John Linton
Steve and I first seriously investigated using satellite services to provide reasonable data and internet services in regional areas of Australia in 2002 when doing work for another company for a tender to the West Australian Education Department. Since that time we have looked at using satellite connections once or twice a year for various projects and with the Federal Government offering funding assistance of over $2,000 per user most of the economic barriers were removed. However, for various reasons, we always decided it wasn't really suitable at the various times we looked at it.
I've been re-looking at satellite services over the past few weeks having had my interest re-awakened when I was in the UK in July and being surprised at the large number of satellite dishes being used for data communications (as opposed to the ubiquitous SkyTV dishes) in the remote areas where we were spending most of our time. When I returned to Australia I contacted some of the companies I had some previous contact with and also investigated what was happening in Canada and the USA. I had a brief look at the current Federal Government funding schemes which seem even more generous today than when I had looked at them previously.
I suppose the $1 billion or so that has been given to Optus/Elders to deliver higher speed bata services in regional Australia will make satellite funding more problematic in the immediate future as it will accelerate the delivery footprint and put downward pressure on the pricing of 3G data delivery by Telstra, Vodafone and Hutchison as well as Optus which is a better solution than satellite where it becomes available. Satellite has that one overwhelming advantage that its footprint is practically everywhere across the continent and the islands with some latency drawbacks that are pretty irrelevant if there's no financially viable alternative.
The initial costings I've played around with are pretty daunting without a subsidy and it may prove too financially difficult to make it possible on a user pays/supplier finances basis but it's not that far apart on the figures I currently see - preliminary and non-contractual as they are at the moment. The problem for a small company like Exetel is the funding/leasing risk which has to be addressed before more serious investigation of a contract can be done - but it seems worthwhile to invest the time in determining the level of interest that could be generated with the likely major users of satellite services (medical/police/education) which would allow a residential offering to be made at pricing that would generate 'universal' interest of a more compelling nature than exists for the current and proposed regional data services.
Based on what I can see of what's being offered at the moment (and all offerings seem to rely on the government subsidy) nothing currently is terribly exciting and, without the subsidy, is also unaffordable. I guess that's the inevitable result of government subsidies - they promote tremendous financial waste and laziness and there's always a plentiful supply of latter day carpet baggers to use the government provided funds to buy themselves another Ferrari.
I'd like to think we could complete the analysis before the end of October and, if that's positive, start offering the services in early 2008.