Wednesday, July 22. 2009No Future For Residential ADSL - (I)?John Linton While the likely success percentage of the current Labor government managing to build an NBN2 within any reasonable time frame and at any sensible cost (thus allowing a sensible selling price for residential users) would have to be well below 50% with more cynical people suggesting it's closer to 0% only time will tell what the reality may be. On the other hand the take up of mobile/wireless 'broad band' by residential will be reported in the next ABS report as growing even more strongly and will provide some indication as to what residential users may be selecting as the preferred general purpose internet interface long before the metaphorical shovel 'turns the first sod' in a putative NBN2 construction. Whatever is going to happen in the use of wireless to connect internet will become more and more evident over the next 12 - 18 months. The few people I know, and the even fewer that have some sort of knowledge of where the mobile carriers are 'going' with wireless broadband all are beginning to postulate, not on what the future holds for HSPA/LTE/Whatever, but on what the future of ADSL is. Not doubting that it has a future but whether that future is the straight line growth, all encompassing be all and end all of internet delivery. Exetel is only a very tiny company so I am not extrapolating from our experiences with Exetel or with other companies of which I had some knowledge of in the ISP business going back to 1995. I have participated in some interesting discussions over the past few years on the 'future' of residential communications and I have always held a very, very different view to most of the others involved in these, pleasant lunch/alcohol fueled and distorted conversations. Over the past three years I have held the view that even the most erudite, well researched, long experienced and deeply knowledgeable 'industry participants' were progressively blinding themselves to what internet usage was really all about in Australia and this 'self blinding' was hiding the real situation from them, who by and large being key decision makers within their own comms companies was sending a not inconsiderable 'slice' of Australian communications down the wrong path. It was my turn yesterday to give the 'reason everyone is wrong' five minute address and I hadn't done that for over a year as I have had less and less time to indulge in these extremely pleasant but far too time demanding occasions. I am sure that a large martini added emphasis and enthusiasm to my brief point but my humour failed to find any kindred spirits although I had thought I made my points with a sensible amount of comic illustration. I guess it must inevitably happen every so often. My points tried to illustrate the view that it was obvious that HSPA would cannabalize ADSL and that ADSL was an expensive to deliver and expensive to use technology that would occupy a only a brief time period in the 'history' of the internet (shorter than dial up) in the last dimming rays of the sunset years of 'copper communications' (which should have died back in the 1980s). My attempt at a comical few minutes died a miserable death and my three points were generally regarded as wrong. I actually think I'm right and these are my three reasons for thinking that the vast majority of residential users will move away from ADSL once a (non-NBN2) alternative is available: 1) ADSL is a kluged solution burdened by the end user having to pay for a transport layer (the copper telephone line) that is unnecessary and a poor choice for the job in any event and is very expensive for what it is. 2) Current Internet via ADSL is overwhelmingly based (by almost all providers) on the demands/needs of a tiny percentage of actual users who are characterised by a desire for 'speed' and large 'downloads' - while the majority of internet users in Australia (by a factor of something like 9.5:1) have neither a need nor wish to pay for such capabilities. 3) Given the choice (and echoing an old Telstra claim) 90% plus of today's ADSL users would prefer a much lower cost to paying more for a faster service and almost none want it tied to telephone line service. Now I was going to wrap up this piece of 'heresy' with the simply obvious logic that once you remove the need for "fast pings" for WOW type games and big download allowances to stream pornography (and these requirements apply to only one relatively small demographic) you, as a supplier of internet services, have a very different scenario to deal with and it is best dealt with by wireless. Now, I am not saying that the 10% of end users who wish to play interactive games and stream live video aren't an important, and very lucrative, end target market - they are. But they are not that important and certainly aren't anything like the main market for internet services nor, when you actually do the research, even a very big market. They are certainly, courtesy of chat rooms and fora, an incredibly 'noisy' market but then 'noise' seldom if ever equates to importance. So my, clearly muddled, reasoning brings me to the conclusion that some 80% of the current ADSL user base would settle for a 'line speed' of around 1.5 mbps with a download allowance of 3 or 4 gigabytes for $A30 a month - which is what I think HSPA will deliver to those people and will eliminate the problems and costs of a copper line as well as giving them the advantages of being able to move residences and obviously also have truly portable internet. Which why my summary was going to be, before I abandoned the process, that HSPA may well suit over half the current internet residential users which will not only affect the future of the ADSL market but will make predictions of take up of the NBN2 (assuming it ever gets built) more problematical than the 'experts' constructing the current take up models have dreamed about. ....to be continued. Trackbacks
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This is just my humble opinion and agree with a lot of what you are saying but unfortunately the HSPA solution has one major flaw, and that is there is only a limited amount of bandwidth, and even though this can be mitigated by using smaller and smaller cells I can never see it being a replacement for a wired/fibre connection.
