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 theĀ 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 theseĀ 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.