NBN 101: Is Australia's NBN world class?
- 17 May, 2010 14:07
This article is part of Computerworld Australia's NBN 101 series, in which we take a look at the arguments surrounding the fibre-to-the-home network, and dissect them one by one. The articles are meant to be an overview of the debates central to the NBN to give you a grounding as more and more media outlets and commentators speak out on the project. And we encourage people to take the discussion further in the comments section.
Some have called the proposed fibre-to-the-home (FTTH) national broadband network (NBN) "world class," but how far ahead of the rest of the world is Australia? For those who haven't heard, the network will provide committed speeds of 100 megabits per second (Mbps) to 90 per cent (possibly 93 per cent) of the population, as well as at least 12Mbps to most rural areas of Australia through fixed wireless and satellite services. Given Australia's geography and the speeds its more remote constituents have had to deal with currently, it certainly seems like an ambitious project.
But is it world class?
As part of the recently released NBN Implementation Study, co-authors KPMG and McKinsey & Company pitted the NBN against fibre networks around the world, including South Korea, Japan, Sweden, the United States, Singapore, Portugal, Malaysia and New Zealand. Add to that global figures from the Organisation for Economic Cooperation and Development (OECD), and suddenly Australia's proposed network doesn't seem so revolutionary after all.
A top-down look
Let's start from a global perspective. Below, you'll see a graph visualising FTTH availability in several countries around the world in the middle of 2008.
See Australia? No? That's because, in 2008, the OECD couldn't quantify the amount of fibre access Australian homes and businesses had. Sure, there's always talk of dark fibre rolled out by the likes of Telstra and companies along residential streets and in greenfield estates – and there are some providers who have fibre backhaul networks and some organisations have rolled out their own fibre - but while ever the fibre remains dark (ie. with no retail service), it remains inaccessible to most of the population.
(See all of the OECD stats and graphs on broadband in our slideshow)
Since 2008, things have shaped up slightly - fibre pilot services conducted by iiNet, Internode and Telstra have given hope of 100Mbps to a lucky few in Point Cook, Victoria, and the stage 1 NBN trial sites in Tasmania are likely to see the first services opened in July this year. However, the fact of the matter is, in its current standing Australia continues to drag down the OECD average which is currently, and continues to be, buoyed largely by Japan's hideously comprehensive fibre coverage.
Things will obviously change once the NBN is completed in eight years' time, but that won't stop the rest of the world from catching up and, in some cases, excelling far ahead of us. Here we compare countries using data provided in the Implementation Study as well as the OECD, namely:
- A country's total broadband subscribers (over 256Kbps), as at June 2009
- The average advertised retail price per megabit in each country, as at June 2009
- The average advertised speed of broadband offered, as at June 2009
- Fastest advertised broadband speed, as at October 2009
- Historical broadband penetration, Q4 2001 to Q2 2009 (where available)
- Availability of FTTH services to homes, as at December 2008
- The proportion of FTTH subscribers to total broadband subscribers, as at June 2009
South KoreaTotal broadband subscribers (2009): 15,938,529 Average price per megabit (2009): $US1.30 per month Average speed offered (2009): 52.7Mbps Fastest advertised broadband speed (2009): 100Mbps Broadband penetration growth: 14.1 per cent (2001) to 32.79 per cent (2009) FTTH coverage (2008): 67 per cent FTTH portion of broadband subscriptions (2009): 46 per cent
South Korea has boasted the highest market penetration of FTTH services for some time and, though Japan is catching up, it might hold that crown.
The government has poured $US70 billion into the FTTH network and other broadband infrastructure there and an additional $US1 billion provided for regional coverage. It also provides direct subsidies, tax breaks, research funding and stimulus programs that all help to better Internet access for the population, making it clear why South Korea is the place to go when it comes to Internet.
Given more than 80 per cent of the population live in high-density housing, it was certainly cheaper for the country's major telco, Korea Telecom, to roll out fibre than in most other countries. According to the NBN Implementation Study, building owners also control the internal connectivity, giving more open access to service providers other than Korea Telecom, and affording it a more competitive landscape that ultimately benefits the user.
While DSL and cable still have a play in the market, the majority of the country is moving towards a completely fibre-based solution, with speeds of 100Mbps or more. Don't forget: That's available now, not eight years down the track.
JapanTotal broadband subscribers: 30,927,003 Average price per megabit (2009): $US3.31 per month Average speed offered (2009): 107.7Mbps Fastest advertised broadband speed (2009): 200Mbps Broadband penetration growth: 2.3 per cent (2001) to 24.2 per cent (2009) FTTH coverage (2008): 86.5 per cent FTTH portion of broadband subscriptions (2009): 51 per cent
When anyone thinks next-generation Internet, Japan inevitably springs to mind. While it runs second to South Korea in some respects, the country has ambitiously set targets of 90 per cent fibre coverage for this year, and ubiquitous coverage by the same time next year.
