Tuesday, January 27. 2009Will HSPA Replace ADSL? (Part 1)John Linton I have been asked this question on an increasing number of occasions since Exetel has made no 'moves' to offer ADSL2 via the Telstra network as some other ISPs have done as the two issues appeared to be linked in some of our customer's minds. The decision not to attempt to negotiate an extension of Exetel's current Telstra Wholesale contract for the supply of ADSL1 customer connectivity to supply ADSL2 had nothing to do with our views on the likely future of HSPA - the two 'decisions' were entirely separate. We decided not to provide ADSL2 via Telstra because we didn't see where we could add any value to that service and it would therefore breach our base reason to be in business to produce a 'me too' offering that was no different to those already offered by BigPond and the 'independent' ISPs that had signed extensions of their ADSL1 contracts. With 5 (or whatever the exact number of companies it actually is) all offering the Telstra service from the same exchanges what possible value could there be in adding a sixth or seventh or however many will eventually provide that service? Now you may, quite rightly, point out that Exetel already offer ADSL1 based on Telstra's network so that/those statement(s) is/are contradictory. True enough - but when we started providing ADSL1 services some five years ago the 'rules' were very different and it was, relatively, easy for us to see that we, as a start up company, could buy at Telstra's ridiculously high prices and still differentiate the end service over time sufficiently to make a relatively clear cut set of service advantages. We were in fact able to do that over the first two years but then progressively lost that ability as Telstra Wholesale firstly changed its top management and then 'elasticised' its pricing parameters to the companies with which we competed. If I had known then what subsequently became the case I would never have signed the original ADSL1 contract and would have approached the communications marketplaces very differently and with very different services and products. However they are mistakes of the past that I made with the knowledge (or as it subsequently turned out - the lack of knowledge) I had at that time and that mistake can just be added to a long list of mistakes I have made throughout my career. So, Exetel's decision not to sell Telstra's ADSL2 was based on the information we had at the time, a few months ago, and our desire not to further entangle ourselves with a supplier whose CEO's publicly expressed view is that "wholesale customers are parasites". Not a lot of dignity in metaphorically 'tugging your forelock' and kow-towing to people who regard you with such overt contempt and disgust while taking huge amounts of money from you - pretty demeaning when you think about it. Will HSPA replace ADSL2 as the broadband of choice throughout Australia? Almost certainly not at the 'higher end' user level. Almost certainly at the 'lower end' user level........with a couple of, perhaps three, provisos. Currently, Optus HSPA network delivers an average of around 1.5 mbps down in many areas of Australia and Optus continues to increase the coverage continuously. Over the next 'little while' it will become pretty safe to say that 'most' areas of Australia will get 2 mbps plus down and somewhere close to 1 mbps up as Optus increases the overall base technology to 7.2/1.1. (at our North Sydney office we can currently get better than 4 mbps down and 1.1 mbps up). Far more than 60% of Exetel's regional and rural users have ADSL1 at speeds of 1500/256 or less and they average using less than 2 gb of data downloads a month. Now it's certainly true that Telstra targeted these customers over the past two years offering them ADSL2 at heavily discounted prices via their never ending succession of "special promotions" and we have certainly lost a fair number of customers to those approaches. It's almost certainly going to be true as more ISPs sign up to re-sell Telstra's ADSL2 that we will lose some more - those that believe that "ADSL2 speeds" are of benefit to them. We would believe that, if we could find a way of providing an HSPA modem at "no charge" (one of the provisos) then the majority of these current customers that have already rejected Telstra's targeting for over twelve months would be almost certain to accept an offer from Exetel of higher speed broad band at lower monthly charges while keeping all of their current Exetel broad band add-ons. If those same customers could bring themselves to 'trust' VoIP and get rid of their current telephone number (the other proviso) then they could add the compelling additional benefit of eliminating the current cost of their telephone land line and the undoubtedly rip off telephone call charges that go with it. Currently Exetel pay far too much for HSPA data to allow this scenario to be put into effect for services above 10 gb per month. We would expect that, over the coming 6 or so months that HSPA data costs will fall but we can't begin to estimate by how much. The only reason that we expect them to fall is that we have firm pricing for HSPA data in the EU which is about one third of what we currently pay to Optus and that was before the current recession hit Germany and the UK which has prompted fresh contact from our UK friends saying they can now offer better pricing than they did last August. If Optus, or some other carrier prepared to offer Layer 2 HSPA, continues to develop the speeds and sensible capacities of HSPA beyond 7.2 mbps and continues to reduce the data costs (the third proviso) then the HSPA replacement of wire line broad band becomes ever more compelling and 'reaches further up' the layers of the current ADSL1 user base. HSPA never has to reach the theoretical "20 mbps" speed of ADSL2 because in regional and rural areas that will never be achieved but HSPA may well, in the not too distant future, actually deliver download speeds greater than those actually achieved by ADSL2. In the mean time speeds sufficient for streaming video are already 'nearly there' and will be a reality before mid 2009 in all probability. I really do think that HSPA will replace wire line broad band for users of less than 10 gb a month everywhere in Australia over the next 17 months (given the 'provisos' I stated). Trackbacks
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What about businesses in rural areas? My old man has offices in Walget, Moree and Armidale that could really benefit for ADSL2 speeds.
