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Will Telstra be able to create a more affordable alternative to the NBN

If we go back to the early days of the NBN, now more than a decade ago, some of you might recall that from the very first day we have maintained that affordability was more important than the latest technology. I actually said that affordability was THE most important element of an NBN.

Subsequent governments have included this in their NBN mantras. But words are cheap.

When, back in 2011, the NBN company started to introduce the CVC (connectivity virtual circuit) – which are basically extra usage charges on top of the basic access charges – the industry sat up and took notice, as it became clear that these charges would make it very difficult for the retail service providers to build affordable broadband products. Now, six years later, that issue is still at the core of the discussion regarding affordability, with no real solution in sight.

Interestingly Telstra has recently become very vocal on this issue again and has thrown its support behind the affordability issue.

This coincided with Telstra’s announcement of its 4G Gigabit LTE service, combining its efforts with Ericsson, Qualcomm and Netgear. For this customers will have to buy the Netgear Nighthawk M1(A$360), capable of downloading a 300MB one-hour TV episode in 16 seconds; and a 3GB HD movie in three minutes.

The speeds are not symmetric so if you communicate with somebody else the ‘flow’ will be ‘up to’ 150/150 Mb/s. The number of simultaneous users obviously will affect any of these speeds. For home and small offices seeking to connect wirelessly, the Nighthawk M1 is said to support up to 20 Wi-Fi devices on a single connection and boasts download speeds up to 1Gb/s.

The all-important question, of course, will be affordability. The company has not yet announced the pricing options for the service, but it is clear that large parts of the NBN offer services well below those more modern technologies and the NBN will most certainly get increasingly more competition from premium services such as this one from Telstra. There is no doubt that the company can build further on this new product, towards 5G, and there are most certainly also options to work this in with Wi-Fi options.

This will further affect the financial situation of the NBN, as more and more premium bypasses will arrive on the market. Of course, none of this would have been necessary if the company had stuck to the original FttH plan, as that remains by far the best national solution. As mentioned before, we do support the alternative solution of FttC (fibre to the curb) which is called Fttdp (fibre to the distribution point) in Australia.

It will be very interesting to see how this will play out over coming years. Will the NBN company be able to come up with better services and for both the NBN and its competitors how affordable will those services be?

The latter is the all important issue in relation to the take-up rates that are needed to make these investments cost effective.

Paul Budde