Tuesday, April 7. 2009Will The Ill Wind Of The 'NBN' Blow Anyone Any Good?......John Linton ...apart from people who dig trenches? Well, on that basis (and realising that it really didn't matter who was going to manage the project) I bought some Leighton's shares over the last few days and have made a handsome profit as I figured that many people would pick Leighton as one of the beneficiaries of billions of dollars worth of trench digging round Australia and in any event their shares were pretty low and their past dividend policies pretty solid so it wasn't much of a risk. I also figured that with a realistic sized network already they would be a hot favourite to expand it to provide part of the backbone for the proposed network (rather than starting to build yet another set of trenches). Scattering around $A20 billion dollars over the coming few years can't do any harm to the people who get some of it though most of those will be multinational equipment manufacturers and 'consultants'. Companies like Leightons will get a fair bit of "construction work" and a fair bit of that will be in regional and rural areas so the old FDR 'work for welfare' concepts will get another run after 75 years - though the concept of out of work and unemployable merchant bankers trying to wield a pick and shovel in the blazing sun of an out back summer before returning to their mug of soup and their bed roll under a Coolibah tree is a bit hard to get your head around. And then, of course, there's Telstra.....what will become of Telstra if some entity builds a brand new national data network? I guess they'll still have telephone calls and copper lines to make them over. New CEO due within three months and, hopefully, a new chairman and a major board shake up together with some 'policy reversals' will make for an interesting month or so mid-year. Telstra has been brought to the brink of a true turning point in communications delivery in Australia by the American carpetbaggers who plunged this country in to communications hell based on their personal greed and woeful knowledge of the Telecommunications ACT and Australian politics - at least they've all gone back home now (or almost) with their ill gotten gains leaving Australia both financially and service delivery poorer. So the 'brave new world' remains a shimmering mirage but after a year long delay Stupid Stephen gets to become the scapegoat for whatever now happens - I was wrong - I didn't think he would last past September 2008; now who will Krudd appoint as ambassador to the Holy See? Can anyone really see him controlling a national infrastructure build? Maybe he is off to Rome after the announcement of whatever it is? I was going to take some time away from residential communications based on the hiatus that would ensue once the 'NBN' was given to some entity to make happen as I figure that very little will happen anywhere in communications Australia until the 'final selection' has some time to announce its implementation schedule and whatever legal issues arise from that are dealt with in the various courts - my guess was nothing much would happen for 12 to 18 months and I could do other more useful things while that reached some form of conclusion. That still seems to me the best thing to do and much of the work that we have done in residential plan re-positioning over the first three months of this calendar year has been based on those premises. We still have to resolve what we do in Tasmania - but that's almost done as long as the Government gets the money to build its own network as part of the NBN and get rid of Telstra completely - and we will continue to build out the Australian network based on whatever growth (or non-growth) occurs over the remainder of 2009, The main thing is the build out of the VoIP capabilities and the ongoing development of SMS and FAX and, of course, our continuing attempts at finding a way/ways of more rapidly growing HSPA and mobile. Personally, I need some time to devote to other things after spending virtually every waking second of the past five years thinking about how to keep Exetel alive and then continually growing in the various residential marketplaces we address. I have never been particularly comfortable outside the larger business marketplaces and I'm pretty sure I have no more to add to 'residential strategies'.....at least not until I recover some 'freshness' in thinking and also some interest in understanding how/if a small Australian communications company has any place in the "new Australian communications marketplaces of Krudd's grand plans" (perhaps that should be Krudd's grand back of the proverbial bus ticket scribblings). Perhaps Telstra will now become more reasonable to deal with - yes, I know.....and pigs might fly...but maybe the prospect of being 'broken up' will cause some re-thinking along the lines of "what if we had a wholesale operation and no-one came"? I realise that it is well beyond the boundaries of current fantasy but in these "Krudd's New Deal" reincarnation days it might just be possible. Who knows - perhaps there will be a sensible wholesale/retail communications market in Australia where variety and innovation replaces mediocrity and "me tooism"? What was that pink thing that just briefly obscured my window? Trackbacks
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Looks like the government is going to go it alone with FTTH (yes home) NBN.
