conditions for the transitional period and it is in this area that further tension has developed, especially at the point when the copper services are actually being cut off and all the customers are being transferred to the FttH network. Also, more detailed information is becoming available from the Coalition and, while there remain strong areas of disagreement, the reality is that, despite the possibility of a change of government in late 2013, the NBN is here to stay. While the departure of the NBN’s key architect - the former Minister Conroy will be disruptive – he has nurtured the project to a level that there is now any back anymore.
A serious omission on the part of the Coalition is that by mid-2013 there was no policy or information from them on the importance of the digital economy, the need for digital productivity, and on policies in relation to e-business, e-health and e-education – and if and where their NBN policy fits in all of this.
The Opposition certainly has some valid points of criticism, which we share. There is still a misalignment between the social and economic benefits of the NBN and NBN Co’s business plan. The Opposition also wants to prioritise the underserved areas and is looking at other technologies to create some earlier wins. The question, however, is how much can be changed at this late stage – and also if this really will lower costs and speed up the rollout.
Australia is highly reliant on its income from natural resources and like other resource-rich countries it needs to diversify its economy. Interestingly, it is these resource-rich countries that are leading the rollout of FttH around the world. The main reason for those governments becoming involved in digital infrastructure is to increase their country’s competitiveness and productivity in areas other than resources.
The first retail prices are very promising. Entry level charges are most competitive and will assist in a reasonably easy transition from the old networks to the NBN.
The Australian telecommunications market will change dramatically over the next ten years. Accelerated by government policies in relation to broadband infrastructure and the National Digital Economy Strategy these changes will drive the transformation of the industry.
This will be further accelerated by developments such as cloud computing, M2M and big data. The over-the-top (OTT) players are also becoming more and more prominent in the telecoms industry and this will start blurring some of the borders between infrastructure, IT and applications.
The NBN will become the predominant infrastructure, and as a utilities-based network it will also provide its services to other sectors, such as healthcare, education and business. With these sectors involved we will see the industry developing specific new business models around infrastructure, ICT and retail. IPTV and other media and entertainment applications will also begin to play a more important role.
The question remains – how successful will the telcos be in retail space?
They will have to decide where they want to play. Infrastructure will largely move to NBN Co, its contractors (eg, Telstra) and a few backhaul providers. Companies also have the opportunity to become the ICT providers to those other sectors. The larger sectors, in particular, will create a sizeable demand for value-added infrastructure services. The first of such contracts signed in the healthcare industry offers glimpses of such a future.
All of this will assist the industry to broaden itself and double its size to around $80 billion by 2020.
Unfortunately the NBN rollout has become a political football. Under enormous political pressure NBN Co has to balance its plan between what is technically required to deliver a first-class infrastructure on the one hand, and on the other to deliver as much as possible before the September 2013 election, to make it harder for a possible Coalition government to wind down the rollout after the election.
The Coalition has indicated that it will honour existing contracts that have been signed under the current government. If that promise is honoured we will see completion of approximately half of the FttH rollout – which is currently under contract – by 2016.
While there have been initial setbacks, and not all problems have been ironed out, the overall rollout is proceeding as planned, with NBN Co having stated that by mid-2013 it was reaching its daily target of around 6,000 premises being passed. From here onwards free connection to premises will take place on an on-demand basis; current indications are that more than 90% of premises are requesting a connection.
The next step after that is for RSPs to sign up customers for their broadband services. Service uptake among the first release sites are already with 12-18 months climbing to 50%-60%.
