2015 Australia - Fixed Broadband Market - Insights, Statistics and Analysis

NBN makes deployment progress as soaring SVoD traffic places extra demands on networks

This report provides statistics and analyses on Australia’s fixed-line broadband sector, including recent developments affecting the NBN as well as DSL and HFC networks. The report assesses overall market dynamics, and the key operating performance of the principal players. It also covers developments in NBN Co’s efforts to extend the footprint of the NBN by utilising the existing copper infrastructure of Telstra and Optus, and examines the likely trends which will develop into 2015 and further ahead as the broadband sector adjusts to the introduction of OTT and SVoD services from providers including Presto TV, Stan and Netflix.

Focus still on a second-best FttN infrastructure

The changing political landscape in Australia since 2013 has resulted in a fragmented broadband policy, with a national network based predominantly on FttP having been ditched for a multi-technology mix utilising existing and aging copper infrastructure. The country has fallen further in international league tables for broadband speed, a situation which will become more pronounced as its main trading partners and economic competitors ramp up their own FttP networks, and so pull further ahead as they capitalise on opportunities provided in the digital future.

DSL and HFC networks still of value

With the broadband sector now dependent on a multi-technology NBN, the DSL and HFC sectors have gained a reprieve of sorts. At the end of 2014 NBN Co struck a deal to incorporate copper infrastructure owned by Telstra and Optus within the NBN in areas where copper would provide the best service.

While much of the cable infrastructure has been upgraded to provide data at up to 100Mb/s, this is an interim measure. The DOCSIS 3.1 standard has scope to deliver 1Gb/s, and so meet the anticipated overall data needs of the average household in coming years. NBN Co in April 2015 revealed plans to trial new HFC technologies in several suburbs of NSW and Queensland by mid-year, with a potential to incorporate DOCSIS 3.1 technology within the NBN’s multi-technology mix from 2017. DSL could also potentially benefit from the recently standardised G.fast technology, though in both cases copper remains a solution for high density areas only.

Residential and business sectors requiring faster data

A growing number of businesses with access to the NBN have switched to fibre services in a bid to compete in the global economy more effectively, and make use of such services as cloud computing, online interaction, and media conferencing. Businesses connected with fibre generate far more traffic than their copper-based counterparts. The same trend is seen in the residential sector, where the launch of Netflix in March 2015 immediately showed the strains of popular video-on-demand on aging copper infrastructure.

Slow but promising growth in greenfield fibre

The deployment of FttP has been supported by a recent framework agreement under which new major housing sites are to be supplied with FttP infrastructure, or to be made ready for such deployment. Regulations proposed in late 2014 outlined the responsibilities of NBN Co and Telstra for the provision of fibre in these developments, and some of the aspects effective became effective from March 2015. These are aimed at improving competition, minimising costs, and providing a level playing field for operators. NBN Co is the operator of last resort for housing developments where a commercial solution is not economically viable, while Telstra fills that role under certain conditions. As a measure of progress since the slow impetus seen in 2011, in the third week of April 2015 alone almost 17,000 lots or premises were passed by the NBN, of which about 13,980 were in brownfield and 1,870 in greenfield areas.

Key developments:

• Average traffic per user on NBN reached 83GB per month at end-2014;
• Draft standards published related to vectored VDSL2 services on the NBN;
• Government adopts a multi-technology mix for the NBN;
• DSL vectoring developments;
• HFC looks to potential of DOCSIS 3.1;
• Telcos’ operating data to Q4 2014;
• ACMA market report 2014;
• ABS data to December 2014;
• Recent market developments.

Companies mentioned in this report:

Optus, Telstra, Quickflix, Presto TV, Stan, NBN, TransACT, Exetel, Vodafone, Sensis, NBN Co, iiNet, TPG