I wont hold my breath. Comment (1)
Yes: http://business.smh.com.au/business/broadband-gets-go-ahead-20090407-9v8m.html
Can't work out if it's a good thing or not... Comments (2)
In news of the government rejecting all tenders and opting to create "the next Telstra" - I think you may be onto something JL, Telstra just might become a reasonable company to deal with in fear of death... or then again, they could just write off the copper network entirely.
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John
it appears that Krudd, Whine and Stupid have done exactly what what O'Brien has described. The have pulled the biggest piece of political drama to get all the players jockying for a piece of the NBN but looking silly while they did it, and then the Government has been able to get what they really wanted all along. A separate entity to build the network, and now it will be FTTH and we don't need Telstra's copper at all. But all the players still get to be partners if they want, so it is a win win (apart from the time delay involved) Comment (1)
hmm just read through the article on abc.net.au/news. 90% of households etc etc. that leaves just enough fluff factor to leave tasmania off the fibre map completely. good thing for aurora. how's that going JL?
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We have agreed terms and are now waiting for an activation date.
Tasmania looks like being first to benefit from the new network - via the Tasmanian Government bid. Comments (7)
From what I read on the Government's site... they say that FTTP will be installed for towns of 1,000 or greater.
They are also continue to commit to the over minimum of 12Mbps to 98% of the population... and if they are using satellite, they can probably achieve that to 100% (even though satellite sucks). Now, if I remember correctly, just under a decade ago, Microsoft said they wanted to launch a low-earth-orbit (LEO) satellite broadband network. This was going to cost around USD$50bil and service the entire world. LEO has the added advantage of being very close to the Earth's surface and suffering much lower latency. Maybe this would be an idea now the Government looks to be committing $43bil. Comments (3)
I believe this is the kind of decision the Libs would not have had the courage to make.
I know that I walk into the lions den to say this however, I believe that Australian Internet will be far better off in the future from this decision than the bloody great mess with Telstra at the helm, driving us ever closer to the internet backwaters of time. John - yes / no answer. Do you see merit with what the Govt has proposed? Comments (2)
Well...let's see...a few problems spring to mind:
1) Duplicating Telstra's national network will take some pretty nifty legal twisting anf turning and some signiicant money to appease the shareholders of Telstra. 2) The government has no money to build anything. 3) The government has no competence to build anything. 4) Legal issues alone are going to make a start date problematical. 5) Assisting a State Government try and put Telstra out of business in Tasmania is a tricky constitutional question. 6) .....fill in until you get tired. However......"creating 47,000 new jobs" (not 48,000 or 45,000 or even 50,000" is the sheerest nonsense - how can there be sucha precise estimate when there is no rollout plan? Similarly the precisely costed figure of "$A53 billion" is similar total BS. What happened was this: 1) Only Telstra could ever have built an 'NBN'. 2) Telstra/Krudd screwed that option up. 3) Afetr 18 months they had no way of building their $A4.7 billion 'NBN'...it was always impossible. 4) They made the stupid announcement this morning based on: ABSOLUTELY F****ING NOTHING...and only because after 18 months of nonsense they had to face the music and agree with the rest of the world that thier "NBN Tender" was a complete farce. Maybe I'm wrong but when Krudd quotes such precise figures before a single decision has been made you HAVE to know he's lying, yet again. Where's the 75,000 jobs created by his Christmas hand out? NOWHERE - NOT ONE. Krudd is a pathetic piece of political dross who simply lies because he has proven for two years that Labor voters have no intellectual ability to even look at the few words of the sound bites and realise they are simply plucked out of where the sun don't shine. Comments (7)
Would you prefer that Telstra dictates what happens with Australian broadband
-since the old worn out liberal govt gave telstra total control of what happens in Australian broadband by way of selling out their their controlling 51% interest and the only chance they had at influecing this evil monoply. Sorry, the libs failed badly even when they where holding a winning hand, with regards to having any influence at all over Telstra as they looked to destroy any competition to them in AU. Anytime a sitting prime minister is voted out at federal election you know he is totaly out of step with what the people want. Comments (2)
Why will they have to give Telstra any money- Telstra has no mandated monopoly, and for FTTP they are (potentially) not using any Telstra infastructure.