NBN-like speeds of 100Mbps are already common, 1Gbps is easily accessible, and telcos are well on their way to retailing 10Gbps and, eventually 160Gbps services. These speeds don't come cheap, but they're widely available.
Operating off the back of the fibre network built by Japan's incumbent telco, NTT, service providers are granted open access to customers, with the Government subsidising FTTH costs by up to 33 per cent. Since NTT, like Telstra, offers retail services on the back of its wholesale network, it retains a majority market share.
SwedenTotal broadband subscribers: 2,915,000 Average price per megabit (2009): $US18.13 per month Average speed offered (2009): 23.7Mbps Fastest advertised broadband speed (2009): 100Mbps Broadband penetration growth: 4.4 per cent (2001) to 26.7 per cent (2009) FTTH coverage (2008): 10 per cent FTTH portion of broadband subscriptions (2009): 21 per cent
Swedish municipal governments have been building fibre around the country for 16 years now, with more projects being run by city councils rather than private companies or the national government. The result is a vibrant - if confusing - marketplace in which hundreds of service providers vie for attention and customers to sign up to Internet services as fast as 1Gbps.
The Australian NBN Implementation Study reports take-up of around seven per cent for FTTH services, with total network coverage of around 20 per cent; double that of the OECD's reported 10 per cent the year before. While low, some lucky few get insanely fast Internet; the 80-year-old mother of Internet engineer Peter Löthberg, who boasts access to a 40Gbps connection. Now that's next generation broadband.
The United StatesTotal broadband subscribers: 81,170,428 Average price per megabit (2009): $US8.06 per month Average speed offered (2009): 14.6Mbps Fastest advertised broadband speed (2009): 50Mbps FTTH coverage (2008): 13.1 per cent FTTH portion of broadband subscriptions (2009): 6 per cent
The United States, like Australia, is mired in years of oligopolistic activity and unclear regulations for the national watchdog, the Federal Communications Commission (FCC). The market isn't particularly clear either, with both cable operators and traditional telcos vying for slices of the same pie through a mix of DSL, cable and fibre-based services.
Commercial fibre roll-out got the official green light in 2004, with major operators Verizon and AT&T building competing fibre networks. Verizon's FiOS FTTH network offers speeds of up to 50Mbps - half the 100Mbps promised for the NBN - while AT&T's U-Verse uses fibre-to-the-node (FTTN) VDSL deployments instead, with speeds of up to 18Mbps. For the record, some have claimed Telstra could switch on a similar VDSL network if the telco lit up its dark fibre.
While boasting the world's most broadband subscribers, only 15 per cent of US homes have access to a FTTH network.
The US instituted its "national broadband plan," early last year, with a commitment to provide 100Mbps download speeds for 100 million households by 2020, and 1Gbps access for local institutions. The plan also commits to becoming the world leader in wireless networks (a claim currently held in most respects by Telstra), a nationwide wireless safety network for emergency services, and the ability for users to track and manage real-time energy consumption through broadband.
The monopolistic nature of Verizon's and AT&T's fibre networks has raised similar concerns to those facing Telstra, with the FCC attempting to clamp down on net neutrality and boost its own regulatory powers.
PortugalTotal broadband subscribers: 1,809,354 Average price per megabit (2009): $US4.28 per month Average speed offered (2009): 103.7Mbps Fastest advertised broadband speed (2009): 1Gbps FTTH coverage (2008): None FTTH portion of broadband subscriptions (2009): 0 per cent
Portugal's broadband market has largely been dominated by ZON Multimedia's DOCSIS 3.0-capable cable network, providing speeds of up to 200Mbps.
While fibre wasn't a blip on the radar in 2008, ZON Multimedia's former owner, major telco Portugal Telecom, began rolling out its FTTH network to compete with cable. It was soon followed by Sonaecom and several smaller service providers, all offering competing fibre networks and various IPTV services as points of differentiation.
While the Portuguese Government is yet to commit to a single, consolidated broadband network, it has committed EUR 900 million of funding to various providers to help establish next-generation broadband networks.
The OECD doesn't provide broadband statistics for Singapore as it is not a member of the organisation, but the study's brief look at the country's Next Generation Nationwide Broadband Network is an interesting one, particularly as it has ties to Australia's own.
The Singapore Government announced plans to roll-out a nation-wide FTTH network in 2005 using $1 billion in funding with aims to provide 1Gbps services by 2012.
