Forget the NBN, 100Mbps is already here

Summary:Telstra and TransACT will shortly begin offering 100Mbps broadband to many customers. By moving early, the companies have not only raised the bar for Australia's broadband services, but thrown down a challenge to a government that now faces increased pressure to deliver the NBN as promised.

It's amazing what telcos can do when they put their heads to it. Telstra, TransACT and Optus announced last week that they would switch on 100Mbps internet services — making ADSL customers green with envy and, one might suspect, Stephen Conroy green with worry.

The NBN isn't the only way Australians can get 100Mbps services, the telco giant has proved; it is now up to the government to match and exceed Telstra's example.

With actual, purchasable 100Mbps consumer services out there in the real world, Australia's broadband market will change dramatically — not in terms of what most speeds people are actually getting, but in terms of what everybody else's services are compared to. Bet your booties that all three companies, which have first-mover advantage thanks to their turbo-charged fibre and hybrid fibre-coaxial networks, will be working to raise the bar as high as they can.

Let the services begin, as they say in the classics. What services? The long-elusive triple play — telephony, television and data — is a good place to start. They may be a footnote to its ongoing political intrigues, but Telstra has been steadily building its credentials as a triple-play provider: increasingly flexible Foxtel packages now reach mobiles, smartphones (including, recently, the iPhone), and even allow viewing of video via the web.

It's all part of a strategy to add more flexibility to shift its video interests online — not only because it sounds cool, but because a data-based video stream allows Telstra to look beyond the edges of its own network and onto the eventual NBN.

For now, however, Telstra's 100Mbps customers are limited to its own HFC network, which makes these initial services as much about expectation-setting as anything else. But there is a bigger game afoot here as Telstra proves a very big point with the government.

The proven ability to deliver 100Mbps services to large numbers of customers is a big step for Telstra — like when your little brother says he can eat more worms than you, and then does. In delivering real 100Mbps services like it said it would, Telstra has shifted the onus onto a government that now faces even more pressure to deliver the NBN as designed.

If problems derail the NBN, or if it cannot deliver the same experience Telstra's cable network can, Telstra will score no small amount of philosophical bragging rights. Ditto TransACT, which has long provided some pretty excellent triple-play services to residents of a few select pockets of the ACT; its content offerings already well established, the addition of 100Mbps is not so confrontational as evolutionary.

Even Optus — which will be third to the market with 100Mbps but still has good reach with its HFC network — isn't going to be sitting around waiting for the NBN.

So, while Telstra's HFC network is still limited to the same 2.5 million households or so that it has always serviced, its head-start in building customer loyalty should not be underestimated. Telstra has several years to set customer expectations for 100Mbps internet in Melbourne, potentially becoming the favoured provider — and developing strategies to counter the eventual introduction of the NBN.

Even as the government continues to back the NBN's ponderous roll-out, Telstra, Optus and TransACT will use their lead time to tweak pricing, charging a premium for their 100Mbps services today to recover their capital investments — and build up a data-based infrastructure that's ready to be switched onto the NBN at a word. Telstra's new T-Box is another extension of this, combining PVR capabilities with access to Telstra's increasingly data-based content library over any network capable of carrying it.

Little wonder Conroy is so eager to wrest control of the HFC network from Telstra: if Telstra plays its cards right, it can build up a strong 100Mbps following and create the same kind of inertia that for high-speed broadband that it has long enjoyed on the copper local loop. This, in turn, will diminish the NBN's natural market and create new forms of competition for Conroy's biggest project.

Pricing, marketing and bundling will of course be critical for the success of these new services. But by living up to its promise to bring 100Mbps services before year's end, Telstra has scored a direct hit on the government. The NBN isn't the only way Australians can get 100Mbps services, the telco giant has proved; it is now up to the government to match and exceed Telstra's example. From 1 December, every day the NBN is not operating, is another tiny win for Telstra.

Topics: NBN, Broadband, Optus, Telcos, Telstra

About

As large as the US mainland but with a smaller population than Texas, Australia relies on ICT innovation to maintain its position as a first-world democracy and a role model for the developing Asia-Pacific region. Award-winning journalist David Braue has covered Australia’s IT and telecoms sectors since 1995 – and he’s as quick to draw le... Full Bio

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