NBN Co CEO Bill Morrow has voiced doubts that 15 megabits per second will be fast enough for the average Australian home in the long term.
Morrow's comment, made at the presentation of NBN Co's annual results, was in reference to the government-commissioned report issued by the Vertigan panel. The report included a commissioned analysis by the Communications Chambers. The Communications Chambers modelling predicted that the median Australian household in 2023 will require bandwidth of only 15Mbps.
The prediction is contained on page 34 of the panel's cost-benefit analysis of the NBN.
Morrow said he was “curious” about the finding.
“When you do a snapshot in time, you can look today and many people would be happy with 15Mbps,” he said. “But I am a big believer personally that I think there is going to be a data tsunami that’s going to come in, that’s going to hit us.”
“It is a [voluminous] amount of data that’s going to be consumed, so I suspect [the Vertigan panel is] looking at a snapshot in time versus the prediction of what is to come.”
According to NBN Co’s figures for FY 2013-14, slightly more than a third of NBN fibre users have selected the slowest speed tier of 12Mbps down and 1Mbps up.
The majority of NBN users chose plans with download speeds of 25Mbps or higher, with about 40 per cent opting for the 25/5Mbps plan and nearly 20 per cent taking the highest 100/40 Mbps plan.
The cost-benefit analysis had included some caveats relating to the modelling:
The figures for median demand should be interpreted with some care; network capacity should not be based on this metric as by definition, such a network would (to some extent) disappoint 50 per cent of households.
The figures of 15 Mbps and 43 Mbps for median and top 5 per cent of demand may seem low, particularly by comparison to the results of some other research in this area. However, the most common type of household comprises just two people. Even if those two are each watching their own HDTV stream, each surfing the web and each having a video call all simultaneously, then (in part thanks to the impact of improving video compression) the total bandwidth (in 2023) for this somewhat extreme use case for that household is just over 14 Mbps.
NBN Co is still “digesting” the Vertigan report, said Morrow. But he said he agreed with the overall conclusion when it came to its assessment of a multi-technology model for the NBN.
“In a nutshell, concluding that the MTM is the more economical approach to do is logical to us,” the CEO said.
An MTM approach is the quickest and most cost-effective way to reach Australians, he said.
“If money and time were not a critical concern, we wouldn’t need this type of flexibility, but the fact is that time and money are at the forefront of our minds, as they are with our minister, shareholders, with our board and with the Australian taxpayers.”