Virus impact over each market - telecom operators, government agencies and regulators' responses - revised forecasts for the next 5 years.
Last updated: 24 Aug 2016 Update History
Report Status: Archived
Report Pages: 199
Analyst: Paul Budde
The report covers detailed information on the roll out of FttH, FttB, FttN, Fttdp, HFC, Wireless and Satellite infrastructure as well as statistics on subscribers, revenues and a range of other parameters. It also provides a range of analyses and insights as well as an overview of the policies and regulations that apply to the NBN and the effects that this has on competition in the telecommunications wholesale and retail markets.
Researcher:- Paul Budde
Current publication date:- August 2016 (9th Edition)
By late 2016 – seven years after the launch of the NBN – over two million premises were able to connect to the NBN. So far three-quarters have access to FttH (fibre to the home), the remainder to wireless and satellite networks. The revised rollout of the so-called MTM (multi-technology mix) based on FttN and HFC) only began in earnest in 2016. The NBN company has now fine-tuned its rollout strategy and is set to extend the network by 40,000 premises a week; but from here on FttH will play only a minor role, mainly in greenfield installations.
After the Coalition government won the 2016 federal election any debate about changes to the underlying infrastructure faded away, as the rollout of the MTM is now too far advanced. However the NBN company has indicated that it does have a roadmap towards providing fibre deeper into the residential network. Fttdp (fibre to the distribution point) is one of the key technologies they are investigating.
Around the same time the industry started to seriously question the regulatory environment around the NBN. The smaller players are in danger of being squeezed out of the market through complex and expensive NBN wholesale offerings. These same arrangements also mean that the end-users are not receiving the benefits of high-speed broadband in an affordable form. The ACCC reacted to this by launching a fresh competition study, the results of which will become available in 2017.
As a result of unattractive wholesale arrangements and a second-rate NBN several telcos are eager to skip the MTM-based infrastructure and deploy their own fibre networks. In this way competition is arriving in multi-dwelling units (MDUs) in various cities, this despite the fact that competition is heavily restricted through government regulations. Advances in wireless technology – especially in comparison with what a second-rate NBN can deliver – has seen an explosion in new players entering this market. Furthermore future developments in mobile technologies (LTE and 5G) will lead to more competition with the NBN, as more and more users will opt for better and more affordable high-speed broadband services through these alternative services.
All of these developments are putting a cloud over the financial future of the NBN company. Government funding runs out in 2017, and with another $20 billion likely to be needed to finish the job it is questionable whether private investors will be interested in funding this shortfall.
Apart from another two-year delay in the roll-out of the NBN – due to the political changes to the NBN since 2013 and a more than doubling of the costs – significant uncertainties still remain about some of the technical and operational issues of the MTM. There are a great number of unknowns in this process and overseas FttN (fibre to the node) experience shows that it is not all plain sailing. In many cases large-scale replacement of old copper infrastructure will be required. At the same time rolling out fibre has become significantly cheaper, especially when done by new companies, as is the case in the USA, France, the Netherlands and a number of other players in Northern and Eastern Europe. Most countries now skip their FttN and HFC rollouts and go straight into FttH.
While in mid-2015 the government revived some of the digital economy strategies that were put in place between 2009 and 2013, there is still no holistic approach to services such as e-health and e-education. Interestingly we see cities developing their own strategies around the concept of smart cities. When the government announced its innovation policy it did not even mention the important role the NBN can play in that context. Cities, however, do understand the importance of such infrastructure for their economic and social developments.
These broader developments in the digital, sharing and interconnected economy will be further accelerated by a range of other industry sectors such as cloud computing, M2M and big data. The over-the-top (OTT) players are also becoming increasingly prominent in the telecoms industry and this will start to blur some of the borders between infrastructure, IT and applications.
The NBN will have to become the predominant national digital infrastructure for all of these developments, as a utilities-based network it will also need to provide its services to those other sectors. With these sectors involved we will see the industry developing specific new business models around infrastructure, ICT and retail. Streaming video and other media and entertainment applications are already playing an important role in the drive for high-speed broadband demand. The question here is whether the current MTM configuration of the NBN will be able to deliver the capacity, reliability, redundancy and security for such services in a ubiquitous way to all Australians. Most experts agree that only a full-fibre network can deliver that level of infrastructure robustness.
The report covers detailed information on the rollout of FttH, FttB, FttN, Fttdp, HFC, wireless and satellite infrastructure, as well as statistics on subscribers, revenues and a range of other parameters. It also provides a range of analyses and insights, plus an overview of the policies and regulations that apply to the NBN and the effect that these have on competition in the telecommunications wholesale and retail markets.
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Hendrik Rood, Senior consultant, Stratix Consulting
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