Telco analysts say Coalition broadband plan tricky but achievable

The Coalition has formally announced its alternative broadband plan, a $10 billion deal that would involve a mixture of fixed-line, wireless and satellite services that would combine funding from both the Government and private sectors.

But telecommunications analysts have warned that combining technologies – especially in 2013 when much of the National Broadband Network infrastructure will already be laid out – will be harder than first imagined.

The criticism comes as Communications Minister Stephen Conroy has overseen the connection of the NBN Co. test site in Melbourne’s northern suburb of Brunswick.

“This deal isn’t really all that different to what Turnbull’s been saying,” says Telsyte director of research consulting Chris Coughlan.

“There are pretty much two scenarios for the next election, and one is that the existing government continues with the NBN as it is, and the other is that we have the Coalition come in.”

But Coughlan says unwinding the NBN and introducing new technology will take just as long as it did to introduce agreements and policies to have the network constructed in the first place.”

“All of that legislative process of renegotiating the Telstra agreement, and so on, that will take as long as the current Government which is almost, or more than, a term. Essentially what we could have is that infrastructure in Australia is stalled yet again.”

Turnbull announced yesterday the $10 billion plan would first upgrade existing networks in major capital cities. Rural areas would be connected through wireless and satellite services, while those in outer metropolitan areas would be serviced by the private sector.

Telstra would still be separated, and its wholesale arm would join others working to upgrade its networks to up to 24Mpbs within two years. Existing HFC speeds are promised to reach up to 240Mpbs.

Rural areas would also be eligible for subsidies and grants, based on location. Existing National Broadband Network infrastructure would also remain intact, sold to private companies.

“The melancholy truth is that more than 75% of the cost of this network is civil works,” Turnbull said yesterday. “Plainly, if you can use some of the existing fixed-line local access network, you can reduce those civil works considerably”.

The plan is similar to the Coalition’s previous policy, which would have provided wireless and satellite services to much of the population.

While many users would only receive speeds of up to 24Mpbs, Turnbull argued yesterday that cost is more important than speed, given that more users would be able to connect to the network faster than through the NBN.

Ovum research director David Kennedy says the plan is achievable, and is “more or less what I would have expected from an alternative to the Government’s plan”.

However, he warns that while the rural and metropolitan areas are covered in the plan, “the tricky bit is the part in the middle”, such as outer suburban areas which won’t be covered by existing HFC cables.

“That’s where you may be relying on fibre to the node and so on. That would require some sort of deal with Telstra, which is the hard point. It would be easy for the Government to provide the money, or at least part of the money for a fibre to the node upgrade.”

“But the other issue is that the Coalition still wants to accomplish a structural separation of the access network.”

However, Kennedy says that achieving a new deal with Telstra is far easier now that the company has agreed to an agreement already with Labor.

“They could legislate, or negotiate, but I think the negotiation route could work.”

Coughlan says separating Telstra would ensure “a level playing field”.

“They’re talking about mixed technologies at the moment, but the issue is how you get that mix to work. That’s the critical part of achieving anything.”

Stephen Conroy has attacked the plan, calling it “economic vandalism”.

“You cannot deliver those speeds on a single copper to the home. The vast majority of copper to the home in Australia is a single copper; Malcolm wants to lock us into a 13[Mbps] world,” he said. “We won’t even bother talking about upload speeds. He’s trying to pretend they’re the same but he’s not acknowledging that the technology that you need for the type of speeds he is claiming doesn’t exist in Australia.”

Conroy launched the Brunswick test site for the NBN in Melbourne this morning.