Another piece in the NBN puzzle

The government's latest NBN announcement further demystifies the $38 billion project and gives us a clearer picture as to what expect from the network.

With all the foundations now in place NBN Co is ready to roll.

The rollout schedule launched by the company will see the national broadband network becoming available within the next three years – to around four million households, which is well over half the population of Australia. Of these households approximately 3.5 million will be able to obtain access to fibre; 300,000 to wireless broadband; and 200,000 to satellite broadband.

As with every large-scale infrastructure it is essential that the groundwork is done properly – otherwise major problems will occur during the implementation. All of the key ingredients are now in place, the legislation, the funding, the regulations and the contracts with Telstra and Optus. This does not mean that there will not be hiccups going forward, but the industry as a whole is confident that all the necessary work has been done to allow for a fairly smooth rollout. This took some time, but with an eye on the future it is time well spent.

The rollouts will take place throughout the country; however, by the end of 2015, nearly all households and businesses in both Tasmania and the Northern Territory will be able to connect to the NBN. This further underlines the importance of linking regional Australia to the superhighway. Otherwise the first four million connections are fairly equally spread around the country.

Nevertheless, many people will be disappointed to discover they are not on the initial rollout list. On it we can see several communities that have been working hard to be part of the first release and their inclusion is recognition of that hard work in getting their communities NBN-ready.

The broader importance of the NBN and the social and economic benefits that will flow from it are also becoming clearer. Earlier this week AGL Energy said that thanks to the national broadband network it will be able to build the largest wind farm in Australia, near Silverton in western New South Wales. It was access to the NBN that made this project economically viable, as it saved the company between $30 million and $40 million in communications costs.

The concept of the internet of things, or M2M, is also gathering momentum, as more and more people begin to understand the power of utilising ICT solutions to address the many complex issues that confront organisations and society in general. By capturing key data – weather, energy, traffic movement, business and financial data, behaviour patterns and so on – and processing and analysing it in real time, information can be provided to people and organisations that will enable them to operate and function more effectively and productively. This requires a robust, secure and reliable infrastructure, which the NBN is able to provide.

Under the national digital economy strategy we will now also see many community health centres and GPs connected to the NBN – in particular, a large number in regional Australia. This will enable them to provide health consultancy services using video-based connections, thus avoiding some of the cost and stress experienced by patients and their families when they have to travel long distances.

The mobile operators are another group that is eagerly awaiting the NBN. The explosion in broadband requires them to roll out an increasing number of mobile base stations – literally thousands of these units are needed and they must be linked to fibre optic networks in order to handle the massive capacity required for mobile broadband applications.

The same applies to the explosion in smartphones and tablets now being used in the home, next to PCs and laptops – all connected to the broadband network at home. Many users are approaching their connection limit and will be asking for more capacity. Smart TVs will add further pressure on the current broadband home connections.

The NBN will be seen as a significant lifestyle tool. And as one of my colleagues recently commented: ‘There is no business case for quality of life’. But should that then be a reason not to go for lifestyle improvements?

Having access to the NBN does not necessarily mean connection. However, BuddeComm estimates that, based on the pricing that is available at the moment, the service will quickly see penetration rates moving towards 70 per cent. The entry price level to the NBN is equal to that of current broadband products but the NBN offers a significant increase in quality and so, for most users, switching over to the NBN will be an obvious choice.

Affordability is a key factor in relation to uptake and in countries with competitive prices there is already a high level of growth in fibre uptake (50 per cent-plus). Furthermore, once sections of the network are switched over to the new NBN the old copper network will be retired, so a 100 per cent penetration rate will eventually be achieved. This is, of course, essential if we want to provide national e-health and national tele-education services as well. Organisations who want to provide mass market broadband services perceive ubiquitousness as one of the NBN’s most attractive elements.

So, after all the hard work involved in getting the foundations in place, we will now begin to see a rapid roll out of the service. And once the first few hundred thousand people are connected user-based stories will emerge. BuddeComm predicts that the NBN will soon be the next thing people want to have access to. Our colleagues in countries where high-speed broadband has already been rolled out report that new applications, new opportunities and new uses are being discovered on a daily basis.

Finally Australia, also, can look forward to this exciting new future.

Paul Budde is the managing director oBuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries.


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