Australian satellite operator IPSTAR is likely to become one of several sub-contractors to Optus under a deal to provide interim satellite services under the National Broadband Network (NBN).
The Australian reported this week that Optus had signed a deal last week with network wholesaler NBN Co to become prime contractor of third-party satellites for provision of the interim services.
Neither Optus or NBN Co would comment on the speculation, though an NBN Co spokesperson confirmed negotiations were at advanced stages and the results would be announced “soon”.
The interim services would replace the $325 million Australian Broadband Guarantee (ABG) instituted by the federal government in 2007 to subsidise satellite or other wireless internet services to Australian premises unable to receive a minimum standard.
The services would effectively become a placeholder while NBN Co progresses with plans to launch two Ka-band satellites by 2015, a $1 billion project that would ultimately serve three per cent of the Australian population - or approximately 600,000 premises - under the NBN.
While Optus operates a number of local satellites under the ABG, and last year began offering six megabit per second (Mbps) speeds, it is believed the wholesaler is attempting to reach services closer to the 12Mbps speeds it would have to deliver under the final services form 2015 onwards.
The wholesaler has also begun looking at ways to clarify the average satellite speeds users could expect, based on current ABG guidelines that indicated users would receive 65 per cent of the peak speed 85 per cent of the time.
Wireless consultant Reg Coutts told Computerworld Australia that the Optus deal, which had been in negotiations for approximately six months, would likely involve Optus retailing satellite services provided on a wholesale basis by IPSTAR and other third party satellites where IPSTAR has poorer coverage.
The provider is itself in negotiations with NBN Co, but is yet to sign a contract directly with the government enterprise.
IPSTAR was unavailable for comment at time of writing.
Services to restore satellite faith
Coutts argued that Australians as a whole had decreased demand for bandwidth speeds over current satellite offerings, compared to ADSL and wireless services, as a result of “tarnished” experiences.
“In part that’s been because of the tricky mixed performance of satellite delivery in Australia,” he said.
In particular, NBN Co would need to assume the responsibility to subsidise installation and subsequent access to satellite services by rural communities in the interim period, an aspect currently handled by the federal government until the ABG is discontinued at the end of June. The current scheme provides subsidies worth between $2500 and $6000 per customer.
“One of the problems with the ABG was some providers took it as a way of subsidising the installation and pocketed the money so to speak, and didn’t provide particularly good broadband services,” Coutts said.
“The aim is to subsidise the installation but also subsidises the bandwidth.
“If they can get that down, tha twill promote usage and demand.”
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