Predicted data spike justifies government network, NBN Co says

Cisco study shows seven-fold increase in Internet traffic by 2016.

NBN Co said a new Cisco study showing a seven-fold increase in Internet traffic by 2016 proves the urgency of deploying the NBN.

Cisco predicted Aussies will devour 708 petabytes of data monthly in 2016, 7.3 times as much as Australia consumed monthly in 2011. That’s the equivalent of 2 billion DVDs per year, and reflects a compound annual growth rate of 49 per cent, the networking company said.

Cisco made the prediction in its sixth annual Visual Networking Index Forecast (2011-2016).

"Australia's ability to participate in the digital economy is being held back by the unequal access to broadband around the country and a chronic need for faster upload speeds,” said NBN Co Chief Technology Officer, Gary McLaren.

"A National Broadband Network with fibre at its core removes these bottlenecks making it easier for families and business owners to create and send large files, work from home and participate in video chats and conferences," McLaren said. "It will enable true two-way broadband communications."

The Coalition has criticised the Labour’s fibre-to-the-home approach.

In his recent budget reply, Coalition leader Tony Abbott asked, "Why dig up every street when fibre to the node could more swiftly and more affordably deliver 21st century broadband?"

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8 Comments

Industry observer

1

Tony Abbott doesn't read reports. Facts might get in the way of his prejudices.

gnome

2

@1, +1

None so blind...

Mathew

3

Alan Kohler back in 2010 first suggested that NBNCo could be very profitable because of their usage based pricing. The entire NBNCo financial model is based on rising demand for it's viability. The disappointing part of this is that it prices an abundant resource (fibre speed and bandwidth) as a scarce resource.

If you search for ARPU in the NBNCo Corporate Plan, you will quickly see that a key point of the plan is raising average revenue per user).

Plans for AVC pricing are outlined on page 101:
* 1000/400Mbps falls from $150 to $90, while the average speed grows from 30Mbps to 230Mbps.
* Price falls by 40% while average speed grows by 760%

Plans for CVC pricing are outlined on page 103:
* Starts at $20Mbps/Month when the average data usage is 30GB/Month and falls to $8Mbps/Month when the average data usage is 540GB/month.
* Price falls by 2.5 times, while the average data usage grows by 18 times = growth in revenue from CVC of 720% when accounting for price falls.

Prices for the same service will (almost certainly) decline, but at a rate significantly less than the uptake of faster services / downloading more. The impact of this is that if a person wants to maintain the same relative ranking, then they will need to pay more.

Kevin

4

Mathew,

I can manipulate figures as well.

Fact: NBN does not require commercial rates of return. Never has and therefore is far more bulletproof than most other offerings out there.

Fact.: Market competition directly brought about by this government monopoly shows that prices are equal if not lower than current offerings. That is why the ACCC permitted this to happen because they knew this.

Fact: Spin it any way you like. The NBN will make a profit and a rather large one. When every single Australian will be using it within 15 years then there projections on revenue return will be far beyond the conservative estimates they have now.

Fact: The current "privately owned" infrastructure had 15 years to become competitive and it failed. The incumbent Telstra dominated the market and actively pursued its monopoly position.

Fact: If you install Coalition's fiber to the premises you fail to remove the private monopoly on the last mile owned by Telstra so you have fixed nothing and our hard earned dollars will end up in their coffers.

So my suggestion is provide a viable alternative instead of complaining about the current offering which will revolutionize the way we do business in this country and finally create a level playing field in the telecommunications industry.

Kevin

Michael

6

@ Kevin +100

The current NBN can make our internet faster, cheaper, more reliable, provide universal access across ALL of Australia, and STILL make a full return (plus dividends) for the government, why the hell not?

Francis

7

Mathew the Troll, the coalition's fibre to the node will not only be more costly to operate and play into the hands of monopoly copper owner Telstra, but it will perpetuate today's slow upload speeds.

Any suggestion that regional Australia doesn't want fast uploads is disproven by the fact that 37% of actual NBNfibre customers are running 100/40 services, according to Mike Quigley at last week's SenateEstimates committe hearing. In 2010, NBNCo forecast take up of only 8% for the fastest service by 2012, but it is a massive 37%, with 82% choosing speeds of 25/5 or faster. FTTN will only deliver ADSL upload speeds, crippling offsite backup, video calling and simultaneous use of the service by everyone in the household or business. Instead of repeating the proposals which lost the Liberals the 2010 election, why not lobby them to act in the national interest and adopt the NBN. By leaving it exclusively to Labor, they are risking at least eight regional seats, and the prospect of another election lost to the cross bench candidates.

click here

8

I am a forex beginnier, but i have to no idea which platform to choose.
.

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