He has a VPN between the offices and I am implementing some VoIP services for him (using Exetel of course). At the moment it should be ok to do at ADSL1 speeds but if his offices expand much further he will have to get multiple ADSL1 services at the offices, or at a very last resort buy ADSL2 from another company. Comments (2)
I obviously can't be sure but I tend to doubt that Telstra's ADSL2 in those areas will be that much faster than their 8192/384.
Of course, if ADSL2 is going to be required then it will have to be Telstra. (I don't see "NBN" being a solution any time soon). Comments (7)
Well, most country towns ive been through have the bulk of their businesses situated in the centre of town (where funnily enough, the telstra exchanges and post offices are). So unless their lines are terribly worn, businesses should be able to achieve pretty good speeds in my opinion.
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Speeds are dependent on the total path from the end user to the exchange to the POI - not just from the end user to the exchange.
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I think Exetel has great HSPA plans except for the excess usage charges. I realise these may be outside your control.
Why is it that all the providers give you a good deal on the first gig or two then screw you for any excess? Seems like you need to really know your usage in advance as pay as you go is frowned upon. Is there a technical reason or is this purely a marketing exercise by the wholesalers to maximise profits? Comment (1)
I really don't know what reasons apply to any carrier's pricing decisions - they have seldom been understandable by me.
If I had to hazard a guess I would say that their is some insane desire by so many marketing people to try and make everything look "free" and therefore they go to great lengths to mislead the 'general public'. I really don't know. Comments (7)
HSPA overtaking ADSL speeds is also true in some parts of metropolitan Sydney. Mum & dad live about 3.5km from the Epping exchange, meaning they can barely eek out 3-3.5Mbps on ADSL2+ (they're currently with iiNet). HSPA today is already not far behind that! The only benefits to sticking to ADSL2+ is the lower latency for gaming which they don't really do.
Comment (1)
I was going to deal with the various line quality issues tomorrow - you are quite correct - using land lines will always inconvenience some users of ADSL2 and, of course, those people on rims.
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Compared to a blog a few weeks back discussing HSPA and getting low-usage customers to switch, I think I can detect an attitude shift, even if slight. The reality is there are numerous factors that inhibit giving up the landline. Not a complete list by any stretch, I'd need a central 3G modem/router with wireless to service all devices around the home. I have 3 mobile phones, all basic models, so there's replacement cost to be able to get models with data and VoIP capability. PSTN number portability; the ability to set my home phone DID for VoIP to that of my current PSTN number. Some of this pain I can bear, but Exetel could help too like the DID/PSTN number issue. Removing these obstacles will go a long way to helping with such a the change-over. I'd switch in a flash, however, these things and more would need to be covered off before I could even entertain the thought of raising it with the better half.
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Everything you list is absolutely true.
However we have started the 'gentle persuasion' program and Exetel users have begun to switch from 256k ADSL services and from low usage Unwired services since we made an attractive offer to them. We will, over time, address most of the issues you raise but some things (PSTN/VoIP numbering) is totally beyond our control. Comments (7)
Any idea how www.maxo.com.au and gotalk are able to offer PSTN/VOIP number portability? I'd also like to switch to "Naked" but the wife insists on keeping the PSTN no.
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We have looked in to it before.
We will look in to it again. I agree it would be very helpful. Comments (7)
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