Australian government mulls NBN satellite options

Australian government mulls NBN satellite options

Summary: The Australian government is considering its options as the NBN Co interim satellite service reaches capacity.

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TOPICS: NBN, Telcos
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The office of Communications Minister Malcolm Turnbull has said that the government is considering its options after iiNet announced it would no longer sign up any new customers to the National Broadband Network (NBN) interim satellite service as it reaches its limit.

NBN Co is preparing to launch two new satellites in 2015 that will service the three in 100 premises that will not be covered by the fibre-to-the-premises network or the fixed-wireless network. In the meantime, NBN Co has tapped into capacity on Optus' and IPStar's existing satellites in a deal worth AU$300 million.

As ZDNet first revealed in August, iiNet removed its 20GB interim satellite plan from the market, citing difficulty in obtaining enough capacity on the satellite service, but the company has now gone one step further, and has said yesterday that it will no longer offer any new plans on the service.

"At its peak, we had 500 customers signing up every week for our NBN satellite services. There is clearly a significant demand for higher quality broadband in remote Australia, and we're absolutely gutted that we've had to withdraw this crucial service from sale," iiNet CEO Michael Malone said.

An NBN Co spokesperson told ZDNet that there were a total of 42,044 customers on the service as of last week, and the capacity limit is 48,000. iiNet said yesterday that NBN Co had "ruled out" providing more transmission capacity on the interim service before the satellite services have launched, but when asked about capacity, NBN Co referred ZDNet to Turnbull's office.

Turnbull's office confirmed that the satellite service was out of capacity in Victoria and Tasmania already, but would not state whether the government would seek additional capacity to address the demand before the launch of the satellites in 2015, stating that it was currently under consideration.

Speaking at the NBN Rebooted conference in Sydney today, NBN Co's head of satellite, Matt Dawson, said that although users only had access to speeds of up to 6Mbps, they were using the service heavily.

"People are now able to do video streaming, enjoy YouTube and do their Skyping and that has placed a huge demand on the network," he said.

"It's a positive feedback thing. People who previously haven’t had access to broadband are now enjoying that facility."

The service can currently only handly the 48,000 maximum users using around 9GB of data per month, and NBN Co has put a fair use policy on its retail service providers to ensure they stick to that amount. 

"That's worked reasonably well but we’re now over 42,000 activations and the users are starting to experience some contention," Dawson said.

Once the long term satellite solution is up and running, it will be able to support 200,000 or so users, accessing up to 60GB of data per month. He said that once the service is up and running, it would take between 12 and 18 months to move customers over from the existing satellite service.

Prior to the election, the Coalition had called for the 48,000-premises cap to be raised for the interim satellite service, but then-Communications Minister Stephen Conroy warned in May that the cost would be incredibly high to expand the service.

"NBN Co has investigated options for expanding the available capacity on the ISS," he said. "If we were to buy all the remaining capacity on IPStar and other satellites, we could potentially increase our user numbers to about 75,000. To add about 7,000 new services, the cost would be roughly AU$86 million; to add 17,000 new services, the cost is estimated at AU$143 million; and to buy all 27,000 of these services, the cost is estimated at AU$206 million."

Malone said yesterday that he expected the quality of service on the satellite service to continue to decline, and iiNet was now looking at moving some of its 8,000 customers over from the service to an Optus wholesale 3G or 4G wireless broadband service.

"We recognise that the Federal and State governments are currently funding 'uneconomic' mobile networks in regional areas. It would be in the best interest of these isolated communities to ensure open access to this crucial infrastructure — improving services and encouraging competition," he said.

"As soon as NBN Co commissions its new satellites, iiNet will immediately provide higher performance services for all qualifying customers."

Updated at 2:50pm AEST November 19, 2013: Added comment from NBN Co's Matt Dawson.

Topics: NBN, Telcos

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Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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4 comments
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  • What's the problem?

    Turnbull was saying there was plenty of capacity. That putting up satellites was a waste of money. He's wrong on everything to do with growth and capacity in his plan, this is just the first that has shown him for the fool he is. It'll be a few years before his FTTN money pit is shown for what it is.
    Pilfer-52cec
  • Coalition clown logic is that if you want fibre you should pay for it hence their religious obsession with FttN and obsolete copper so since we are entering a new "era" in the NBN story now known as the GimpCo years I see no reason why that shouldn't apply to satellite plans now too. Remember we have to be "technology agnostic", if these bumpkins out in the sticks want a satellite plan they should shell out the $8k and pay for it themsleves. No reason why taxpayers should subsidise their porn addictions.
    Hubert Cumberdale
    • LOL

      Love your comments always HC, but can we stop saying "taxpayers subsidise". That's starting to sound like exactly the lies Malcolm would have us believe.

      "The $27.5bn Government component of the NBN is funded by debt, through the issuing of Australian Government Bonds. That is, the Federal Government offers our AAA-rated bonds to investors, at an interest rate of about 4% (depending on the term).

      The NBN however, will provide a return of about 7%."

      Source: http://nbnmyths.wordpress.com/how-are-we-paying-for-it/

      I keep hearing the word taxpayers but we don't have all that much to do with funding/subsidizing anything. People opposed to the FttP always harp on about cost to taxpayers - it's simply not true though right?
      Ramrunner-5dd3e
  • That's right, Ram, but we have to make due allowance for the people who iterate the "OMG the NBN will cost taxpayers!" furphy.

    They may be dedicated chatterati from the political class, but they seem to be complete deadheads when it comes to understanding network architecture and infrastructure funding, etc.
    anonymousI