Australia - The National Broadband Network

  • July 2013
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 213 pages

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 ATandT 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
2.2.1 Introduction
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 (MandA)
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
4.1.1 Introduction
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
6.2.4 Analysis
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
7.4.3 iiNet
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
8.5.1 Introduction
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 Tasmania
9.2.1 NBN Pilot Roll out
9.2.2 Other NBN related projects
9.3 The first mainland release sites
9.3.1 Introduction
9.3.2 Armidale
9.3.3 Kiama
9.3.4 Willunga
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
9.5.7 Newcastle
9.5.8 Western Sydney
9.5.9 Western Australia
9.5.10 ACT
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
9.9.1 Background information
9.9.2 Adelaide blackspots receiving high-speed broadband
10. Fixed Wireless and Satellite Networks
10.1 Introduction
10.2 NBN Co's Fixed Wireless Network
10.2.1 Services based on 2.3GHz spectrum
10.2.2 Construction plan
10.2.3 Visionstream to construct the network
10.2.4 NBN facilitates wireless competition - Analysis
10.2.5 Fixed wireless rollouts
10.2.6 Other developments
10.3 The NBN Satellite Network
10.3.1 Introduction
10.3.2 Ka-band satelittes
10.3.3 Satellite speeds
10.3.4 Interim regional and remote satellite services
10.3.5 Raising the NBN interim satellite cap
10.3.6 10,000 VSAT terminal milestone for NBN
10.3.7 Via Sat to supply satellite ground equipment
10.3.8 Ground station gateways
10.3.9 Satellite launch contracts
10.4 Why wireless broadband is no alternative to FttH - Analysis
11. RSPs Pricing and Products
11.1 Retail trends and developments
11.1.1 Overview of key developments
11.1.2 Second wave of RSPs now coming online
11.2 NBN Penetration Forecasts
11.3 RSP Products and Prices
11.3.1 Introduction
11.3.2 AusBBS PAYG NBN pricing
11.3.3 Devoted - Victoria
11.3.4 engin and Nextgen NBN VoIP partnership
11.3.5 Exetel
11.3.6 iiNet
11.3.7 Commander (M2)
11.3.8 MyNetFone
11.3.9 NEC plans NBN services
11.3.10 Optus
11.3.11 Primus
11.3.12 Telstra
11.3.13 NBN plans won't cost more than today's broadband
11.4 Other developments
11.4.1 Australia Post
11.4.2 AARNet and the NBN
11.4.3 Telcoinabox
11.4.4 Vodafone and the NBN
11.5 Telstra to trial copper-fibre transfer
12. Telstra
12.1 Telstra and the Coalitions NBN plan - Analysis
12.2 Telstra and government agree on NBN future
12.2.1 Two years of negotiations
12.2.2 Analysis of the agreement
12.2.3 Definitive Agreement signed and sealed
12.3 Telstra Structural Separation Undertaking
12.3.1 Telstra's initial undertaking
12.3.2 Telstra's final undertakings analysis
12.4 Telstra's e-health initiatives
12.4.1 Introduction
12.4.2 Royal Australian College of General Practitioners
12.4.3 High Definition rural e-health services
12.4.4 Cloud computing initiative
13. Municipal and Community Networks
13.1 Local councils need to be more active in NBN development - analysis
13.2 Trans-sector thinking and municipal broadband
13.2.1 Local government
13.2.2 Holistic thinking
13.3 The role of local councils
13.3.1 Infrastructure comes natural to local councils
13.3.2 Why should local government be involved?
13.4 Cities are taking charge
13.4.1 Introduction
13.5 How to get started
13.5.1 A city broadband agenda
13.5.2 The local community model
13.5.3 Framework for local government policies
13.5.4 Steering committees
13.5.5 Broadband education
13.6 Broadband development phases
13.6.1 Quality and affordability
13.6.2 The development of quality broadband demand
13.6.3 Industry is ready to deliver applications
13.7 City marketing
13.7.1 The concept of telematica
13.7.2 Three strategic elements of telematica
13.8 Examples of tele-cities
