I hope that those of you who celebrated Christmas enjoyed being together with families and friends, and that everyone took the opportunity for a break from the everyday world. Happily the holiday season continues so most of us will have a bit more relaxing time ahead.
And of course the new year is upon us.
First of all, I hope that our political leaders around the world are keeping the well-being of their people at the forefront of their minds. What this means is that political ideology should be put aside as we move ahead through collaboration and cooperation, both nationally and internationally (but also on issues of national importance such as telecoms and smart energy). If we have learned anything from the past few years it is that divisive politics are not what people want and eventually those confrontational politicians will be defeated through the democratic ballot boxes because the majority of the people will not support them.
Once we arrive back at the centre of politics the first thing a new breed of politicians will need to do is to address inequality: economically, socially, financially, gender-wise and so on. Once that is in place other important issues can be with less acrimony and fewer disputes.
Now to look at the telecoms environment in Australia …… divisive politics here has given us a A$50 billion lemon in the form of a second-rate NBN that will be unable to deliver Australia truly high-speed broadband at an affordable end-user price. As this infrastructure is critical to a well-functioning modern economy and society, failure to deliver it will put the country and its citizens at a disadvantage in relation to other modern economies.
A change in government in May 2019 would most certainly have an effect on the NBN. The current government is avoiding the burden of a political backflip, but a Labor government doesn’t have that problem. They cannot undo the present situation but they can come up with better plans for the future. They will also have to address the financial situation of the nbn company, and with some clever accounting that will in effect lead to some form of a write-down of some parts of the NBN.
On the negative side, a Labor government will have to face the reality of the NBN as it is today; but they can come up with a long-term policy for the NBN that will show a much clearer path ahead to FttC/FttH. Perhaps a first step will be to replace the HFC upgrade with FttC, something the nbn company is already trialling. This will be followed by a plan to also replace, over time, FttN with FttC. There is no doubt in my mind that the current leadership of the nbn company will have plans in place in relation to a potential change in politics. They will be very quiet on this for now, but any responsible company will have to have plans in place for potential changes that are highly likely to happen.
The process will most likely start with a total review of the NBN, which will need to be announced fairly soon after the election.
Also the current government promised an overall telecoms review (mobile and fixed) but they never initiated this. A new government will, I believe, launch a comprehensive review of the total market, which will take into account the NBN, industry developments such as mergers and acquisitions, the current wholesale regulations (CVCs, etc), USOs, 5G and other mobile developments. What will be interesting is whether there will be two reviews, or whether the two will be bundled together. In my view the unsatisfactory situation of the NBN warrants a separate review; however the two will have several overlaps so these reviews will require very careful consideration.
My hope is that the industry will pre-empt such reviews and begin to prepare themselves for discussions and submissions, so that we can have a running start when the rubber hits the road soon after the election. I would hate to see us, as a country, again wasting a lot of time getting the job done. In 2005 the aim was to lift Australia into the top ten countries with the highest fixed broadband speeds. At that time we hovered around position 25, but we have since dropped to below 50.
Another interesting development in 2019 will be the ACCC decision on the merger between TPG and Vodafone. I think that TPG and Vodafone will have to come up with a solution that will see the two brands continuing separately, like the Qantas/Jetstar situation, whereby TPG remains the price challenger and Vodafone the premium brand. If they can work this out to the satisfaction of the ACCC I think the merger will go ahead.
And finally, despite the hype surrounding 5G , the situation in 2019 will continue to be mainly hype-based. A few upgrades from 4G in metro-cities will take place, especially to address network congestion and network inefficiencies, but in general not much will happen. 5G will not become an alternative to the NBN any time soon and in general nothing will happen to seriously affect mobile users.
I have been involved in this industry for more than 30 years, but 2019 will join all the other years behind us as an interesting and challenging one for the telecoms and the broader ICT industry. This is what makes it such an exciting environment to work in.
All the best for 2019.
Paul Budde