Monday, August 30. 2010Wireless Broadband - Where The Market Is Going......John Linton ........but perhaps only very large companies will benefit from these trends. I have always liked the obvious pluses of wireless broadband from the moment it solved my issues in finding a suitable hotel in the wilds of the UK that had a usable internet service some five years ago. In 'those days' the connection in rural England and the wilds of Scotland and Wales was nothing like as good as it is today but you could always get some sort of signal somewhere along the road or in a town which was stable enough for long enough to receive and send mail and do the other look ups that running a small business while you were on holidays required. In the succeeding five years wireless broadband has dramatically improved in coverage, speed and lower pricing in the UK and has done similarly in Australia although it tends to have a 12 to 18 month lag in this country. In the UK when we were there in June of this year the common price point was 12 pounds (pre-paid) for 5 gb and the average speed was around 10 mbps in the rural areas where we spent most of our time. In broad terms it was about 60% of the price and twice as fast as a commonly available service in Australia with wider coverage. I also noticed that, in central London (where you would expect to find the highest contention being a city of some 8 million people in a densely packed area) I could detect no contention whatsoever although the frequency usage must have been massive. (I have always been surprised at the idiots in Australia who maunder on about how "wireless broadband will never have enough spectrum" - how much spectrum do they think is used in cities like Los Angeles, New York and London?). Even a casual reading of the US technology media will 'tell the same story' as does the English language German and Scandinavian media. Only the Australian communications media doesn't report on the developments in wireless broadband in the same positive ways - all you see are articles and opinions that "wireless will never replace wire line broadband" despite the evidence to the contrary in simple statistics like Telstra's reports on the growing number of residences that don't have any sort of telephone line moving above the ten per cent level and increasing at a rate of 2 - 3% a year......among many other indicators. Personally, I don't give the metaphorical 'plugged nickel' about Krudd's insanity of attempting to ruin the Australian communications industry by spending an absurd amount of borrowed money attempting to build something no-one needs and certainly that Australia cannot afford. However it will never exist in my life time so I will never know whether I am right in my view of such crass stupidity. For a while I was, mildly, concerned that a political cover up, apart from further bankrupting the country I have chosen to live in, would slow down the deployment of wireless broadband but, if anything it has actually increased the roll outs by both Telstra and Optus and significant increases in both average speed and stability of signal. http://www.itwire.com/business-it-news/networking/41496-telstras-42mbps-next-g-broadband-goes-live While the unthinking and just plain stupid are 'excited' about the concept of Australia wide 1 gbps fibre connections (pretty much along the same lines as the stone age cargo cult dwellers in the jungles of New Guinea are excited about the next 'goods drop' from the strange coloured bird) there is an overwhelming and completely forgotten problem that is either unknown or ignored by the games players and thieves who download terabytes of illegal movies and TV shows. That is the 'aging' of Australia's population. People of 'mature age', or more sensibly, people of mature outlook don't actually steal other people's property nor do they play on line computer games or get a surrogate sex life from pornography. These sorts of people don't have any interest in terabyte broadband plans and speeds that can never make any difference to the applications they use. They certainly, for the most part, don't have large disposable incomes that they will be willing to allocate to expensive 'side shows' of their lives like broadband at $60.00 plus per month. However another key thing these 'aging Australians' don't have is 'children' living at home whom they once indulged by paying for internet services that they do not need themselves and given a choice would stop doing that. They are going to be the ever growing percentage of Australians who are going to drive the percentage of residences that don't have any sort of wire line connection to their home. Not just for the cost saving but for the convenience of location within their home where they make and receive telephone calls and use the internet for the purposes they need and like. My point, made more badly than I had hoped for, is that the actual market for wire line residential broadband is going to fall rather than increase. While I understand that no real analysis and certainly no credible costing has been done on Krudd's madness the simple fact is that the available market for wire line based broadband services in the future continues to be impossible to estimate. Perhaps someone with more than one brain cell in the Australian communications media will begin to actually report on the future of communications in Australia without sounding like a Sussex Street spin spiv? That simple soul could start by doing a sensible analysis of why there is a growing number of residences that don't have any form of wire line connection? Copyright © Exetel Pty Ltd 2010 Trackbacks
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John,
What do you see happening to the cheap sub $50 ADSL1 plans when and if KRudd's madness takes off? I am quite happy with my current TL-C1 plan and really don't want to pay more for internet connectivity (a bit more speed would be nice, so would a Ferrari but that's why I drive an old Peugeot!). From what I read it will be getting a whole lot more expensive when fibre is introduced. I can't see that the copper infrastucture will be maintained. In fact I can see them ripping the copper up as they lay fibre in the same trenches. Copper is worth a bit on the scrap market at the moment. Comment (1)
To rip up copper as they lay fibre would leave people with no service. Copper will stay in the ground and will be "end of lifed" similar to old hardware. It simply won't be maintained beyond 2020 (or whatever date the NBN2 is declared mission accomplished. There is also no guarantee when people would take up the fibre service.