Construction began in 2009, with plans to reach 60 per cent coverage by the end of this year. One key aspect of the implementation - and one highlighted by the implementation study - was the vertical separation of the network's fibre infrastructure and active equipment portions. These were tendered to two separate parties - the network is controlled by a consortium led by Singtel (owner of Optus in Australia), while StarHub controls the active infrastructure, Nucleus Connect.
Singapore is naturally a much simpler roll-out case considering its relative size to Australia, but the ambition to have 1Gbps up and running by 2012, and the idea of utilising the expertise of existing major telcos like Singtel are certainly key takeaways for Australia's own network.
Again, the OECD does not have anything on Malaysia when it comes to broadband statistics as it is not a member, though the government has been ambitious in setting a target of 75 per cent fibre coverage by 2011. This has since been revised to 50 per cent in 2010 and, as the NBN Implementation Study points out, the country has only managed to reach 20 per cent of the population at time of writing.
Nevertheless, the country continues to plan delivery of speeds up to 10Mbps to 14 percent of the Malaysian population by 2012 through both FTTH and FTTN deployments, with faster 100Mbps and 1Gbps speeds foreseeable down the track. Fibre take-up will likely be slow over the coming years, with DSL remaining the prevalent broadband connection for most users. Those who don't receive a fibre connection will get broadband speeds of up to 4Mbps through DSL and WiMAX deployments.
The regulatory concerns are akin to those in Australia: Namely, service providers complain that the successful tenderer for the network, the government-run Telekom Malaysia, holds a near-monopolistic control over the network, which they believe has a direct link to the slow take-up of services around the country.
New ZealandTotal broadband subscribers: 980,649 Average price per megabit (2009): $US4.80 per month Average speed offered (2009): 17.8Mbps Fastest advertised broadband speed (2009): 24Mbps FTTH coverage (2008): None FTTH portion of broadband subscriptions (2009): 0 per cent
We think we have it tough here; according to the implementation study, our neighbours across the Tasman have wallowed in the bottom third of OECD countries in terms of broadband access for some time. Things have improved since 2006 thanks to changed regulatory practices in dealing with the major telco, Telecom New Zealand, as well as competition from Telstra's subsidiary, TelstraClear.
New Zealand got on the nationwide fibre bandwagon at the same time as Australia, with the government announcing $1.5 billion investment and further private sector funds to build a 100Mbps fibre network for 75 per cent of homes by 2019. The remainder will receive a sliding scale of between 10Mbps and 1Mbps depending on how regional they are. The network will be built through public-private partnerships and off the backs of existing dark fibre, though whether Telecom New Zealand will make an appearance remains up in the air.
No wonder enthusiasts across the Tasman are excited about Pacific Fibre's announcement to install a new cross-Pacific backhaul cable.
Is Australia's NBN really world class?Total broadband subscribers: 5,356,000 Average price per megabit (2009): $US15.24 per month Average speed offered (2009): 21.8Mbps Fastest advertised broadband speed (2009): 100Mbps FTTH coverage (2008): None FTTH portion of broadband subscriptions (2009): 0 per cent
Though the OECD recorded 5.4 million broadband subscribers in Australia, the Australian Bureau of Statistics reckons this is closer to 8.2 million as of December last year, and it's rising quickly. The OECD's average price per megabit of $US15.24 per month is ridiculously expensive - that's $AU406.17 per month for a full-speed 24Mbps ADSL2+ connection - though the one million remaining dial-up subscribers and continuing prevalence of low-speed broadband is probably skewing those results.
Nevertheless, it's safe to say that Australia isn't at the top of the heap when it comes to broadband availability and speeds and, even with the NBN, it's likely that most other countries will be much further along in eight years when the network is finally completed.
The 100Mbps figure in the NBN seems to be the magic number with countries traditionally lacking in a consolidated approach to Internet services, and although many here are preoccupied with a debate over whether we need the speeds, the worldwide consensus says that's the next step. As we continue to adapt to faster Internet speeds and develop more capable applications to take advantage of those, NBN Co chief executive officer, Mike Quigley's claims of demand for 1Gbps will seem more likely.
Australia isn't alone when it comes to concerns of regulation or monopoly either, though some other players seem at least marginally more successful in managing that issue.
Put simply, while the National Broadband Network is an important facet of the Australia telecommunications industry, we are by no means alone in our endeavours, and the types of access some countries already boast can be a humbling experience. With countries racing to beat each other to the next landmark in broadband speeds, though, the NBN or a high-speed network is ever more important in ensuring Australia becomes competitive, both economically from a data-centric and online services viewpoint, on the global stage.
(See all of the OECD stats and graphs on broadband in our slideshow)
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