Table of Contents
1. The NBN in mid 2013
1.1 NBN top priority for the new government
1.2 Departure of Minister for Broadband Stephen Conroy
1.3 I am barracking for the NBN – leaving politics aside
1.4 The future of the NBN after the election
1.5 The pros and cons of vectoring
1.6 Will LTE steal the broadband revolution?
1.7 Multi Dwelling Unit broadband
1.8 The Coalitions NBN Policy
1.8.1 The plan needs some further work
1.8.2 Another step forward
1.9 Why not take up Michael Quigley’s suggestion?
1.10 Major credibility issues for NBN Co
1.11 Is the NBN Co business model flawed?
1.12 NBN – telecoms or digital infrastructure – a SAU question
1.13 Pilbara – a lost NBN opportunity
1.14 Surge in high speed broadband demand
1.15 NBN leadership or NBN procrastination
1.16 The Dutch Disease, broadband and the mining boom
1.17 Comparisons with broadband plans from AT&T and BT
1.18 NBN could slash telecoms maintenance costs
1.19 Broadband demand-side management
1.20 The NBN and the opportunity for ‘virtual’ players
1.21 Will infrastructure constrain the digital entertainment market?
1.22 Will the half-built HFC disaster be repeated?
1.23 Four million households within reach of the NBN by 2015
1.24 Digital infrastructure essential to manage the transition to the e-world
2. Surveys, Statistics and Forecasts
2.1 Market Surveys
2.1.1 Poll prefers FttP plan above FttN plan
2.1.2 Support for fast broadband via an NBN
2.1.3 NBN Business Readiness Survey - 2013
2.1.4 Research into the NBN first release sites
2.1.5 Stats and demographics for the 2012-2015 NBN footprint
2.2 Industry transformation
2.2.2 Fixed infrastructure market
2.2.3 Wholesale market
2.2.4 The retail market
2.3 Penetration Updates and forecasts
2.3.1 Early uptake indications
2.3.2 Broadband access penetration forecasts
2.4 The mobile market
2.5 The digital economy - trans-sector market
2.5.1 Forecasts – 2015; 2020
2.5.2 The digital media market
2.6 Business market survey
2.6.1 NBN impact on industry output by 2020
2.6.2 Summary of survey findings
2.7 Business models and mergers and acquisitions (M&A)
2.7.1 Fixed market scenarios
2.7.2 Mobile market scenarios
3. Introduction and Overview
3.1 General overview of the plan
3.2 How Australia got its NBN
3.3 National interest utility
3.4 NBN national infrastructure, not just telecomms
3.5 Economic reforms
3.5.1 Fundamental change to the economy
3.5.2 People issues
3.5.3 Business modelling - the key to success of the NBN
3.5.4 Recommendations of the 2009 Implementation Study
3.6 Where is the user in all of this?
3.7 Why wireless broadband is no alternative to FttH
4. Policies and Regulations
4.1 Regulatory Framework
4.1.2 Bills passed House of Reps
4.1.3 Key elements of the Companies Bill
4.1.4 Key elements of the Access Bill
4.1.5 The key points of the NBN amendments
4.1.6 Impact of the amendments
4.2 Special Access Undertakings
4.2.1 The NBN Co Review
4.2.2 Analyses - telecoms or digital infrastructure – a SAU question
4.3 Joint Committee on the National Broadband Network
4.4 Regional Telecommunications Policies
4.5 Regulatory reforms for the transition period
4.5.1 Introduction of regulatory instruments
4.5.2 Regulatory instruments - analysis
4.5.3 Final Access Determinations for fixed line telecommunications
4.5.4 Layer 2 bitstream on non-NBN Co networks
4.5.5 Telstra needs to tighten up its migration plan
4.6 Government to fund NBN voice migration
4.7 Budget funding for the National Broadband Network
4.7.1 Administrative and regulatory support
4.7.2 Funding planned until 2016
4.7.3 Funding for The Department of Broadband, Communications and the Digital Economy (DBCDE)
4.7.4 Funding for the ACCC and ACMA
4.8 Telstra Structural Separation Undertaking
4.8.1 Telstra’s initial undertaking
4.8.2 Migration Plan
4.8.3 The Australian Competition and Consumer Commission (ACCC) involvement in the NBN
4.8.4 Telstra’s Structural Separation Undertaking
4.8.5 Universal Service Obligations
4.9 Sale of NBN Co
4.10 Special access for smart utility services
5. Analysis of the Opposition’s position
5.1 The Coalition’s NBN Plan
5.1.1 Policy announcement April 2013
5.1.2 Opposition’s NBN plan needs some further work - Analysis
5.1.3 Why does the Opposition want an NBN?
6. NBN Co
6.1 National Broadband Network Corporation (NBN Co)
6.1.1 An infrastructure company
6.1.2 The role of NBN Co
6.1.3 Governance and management of NBN Co - Analysis