They won't reopen the trench to recover the copper. However, funnily enough, my CDMA phone worked for 2 years beyond original EoL and my analog TV still shows the cricket. Telstra's EoL dates are notional at best and don't reflect real world scenarios where customers and critical infrastructure relies on existing, tried and tested technology. We'll end up with dual networks as they can't force people to take up a products from a variety of retail suppliers, and the copper network will continue to require maintenance as people stick with it. In order to force people across to fibre, Telstra would have to raise their wholesale price to make it unattractive. They wouldn't and a government would have to enact more legislation stopping Telstra from offering their copper product. Comment (1)
1) That is not what is currently stated.
2) If it turns out to be the case then the fibre take up will be materially lowered - only by giving people no choice will fibre be preferred by the majority of end users. 3) As nothing as been costed and Labor Governments share moronic user's views that financial accounting is a black art and taxpayer dollars aren't real money then you could easily be right. Comments (5)
The 'NBN2' is premised on the PSTN being de-commissioned as fibre is activated.
The chances of a fibre alternative being lower cost than a copper service (ignoring the speed comparisons) are zero even assuming the taxpayer funds a huge discount on each service. Perhaps I am completely wrong. Comments (5)
You're right about people moving to wireless.
I know of a young couple who cancelled their landline and ADSL... and now operate on 2 Exetel mobiles and an Exetel HSPA sim. I know of a retired guy who cancelled his landline and ADSL2.. and now operates with a mobile phone and an Exetel HSPA sim. Its happening all right. Harry. Comments (2)
...and the point you are emphasising is a desire not to pay for wire lines of any type as they are too expensive in today's world.
It was not so long ago that there was a telephone line in almost every residence in Australia. Mobiles have rendered that scenario obsolete. Comments (5)
Yes, particularly now that you can get a sim for voice service at $0 per month - and very reasonable usage rates.
The ability to purchase data (only) sims at $0 per month rates also facilitates low cost wireless broadband for PCs. Comments (2)
Is it the relatively high monthly cost of fixed line telephony / broadband that's affecting the growth or the very high connection fees that are putting renters off? (30% of people rent rather than live in their own home)
I don't mind paying for faster, more reliable internet, I'm even considering the 30Mbps Bigpond Cable plans as an upgrade to my Exetel ADSL2 now it's not so ridiculously expensive. But the $160 short connection fee to activate an existing phone line in a rental house just to switch to another DSL provider would even stop me going that route if I was renting. Hopefully a FTTH network with opt-out provision ensuring most homes would already be connected would be a lot cheaper to activate services and should not ever really require a site (or PABX) visit for activation. Comment (1)
I obviously don't know the answers to any of those questions.
But, putting it in perspective, why would anyone with a mobile pony up $30.00 a month for a telephone line? The answer is very few to no-one. If mobile telephony is replacing wire line telephony why wouldn't any sensible person think that that mobile data will replace wire line data in a similar way? Comments (5)
John, with regard to the standalone ADSL/3G/VoIP box. (I know these don't match the specs as they require a separate 3G modem still) Have you looked at the Huawei VoIP Home gateways? HG556 and /or HG552
What kind of price would they be for Exetel ie. bundle a gateway and modem? Comment (1)
All the normal indicators that people use to indicate wireless broadband won't be sufficient sort of exist in other markets, and prove them wrong.