I agree that most users don't need either fast or large downloads at the moment, but a large number of people have a telephone, internet, cable/satellite TV with a combined cost of over $100 a month, and you are still stuck watching what someone else decide you want to watch. I think the internet will eventually bring all of these technologies together with the freedom to use TV when and where you want, and this will require far more bandwidth than we are using at the moment and a lot more than will ever be available over a shared wireless link. I think that the number of people that download pirated TV/Movies/Music and also the number of DVD’s of pirated copies of movies etc shared around the offices (where people don’t have the know how to do it themselves) each day indicates that there is a market for people being able to control there own entertainment habit and that is going to require bandwidth. Comments (2)
All the points you make are valid.
One of your points, although you didn't intend to do so, underlines why Telstra et alia's new dream of bundling al services at even higher asking prices remains the putative NBN2's ongoing show stopper. You allude to people sharing pirated movies 'around the office'. You totally illustrate why it's going to be difficult to make people pay for something the can steal and steal in a society (your ofice in this instance) that doesn't condemn theft....which is a great deal of Australian society. Comments (7)
I think you are ignoring several factors regarding future internet trends.
With streaming movies, tv shows, game consoles all accessing the internet now via legal means I think people are only going to want more speed and more download allowance going into the future rather than less as you seem to be suggesting. Comment (1)
I reckon if mobile phone call costs were made competitive with landline costs (like in USA), there would be a "mass exodus" of typical "mum and dad" consumers from landlines to mobile phones.
Harry. Comment (1)
I agree totally with your sentiment John. Most people would be more than happy with a "'line speed' of around 1.5 mbps with a download allowance of 3 or 4 gigabytes for $A30 a month - which is what I think HSPA will deliver to those people".
Unfortunately I don't believe that the current Optus HSPA service provides a reliable alternative. I assume due to congestion. I have been told that using the wireless for general browsing during the evening (in Wollongong NSW) is almost impossible with only dialup type speeds. So once the infrastructure meets the demand - then all will be good for HSPA being an ADSL replacement. In the meantime I only use it as a way of connecting to the internet when I am away from home, and for this purpose it is perfect. Comment (1)
I totally agree John on those people stealing movies will probably continue to do so, unless the movies are priced at a level that people consider reasonable, a lot of people will pay $30-$100 for Austar/Foxtel and similar services, maybe they will pay a similar price for access to the stuff they are stealing, but at their convenience.
