Are National Broadband Networks Doomed?

Over the years, I’ve worked with national broadband projects in Australia, New Zealand, Qatar and Singapore. More recently in Australia, the National Broadband Network (NBN) has been in the news for all the wrong reasons. Their Retail Service Providers (RSPs) – who sell the NBN services to end customers, have been up in arms about NBN approaching large enterprise customers directly. Today, they announced that they would no longer do that – and that has the RSPs like Vocus, Mactel and Telstra very happy. Arguably, the decicion for NBN to sell direct was in breach of the founding principles that the Australian government put in place when it created NBNCo.

Such controversy is not why I think the NBN and the equivalents in other countries are doomed, although it’s not helping their case in the eyes of the public and end customers.

No, I think the proliferation of 5G networks and more recently global players like SpaceX’s Starlink constellation could be the harbinger of death for NBN.

Slow Rollouts

NBN has been copping a lot of flack lately in the media for taking too long to roll out. I get it, Australia is a HUGE country – even with most Australians living within an hour of the coast, it’s still a lot of physical ground that needs to be covered by the fibre and HFC networks that cover the bulk of the NBN end users. This has lead to a level of dissatisfaction with NBN as a whole.

Slow Network

Those end customers that do have a NBN connection are often complaining to the telecommunications ombudsman about the service they get – and while some of those faults are laid at the doorstep of the RSPs, some of it is due to physical breakages of modems and network termination devices and some are the fault of NBN – in all cases, because in Australia, we include NBN in the product offerings of the RSPs (ie – its customer facing), NBN cops the blame for ALL of the issues. As an example, my RSP (Optus) sold me a 100/40 HFC based NBN connection – which is usually fine. I often get 90-95 Mbps downstream and 30-37 Mbps upstream. However, so many HFC customers were seeing much slower than advertised speeds that Optus removed that speed combination from the market – the fastest they sell now is 50/20. (50 Mbps down, 20 Mbps up).

5G Networks

The 5G rollout in Australia is still pretty limited, but the 4G (LTE) rollout is pretty comprehensive and on 4G, I often see speeds approaching my home NBN based connection. Assuming 5G will bring a significant boost in speed (along with many other advantages including much great density of connections per cell) – which means that a 5G connections promises to deliver faster connections than NBN and without the need to tie the end customer down to their home boundaries.

If you add unlimited plans (in terms of Gb to be transferred up or down) to such as 5G (or even a 4G service) then you have a strong competitor to the NBN.

Some local mobile network providers and even MVNOs are already talking about selling fixed mobile services instead of selling a NBN based home (or office) connection.

Starlink

This morning, SpaceX launched another 60 satellites into orbit, bringing the total to 240 – that’s 120 new satellites within a month – well on the way to 12,000 satellites.

As I’ve mentioned in my previous blog post (see https://telcotalk.online/index.php/2020/01/09/starlink-a-global-csp-disruptor/), SpaceX’s Starlink constellation of communications satellites promise to deliver broadband (up to 10 Gbps) AND low latency (good for gaming) to 100% of Australia (other than the Australian Antarctic Territory). If SpaceX can deliver reasonable plans (in terms of speed, capacity and price) then SpaceX will be a strong competitor for NBN. If the plans are right, it could kill NBN.

Two NBN alternatives – either could kill NBN

Sure, NBN in Australia is facing some significant challenges, but these are exactly the same challenges that all national broadband networks/project face… Customers have zero allegance to NBN – and if 5G or Starlink will provide faster speeds at a competitive price, NBN is doomed.

If you disagree, let me know what you think…

New Zealand’s National Broadband Project – progressing

Originally posted on 5Jul10 to IBM Developerworks (10,547 Views)

Since I last posted about New Zealand’s National Broadband project which seemed to me to be much more focused on the subscribers and the products they would have available to them (and the retailers that sold them) than the high speed backbone network.  My impressions may have been tainted by the work I was doing with the Telecom New Zealand Undertaking In Progress (UIP) project that I was involved with – the rather public forced split of Telecom New Zealand’s Retail, Wholesale and Network departments to ensure equivalency of input for all retail and wholesale partners for (only) broadband services.