Using the UK as an example, there are more carriers and more people to service, but the standard of service is cheaper AND better. Either the UK government is giving out infinitely more spectrum OR there is more investment in place (brought about by competition no doubt). Comment (1)
It all has to do with these figures:
UK Population per km^2 = 248.9 with 80.375 million subscribers in total, or a 130.55% penetration rate AUS Population per km^2 = 2.7 with 21.26 million subscribers in total, or a 100.76% penetration rate UK mobile carriers = 4 and 22 MVNO's AUS mobile carriers = 3 and 15 (ish) MVNO's I'm surprised the UK prices aren't even cheaper! Comment (1)
On a slightly related note, I just applied to join your OTAW plan a few days ago, and haven't yet been asked anywhere what type of modem I want to purchase or where I want it and the SIM I'm guessing you need to send me are to be posted to... Shouldn't that be part of the change plan process on the website when someone switches to one of these bonus wireless backup plans? Do I just wait until the new month when the plan becomes active and then Exetel contacts me or do I have to contact Exetel myself?
p.s. Still waiting on your all-in-one-wonder hspa modem/router/wifi/ata boxes before I assist the parents in removing their wireline altogether. Comment (1)
I just applied to join your OTAW plan a few days ago, and haven't yet been asked anywhere what type of modem I want to purchase
You obviously didn't read the signup form properly. If you had, you would have seen the option of two different wireless modems for your OTAW plan, right below where you chose it. Comment (1)
The biggest deterrent to having a PSTN (fully functioning one), is the high "rental" cost attached to it. Lower the rental cost and you'll have many more wanting to have landlines.
Many are forced to have at least "Home Line Budget" to support an ADSL service; if it wasn't for ADSL there would be many, many more without landlines. Regardless of HSPA improvements, there is still a very real problem with latency -- plus all data being counted up and down .... the cost of data is way too high for the average user these days. Our household uses plenty of data and I forbid illegal downloads -- there are plenty of legal high bandwidth videos available. When HSPA prices drop further AND data quotas increase significantly AND latency stops being a problem, THEN the take up of HSPA might be much higher. Give anybody the choice in an ideal situation and they'll prefer the speed of ADSL (even ADSL1) over dialup and HSPA -- many more megabytes for your dollar; clearly there are some very low data users whom this wouldn't apply, but for most in the modern world, it simply would not apply. Mobiles too are often abused because "the boss" is paying the bill and the cap plans often mean people spend way too much on mobile -- they also have ample cap left to not require fixed line phones. If those "workers" whom are not paying their own mobile bills had to count on paying their own way.... well, most would opt for a landline unless mobile costs drop significantly (which has actually been happening). The whole fibre / NBN argument is very worn around here, but if fibre becomes a reality, then ALL services on copper will be replaced one way or another as the roll-out progresses or very soon after -- leaving the copper there will just take up unnecessary space in the pits and from the pits to the homes. I used to tell people to sell their Telstra shares whilst they are still worth something -- it might be too late for many people now Comment (1)
I'd like to talk about "My point, made more badly than I had hoped for, is that the actual market for wire line residential broadband is going to fall rather than increase."
I think that may happen. I also see the desire for bandwidth per line increasing, I dont argue that is rational, I do argue that the war between DVD/TV recorders and ipTV is only just begining and I dont trust the public to think beyond the upfront costs. But how much can desire to "keep up with the joneses" affect fixed line connections ? Would more education about queueing downloads impede take up of greater bandwidth lines ? Will the drop in price of DVD/TV recorders be the greater impact ? Its quite clear the most watched TV show (sports/american/reality rubbish) will always be free-to-air... I think it might be a case of the number of fixed lines decreasing but the overall bandwith supplied remaining static or even growing. (of course, one look at my account suggests I myself am blind beyond upfront...) Comment (1)
When/or if Telco HSPA ever reaches %10 an entity the size of Exetel's traffic (as opposed to %1, current) points covered in such musings may make clearer sense but until then i'd contend GSM can be a useful tool to rot Voice margins.
Comment (1)
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