i.e. paying $1 to watch the latest episode of Dr Who may net the BBC more money than charging $100 for the season on DVD six months later, especially when it takes the local media companies months to bring the content to Australia. Anyway in my deluded world I hope this model will work, I’m sick of only being able to get access to TV and Radio that some corporate executive deems I should hear/see. Several of the shows I have enjoyed get axed because they can’t get 100 million viewers, maybe if my dollar went directly to the production company I might? get more choice. Comments (2)
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This isn't far off Harry. I see this in the future. It wouldn't surprise me if it was Vodafone which brings this out, as it wouldn't complete with a land line business as they don't have one. It would be perfect for them to provide a landline number and wireless internet with a landline number attached to your mobile number so you can cancel your home phone. In the states you can normally grab an unlimited minutes plan for around USD $130 and $10-20 for unlimited SMS (Verizon Wireless a CDMA carrier has a plan around $130/mo for unlimited incoming and outgoing minutes as an example). Now Optus/Vodafone aren't far off with its Virgin Topless and Optus Timeless, Vodafone Unlimited plans. You might say $99 - $120 for an unlimited plan in OZ is cheaper since most of these include 1GB of data it could be close to unlimited for a mobile user (when not tethered to a laptop). I wonder how these new offers have affected the amount of people who have disconnected their home phone and solely use their mobile? The difference however is in the US their "cell phone data plans" are normally unlimited or come with no excess charges (or bill shock!), as the carriers just cut you off if your abusing the service but your voice services remain unaffected. This could work in AU but it competes with their wireless broadband offerings which is profitable for all the carriers so I'm doubtful on that part at least for now. I think the telco's will one day find a way to make some money on inbound calls when your mobile has a landline number attached (ie you could have an 04x and/or 02x number). Virgin is doing this with its VBB@H service, it wouldn't be hard for Vodafone to offer a anywhere product with a PSTN number and mobile number attached. Perhaps a minutes system like in the US could work here? Buy x minutes for incoming and outgoing calls rounded to the full 30 or 60 seconds and get a local PSTN number to kill off your "hard line" completely? Comment (1)
THe one thing you know about communications infrastrcture is that it always grows and falls in operating price (another matter as to whether it falls in customer charges).
Comments (7)
That's all very true - for a certain demographic.
It very definitely isn't true for all demographics. Comments (7)
Now it has become much easier to convert your land line number to VoIP it is only a blink of an eye away from using that VoIP number on your mobile handset to receive landline calls on your mobile at VoIP rates for the calling party....10 cents untimed.
Comments (7)
yes the coverage and capacity still has a way to go unfortunately
the only hurdle i see in making HSPA a complete viable alternative is the high pings and poor voip quality. Will there be any improvements to this in the future? Comment (1)
Pings will never be anything like ADSL - the current, and from what I understand, the future technologies don't allow that.
HSPA isn't for gamers. I, and everyone I contact, have no problem with VoIP quality. Comments (7)
One aspect of LTE is low ping times from user to network, in the range of 5 to 10ms for the first hop.
Whether or not this is delivered on networks in Australia is a different matter. Comment (1)
HSPA can't be that bad for gamers. The pings I saw while using HSPA were around the 80-100ms mark. Which is a far cry lower than ~300ms average on dialup.
Depending on the gametype, 800ms in first person shooters (FPS) will limit the types of weapons you can use (based on my experience of Soldier of Fortune on dialup) - pretty much "shotgun" only. At 300ms and 500ms FPS are still playable, but perhaps not experienced the best. Any situation involving non-player vs player (PvP) combat is playable at up to 3 seconds latency - Turn based (even longer latency allowed as long as sync with the server can be maintained), (real time) strategy (RTS), Team Based RPG's (Role Playing Games), etc. PvP combat in MMORPG's (Massively Multiplayer Online Role Playing Games) seems quite playable up to 750ms, but the better the latency, the better the experience, I would personally see no latency issue from HSPA, if I were playing MMORPG's on International (US) servers. Twitch FPS, where reaction times are critical (Team Fortress 2, Left4Dead, Unreal Tournament, etc) - ADSL is certainly superior, but HSPA is only adding an extra 1/10th of a second maximum. I'm curious what the latency over a farther "Country Broadband" link would be, surely lower than dialup? Which brings me with this final scientific fact: "The average human visual reaction time is about 200-220ms" Comment (1)
Not for the older generations. The younger generations always want more. Oldies buy 1G plans, yungns buy 5G plans and still go over
Comments (2)
I do (have trouble with VoIP on HSPA), but only in Armidale which as you'll see on the GMap page is a no-sell area. The outlying areas on 900MHz however are good for VoIP.
I see a danger in selling HSPA with VoIP as a feature in congested areas. Comments (2)
I only use VoIP in the CBD, North Sydney and Sydney's Lower North Shore - I never have a problem.
However, you are quite right that VoIP is congestion intolerant. I don't expect that to be an issue in the future. Comments (7)
True - I think Exetel needs to concentrate on the 'older' genertion markets in the future.
Comments (7)
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