If you’re anywhere near a radio today, or you’ve read the online news sites1 you might be forgiven for thinking that the boss of the National Broadband Network doesn’t think Aussie’s want high-speed broadband. That’s just crazy right? Yes, yes it is crazy. Crazy to think that’s what Bill Morrow NBN CEO has said. Yesterday, after reporting the half-year results of the taxpayer owned NBN, CEO Bill Morrow jumped on a conference call with reporters to discuss the network roll-out and take questions.
There had been reference to Telstra’s mobile 4G Gigabit service, so rightly, Mr Morrow was asked why consumers couldn’t get these speeds on the NBN given it has been discussed as a potential speed option for some time. Morrow answered, noting that 1.5 million Australian homes are currently capable of receiving Gigabit speeds (These homes are connected via the original Fibre-to-the-Home technology). Going on to say “We have a product that we can offer the retailers should they want to sell it.“
Which is in fact the straight out, simple answer to the question – the Telco retailers (known as RSP’s – Retail Service Providers) such as Telstra, iiNet, Optus etc, simply haven’t offered it to their customers. Currently 100mbps is the fastest download speed you can buy. Gigabit is ten times that.
Mr Morrow added “the reality is that a couple of the retailers have signed up for a trial based as to where they’re looking at what a gigabit per second service might look like. But they have chosen not to offer that to the consumers. You’d need to talk to them as to why, but I will presume it is because there isn’t that big of a demand out there for them to actually develop a product to sell to those end users.”
So in fact, this “super-fast” broadband network people are reporting on today could be available if the retail telcos wanted to offer it.
Why don’t they offer it? That’s a question for Telstra, Optus et al. But one can safely assume they don’t see a viable model to offer it, and perhaps they see little or no demand? He went on to say “We did scour the planet and go around to talk to a variety of different carriers that have gigabit per second services in the market that in fact are selling, and where consumers have taken up gigabit per second services. We asked the question, has anybody actually used that amount of bandwidth. The answer was unanimously no.”
You see, what those of us in the bubble of technology reporting like to think is that everyone wants the most amazing and fastest speeds. In fact, what most people want is a reliable connection at a faster speed than today.
Remember, millions of Australian homes are not getting 10mbps speeds, not even 15 and certainly not the 25 which the Government has mandated should be the minimum available speed to all homes under the NBN.
I’ve had 100mbps for some time, via the cable network. And as one of the heaviest users and someone reliant on the internet, I see no reason to get a faster download speed. Businesses can and do see need for faster speeds, and there are business options to get that – there have been for years. What Mr Morrow is making clear is that there is no consumer demand for 1,000mbps speeds. Bill Morrow added “Even if we offered it for free, we see the evidence around the world that they wouldn’t use it anyway.” pointing specifically to the vast bandwidth Gigabit speeds would offer. There’s just very little “need” for it right now.
Laurie Patton, now former CEO of “Internet Australia” (he announced this week he is stepping down2) an industry representative and lobby group is widely reported with concerned comments about the NBN and about Mr Morrow’s comments re speed. The fact is Mr Patten is still holding a flame for a Fibre-to-the-premises roll out of the NBN. Sorry champ, the horse has well and truly bolted on that one. Here’s the raw facts, there are 1.6 million homes active and connected to the NBN. More than 50% of them are on Fibre to the Premises. Yet, just 13% of those homes have chosen the current fastest speed of 100/40.
82% of people have chosen the two lowest speed tiers of 12/1 and 25/5. 82%. And that number is only in households where the top 100/40 speed is available. Among Fixed Wireless customers the result is the same, with just 4% taking the top 50/20 speed tier.
So come on, let’s get real folks. There is no demand for gigabit, and if there is, the business case for it probably doesn’t stack up.
The NBN recently launched its own advertising campaign to educate Australians about the available speed tiers, because you know what, it’s in their interests for us to choose faster speeds – they would make more money! As we’ve said, time and time again – it’s time to let the NBN build a network3, using the varied technologies nominated and deliver some minimum standards to every household.
Meanwhile – aside from today’s beat up, the actual news from yesterday’s nbn reporting are the numbers:
- The number of premises able to order an nbn service rose to 3.8 million, an increase of 129 per cent versus the six months ended 31 December 2015
- The number of homes and businesses with an active service over the nbn network increased to 1.6 million, a 125 per cent increase
- Revenue earned in the half-year was $403 million (146 per cent increase in comparison to H1 FY2016)
- Average revenue per user remains constant at $43 in comparison to H1 FY2016
If you want to draw your own conclusions as to what Mr Morrow was talking about regarding speed and data – here’s the transcript:
Jennifer Dudley-Nicholson (News Ltd): So we’ve heard you make reference to this mobile phones network plan costing – one gigabit per second speed. The nbn has been saying that this is possible for some time, but it’s not available to consumers. Why do you think it’s not available, and when do you foresee the RSPs making it available?
Bill Morrow (NBN CEO): So we have roughly 1.5 million homes that can have the technology to give a gigabit per second service capability today. We have a product that we can offer the retailers should they want to sell it.
Jennifer, the reality is that a couple of the retailers have signed up for a trial based as to where they’re looking at what a gigabit per second service might look like. But they have chosen not to offer that to the consumers. You’d need to talk to them as to why, but I will presume it is because there isn’t that big of a demand out there for them to actually develop a product to sell to those end users.
Jennifer Dudley-Nicholson (News Ltd): how much would it cost in terms of delivering the service – is it prohibitively expensive and is why people sort of can’t access it?
Bill Morrow (NBN CEO): Well, again I suspect – all I can do is assume here because it’s the retailers that do their market research and determine which product. But a gigabit per second is a lot of bandwidth. We did scour the planets and go around to talk to a variety of different carriers that have gigabit per second services in the market that in fact are selling, and where consumers have taken up gigabit per second services. We asked the question, has anybody actually used that amount of bandwidth. The answer was unanimously no.
There are not that many applications that warrant much above the products that are being sold at nbn today. So I suspect that’s the main reason. If I have to pay for it – to move from 100 up to a gigabit per second – I don’t really have the application or the need for it, so why would I pay more to do that.
Jennifer, I believe that’s the market dynamic that is occurring today.
Now I say that as we know there are things on the horizon that are going to increase the need for further demand. What do you think about AR or AI, or any of these other elements with media streaming going to 4K and 8K and immersive sound. All of these other things could certainly drive up more of that consumer need, but we haven’t seen that as of yet because those aren’t really here to where people feel I need to pay extra money to get that kind of service.
Even if we offered it for free, we see the evidence around the world that they wouldn’t use it anyway.
- ^ online news sites (www.couriermail.com.au)
- ^ he announced this week he is stepping down (www.itwire.com)
- ^ it’s time to let the NBN build a network (eftm.com.au)