6.2 NBN Co Corporate Plan 2012-15
6.2.1 Long-term financial data on the investment
6.2.2 Operating costs
6.2.3 Effects on revenue
6.3 Shareholders Report - 2012
6.4 NBN Co Corporate plan – 2010 - Historic
6.4.1 Key highlights
6.4.2 Pricing and market assumptions
6.4.3 Product offerings
6.5 Analysis of the company and its activities
6.5.1 Major credibility issues for NBN Co
6.5.2 NBN Co – a company under stress
6.5.3 Can NBN Co do the job?
6.5.4 NBN Co’s position needs to be clarified
6.5.5 NBN Co’s trans-sector role questioned
7. Wholesale and Competition
7.1 Competition analysis
7.1.1 More of the same competition in 2013
7.1.2 NBN and the competition issues
7.2 Wholesale Product Overview
7.2.1 NBN for business
7.2.2 1Gbps wholesale service
7.3 The NBN wholesale and PoI debate
7.3.1 Wholesale dominance
7.3.2 Backhaul competition
7.3.3 The business opportunities of the POIs
7.3.4 CVC issue resolved – sort of
7.3.5 Access seekers gateways
7.4 NBN Co’s multicast service
7.4.1 Overview of the service
7.4.2 Wholesale Pricing
7.4.4 4K TV
7.5 Pricing Strategies
7.5.1 Wholesale Broadband Agreement
7.5.2 NBN Co special access undertaking (SAU)
7.5.3 Wholesale prices
7.6 NBN Utility Management service – The Retail Clause
7.7 Do we need infrastructure-based competition?
8. Infrastructure Plans and Contracts
8.1 The network plan
8.1.1 Overall design and architecture
8.1.2 The backhaul network
8.1.3 ACCC location of 121 POIs
8.1.4 Points-of-interconnect (POI) architecture
8.1.5 Paid for Network Extension
8.2 NBN spurs record telecom capital spend
8.3 External analysis of the Australian Fibre-to-the-Home (FttH) architecture
8.4 NBN Co buys TransACT
8.5 NBN Co contracts
8.5.2 Daly International deploys MDU broadband
8.5.3 Defect-management solution from Geomatic Technologies
8.5.4 Transit Network
8.5.5 End-user equipment
8.5.6 Network facilities Centres
8.5.7 Via Sat to supply satellite ground equipment
8.5.8 Contracts with Transfield and Service Stream
8.5.9 Construction agreements for SA and NT
8.5.10 Constructions agreements for NSW and Victoria
8.5.11 Melbourne, Brisbane and regional NSW constructions
8.5.12 Fibre-optic contracts
8.5.13 Ericsson to build fixed wireless network
8.5.14 Network Operations Centre for NBN
8.5.15 Contractors for first-build sites
8.5.16 Nokia Siemens Networks selected for DWDM
8.5.17 Data Centres
8.5.18 IBM selected as systems integrator
8.5.19 Site Management
8.5.20 Internal IT systems
8.5.21 Network maintenance, installation and activation contract
8.5.22 NBN satellite ground station contracts
8.6 Telstra upgrades pit and pipe infrastructure
8.7 Infrastructure Sharing and Coordination
8.7.1 Smart grids and the NBN
8.7.2 Is it smart to over build the NBN?
8.8 Other Technology Issues
8.8.1 IPv6 transition
8.8.2 Network terminator Device (NTD)
8.8.3 IPTV versus IPTV+RF
8.8.4 Battery Backup
9. The FttH Rollout
9.1 Overview, updates and analyses of the roll out
9.1.1 Introduction and overview
9.1.2 The initial announcement
9.1.3 Roll out progress report late 2012
9.1.4 Roll out update mid 2013
9.1.5 Analysis of the roll out – mid 2013
9.2.1 NBN Pilot Roll out
9.2.2 Other NBN related projects
9.3 The first mainland release sites
9.4 Second-release sites
9.4.1 Nineteen new sites
9.4.2 Second construction phase
9.5 Detailed overview of the roll out program
9.5.1 National overview
9.5.2 Dapto first on the list for 2012
9.5.3 Eight more cities announced – February 2012
9.5.4 Roll outs northern Queensland
9.5.5 South Morang
9.5.6 98K more premises across the country
9.5.8 Western Sydney
9.5.9 Western Australia
9.6 Multi-dwelling units
9.7 First fixed wireless roll outs
9.8 Roll out issues - Analysis
9.8.1 Community engagement
9.8.2 Inhouse networking
9.8.3 Existing FttH users?
9.8.4 Municipality Broadband
9.8.5 Real estate investment
9.9 Regional Backbone Blackspots Program (RBBP) - Historic
Paul is by far, the leading telecommunications analyst in Australia. Not only is his company's research first class and timely, it is superbly contextual to the complexities of today's modern media and communications technology. He is always extremely generous in sharing his knowledge with others and has a great ability to connect people together and be a thought leader on topics of National interest such as the NBN, FttH and Smart Grids.
Bruce Duyshart, Director Strategic Technology, Lend Lease