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will exetel boycott the NBN and go 100% HSDPA john? Can't wait to hear what sort of deal STUPID STEPHEN offers exetel
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I wonder where the market for VOIP will go now, assuming that everyone reselling NBN will offer free fixed line calls and dirt cheap mobiles, if the NBN does ever "exist"?
good thing to see you are maintaining the rage. Comments (2)
Why boycott anything yet. The FTTP won't even be started for at least 12 months... there needs to be a plan first. And won't be finished for a very long time.
HSDPA could provide bandwidth close to 100Mbps anyway within a few years. Not the worst option and 100% population coverage could be achieved by an order of magnitude less than a FTTP project. On the bright side, I would love to have a FTTP rollout in Australia. I would love to have access to it at home. It would put Australia back on the map again in terms of technological superiority. There are quite a few services I would like to offer to home users, but they require symmetric speeds of greater than 30Mbps. If this could be offered to 90% of Australian homes and be inexpensive for Australian-only (even intra-state) traffic at full speed, things could get interesting. Single cable offering TV (approx. 3 x 1080p streams), phone and high-speed Internet. A truly next generation network. Comments (3)
Check out this link announced by Krudd today:
Regulatory Reform for 21st Century Broadband http://www.pm.gov.au/media/Release/2009/media_release_0904.cfm It's being sesigned to talk about: The Regulatory Reform paper canvasses a range of options for reform, including: streamlining current regulatory processes, by allowing the ACCC to set up-front access terms for companies wanting access to Telstra and other networks; strengthening the powers of the ACCC to tackle anti-competitive conduct by allowing it to impose binding rule of conduct when issuing competition notices; promoting greater competition across the industry, including through measures to better address Telstra’s vertical and horizontal integration, such as functional separation addressing competition and investment issues arising from cross-ownership of fixed-line and cable networks, and telecommunications and media assets; improving universal access arrangements for telephony and payphones; and introducing more effective rules, requiring telephone companies to make connections and repairs within set time-frames. Maybe you should give them your 2c worth John! Comments (2)
God no.
I have only been waiting for this announcement/non-announcement so I could take some time away form such stupidities. Comments (7)
Nice to see labor getting rid of efficient non-government jobs for very inefficient government jobs. Be good if we had any money. Be good if it wasn’t Telstra 2.0. Aussies have a thing about making the same dumb decisions. Labor for example. They get voted in by the workers and the workers lose their jobs.
Shame! Unfortunate for companies like TSN which have been cheaply building their own network. Governemnt is going to waste so much money. This service will be a rip off due to the frucking debt. Comment (1)
If the Government spends $43 billion dollars to build the FTTH network and prices access cheaply then maybe this new network they own will not be worth anywhere near what it cost to build.
Telstra wanted 18% return on funds invested to build one. If the new network makes 8% who will buy it for top dollar? The place to be is a wholesaler NOT an owner. Comment (1)
Hopefully the Australian government plans to actually subsidise the capital expenditure involved in building the network. If that $43 billion is in today's dollars and you assume about 10 million Australian homes, that's about $4,300 per home for connectivity. Paid for over 20 years (assuming no interest) would come out to $18 per month, just in network build. If you assumed a 3.5% interest rate on these funds, this figure would be around $25/month over 20 years.
The Government also states that there will be 20,000 new jobs created ongoing for this new network. Assuming the average salary of $50,000/year plus super, that's another $9 per month that needs to be added to the direct costs. So, before you've even added International transit, local peering exchanges, premises, marketing, maintenance equipment costs, upgrades or profit margin at all, there is at least $34 per month (in today's dollars) that needs to be found just to justify the build of this network. And that assumes a 100% take-up rate of this service. Comments (3)
Your ball park figures are based on the uncosted estimates and unknown durations 'winged' by Krudd as an attempt at face saving the fact that his sound bite election promise could never have been delivered.
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