13.9 Broadband speeding up local governments
13.10 National Broadband Network - Digital Economy (Separate Report)
13.11 Smart Cities, the Way Forward
14. Digital Economy
14.1 Strategic Analysis
14.1.1 Australia's digital transformation is underway
14.1.2 The issue is the Digital Economy, not Broadband - Analysis
14.1.3 The impact on the economy
14.1.4 The thousands of unreported benefits of high-speed infrastructure
14.2 National Digital Economy Strategy (NDES)
14.2.1 Introduction
14.2.2 Other specific initiatives
14.2.3 Overview of activities mid 2013
14.2.4 Advancing Australia as a Digital Economy update to the NDES
14.2.5 Progress of the program mid 2013
14.2.6 Local e-government initiative
14.2.7 The NBN-enabled education and skills services program
14.2.8 Tuition for new migrants using the NBN
14.2.9 E- health services
14.2.10 Seniors
14.2.11 Australian Interactive Games Fund
14.2.12 Indigenous Communications Program
14.2.13 Smart home in Armidale
14.2.14 Energy efficiency and sustainability
14.2.15 Teleworking
14.2.16 NBN Regional Legal Assistance Program
14.2.17 High-definition videoconferencing pilot program
14.2.18 Digital Business Kits for small businesses
14.3 NBN Art grants
14.4 Business participation on the NBN - survey
14.4.1 Broadband a key digital driver
14.4.2 Broadband boost
14.4.3 Network driver
14.4.4 Utility features
14.5 Smart Farming
14.6 SmartICT
14.7 Sense-T
14.8 Traffic lights and alarm system go M2M over the NBN
14.9 More education required to sell the NBN to business users
14.10 Digital Inclusion
Table 1 NBN take up rates first release sites (pre-sales indications)
Table 2 Broadband uptake* scenario forecasts 2015; 2020 (household penetration)
Table 3 Impacts of the NBN on industry output at 2020 (% change)
Table 4 NBN budgeted and actual expenditure 2008 - 2015
Table 5 NBN pricing schedule for access virtual circuits
Table 6 NBN pricing schedule for PoI connections
Table 7 - List of points of interconnection to the National Broadband Network - November 2012
Table 8 - Deployment schedule for 2013-21 corporate plan
Table 9 Numbers of premises passed first release sites (incl. Tasmania)
Table 10 NBN pre-sales take up rates first release sites
Table 11 - NBN Co 2012 roll out schedule
Table 12 Scenario forecasts of household penetration from NBN uptake 2015; 2020
Table 13 Overview of NBN fibre plans by selected provider 2013
Table 14 Overview of Commander (M2) NBN business fibre plans
Table 15 Total payments to be made to Telstra 2012 - 2020
Table 16 NBN deal valuation cash flows
Table 17 What does a better broadband service look like?
Table 18 Will better broadband increase your digital economy participation?
Table 19 What do you value in a broadband service?
Chart 1 Market share size of NBN trans-sector market 2020
Chart 2 NBN services revenue share estimates by market share 2015
Chart 3 NBN services revenue share estimates by market share 2020
Exhibit 1 - NBN policy focus beyond the election
Exhibit 1- Trans-sector vs. Cross-sector
Exhibit 2 Economic benefits of broadband overview of surveys
Exhibit 3 - Key elements of Telstras SSU
Exhibit 4 - Key points of the Coalition's NBN Plan
Exhibit 5 - Ultra-HDTV 4K standard' for satellite TV
Exhibit 6 - IT Platform and capabilities
Exhibit 7 - Demo centre and demo truck
Exhibit 8 The Regional Backbone Blackspots Program
Exhibit 9 - IP Channel Bonding
Exhibit 10 Trans-sector benefits
Exhibit 11 The social and economic benefits of broadband case study
Exhibit 12 Key broadbanding steps
Exhibit 13 Some application bit rates
Exhibit 14 Key applications of a digital economy
Exhibit 15 Round 1 funding recipients Digital Hubs and Digital Enterprise
Exhibit 16 Eligible round 2 communities Digital Hubs and Digital Enterprise
Exhibit 4 Eligible round 3 communities Digital Hubs and Digital Enterprise
Exhibit 5 Digital local government program projects May 2013

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