John Linton
One of the initial attractions of using ADSL2 services from providers other than Telstra Wholesale was the likelihood of a lower cost of delivering the service making a prospective customer's decision to select a faster service a financial 'no brainer'. Just because data was delivered more quickly didn't mean that any particular customer would download more data - particularly if their plan's incuded download allowance was the same at both speeds. Sure, peak periods would be affected but we figured that would be not more than the lower monthly port cost saving and more likely to be less.
More than 12 months have passed since we connected the first ADSL2 customers to both the Optus and Powertel networks and we have around 10,000 ADSL2 users; which is a statistically meaningful number to develop basic trends.
The results continue to surprise us and continue to defy our ability to work out what is actually happening. In broad summary we see the following average bandwidth usage at
peak times by network type:
Telstra ADSL1 - 33 kbps
Optus ADSL1 - 50 kbps
Powertel ADSL2 - 60 mbps
Optus ADSL2 - 75 mbps
The cost of IP bandwidth per gb is the same for all connection services but the cost of customer connection to Exetel (the 'GigE' links required to connect Exetel to the different carrier networks) vary considerably:
Telstra ADSL1 - $2 per customer
Optus ADSL1 - $4 per customer
Powertel ADSL2 - $5 per customer
Optus ADSL2 - $9 per customer
The saving in monthly rental on port costs, as I said previously, makes the Optus ADSL2 'premium' almost line ball with the Telstra ADSL1 base cost of delivering the service when looked at this way - which was what we initially based our decisions on.
The much higher peaks, which we partly expected, were adequately handled over the past 12 months by the NetEnforcer's ability to spread P2P demands on ADSL2 circuits over longer periods which effectively removed 400 mbps from the peak usage period and therefore controlled that expense very effectively. However as the number of ADSL2 services increases as a percentage of total ADSL services, and it's now approaching 20%, the NetEnforcer's ability to deal with peak demand is reaching the end of its abilities.
We are expecting the new P2P caching service to eliminate the demand on IP bandwidth but, by definition, it not only won't reduce demand on the very expensive Optus ADSL2 connectivity but it will increase it as the P2P data will be provided much more quickly. We will be able to judge just what effect this will have in the P2P caching trials we are planning to commence today - but it seems unlikely that the trials will show much differerence to what we expect to see in terms of connectivity bandwidth usage.
The conundrum is quite difficult to deal with as Exetel's ability to reduce the charges being made by the various carriers for connectivity is almost nil. So while we can reduce the cost of IP bandwidth very considerably over the next 9 months and while the NetEnforcer and, hopefully, the P2P caching service will reduce the need for additional bandwidth by around 800 mbps the net gain in operating cost reduction doesn't look anything like as good as it did six months ago.
The only 'solution' seems to be to stop selling ADSL2 services or raise the price of ADSL2 services - neither of those options has any appeal.