My understanding of the situation has developed somewhat since then and we can see that the situation in New Zealand Government also involves a similar structure to what is happening in Australia with the Communications Alliance and the NBN Company.  In New Zealand, the companies are a little different.  Certainly, we have the NZ Government Ministry of Economic Development (MED) as one participant, then we have Crown Fibre Holdings (not much of a web site there!) -set up by the Government to manage the process of selecting the companies to build the National Broadband Network and manage the government’s investment in the NBN.  Together with the companies that are bidding for the deal Crown Fibre holdings will form Local Fibre Companies (LFC) which (combined) will match the government’s contribution to the NBN.  That will mean the total project will cost NZ$3 Billion** with the LFCs kicking in NZ$1.5B and the NZ government contributing NZ$1.5B.  I dont have the full schedule, but from a couple of sources, I have compiled an overview of the progress to date:

  • 21 October 2009 – Communications and Information Technology Minister Steven Joyce announced the government’s process for selecting private sector co-investment partners.
  • 13 November 2009 – Intention to respond due. 
  • 9 December 2009 – The Ministry and Crown Fibre Holdings release a clarifications and amendments
  • 14 January 2009 – The Ministry and Crown Fibre Holdings released additional clarification and amendments with respect to the Invitation to Participate.
  • 29 January 2010 – Proposals must be lodged
  • 4 February 2010 –  Crown Fibre Holdings notify respondents of handover of responsibility for the partner selection process
  • August 2010 – Refined Proposals to be re-submitted to the government (See http://www.totaltele.com/view.aspx?C=0&ID=456818 )
  • October 2010 – Successful respondents announced/notified.

What I find a bit interesting is that the government are only looking to cover 75% of the population by 2019.  For a small country (compared to Australia at least), that seems to me to be a very low target to aim for.  If we compare that with Australia’s NBN project, their target is 90% coverage at greater than 100Mbps and 10% greater than 12Mbps (that’s 100% coverage!) by 2017.  Admittedly, the Australian project has about a year’s head start, but it’s also a MUCH bigger country with a population nearly five times larger.  Lets have a quick look at the comparisons:


AustraliaNew Zealand Ratio
(AU to NZ)
Population22.4M4.3M5.2
Area7,617,930 km2268,021 km228.4
Population Density2.833/km216.1/km20.17
Planned NBN Completion year20182019
NBN Coverage22.4M (100%*)3M (70%)7.5
NBN Cost**AU$40B = US$33BNZ$3B = US$216.5
NBN Cost per person (US$/person)US$1473US$6662.2
NBN Cost per area (US$/km2)US$4331US$74620.6

* 100% coverage is split between greater than 100Mbps (90%) and greater than 12Mbps (10%)
** One Billion is using the short scale definition = 109 = 1,000,000,000

What do I take from this quick comparison?  Lets take a quick look at the numbers.  Obviously, Australia is a much bigger country (28.4 times larger) and has a much larger population (5.2 time larger), so it is reasonable (in my opinion) that the cost per potential NBN customer should be higher for Australia (and it is at 2.2 times higher) but the thing that makes me ponder is the cost per square kilometre:  New Zealand is nearly twice that of Australia.  When the New Zealand target is only 70% of the population and thus enables them to avoid areas that are physically difficult to provide coverage to (I’m no NZ geologist, but I would imagine lots of the South Island’s most mountainous areas would pose significant problems for cablers) I find myself wondering why the NZ network is going to be so expensive.  I guess it could be a matter of scale – but I thought the biggest cost was actually laying the cables rather than the back end systems which every broadband network will need (routers, switches, administration and management systems).  Maybe I am missing something – does anyone have any ideas?


edit:  I’ve just found this quote in Wikipedia which (I think) is truly revealing when you consider New Zealand’s 70% coverage target:

“New Zealand is a predominantly urban country, with 72% of the population living in 16 main urban areas and 53% living in the four largest cities of AucklandChristchurchWellington, and Hamilton

source: wikipedia.com

By only extending the NBN to those 16 main urban areas and nowhere else – they’ve achieved their target!  You wouldn’t want to live in country New Zealand and be dependent on a fast network!