NBN interim satellite service a victim of its own success

NBN interim satellite service a victim of its own success

Summary: iiNet is preparing to withdraw its 20GB plans on the NBN interim satellite service, citing capacity constraints.

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TOPICS: NBN
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NBN Co's interim satellite service (ISS) is proving to be so popular that iiNet will be forced to withdraw its highest download offering, citing a lack of capacity on offer on the service.

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.

The service has proven to be very popular, offering cheaper internet access and a variety of providers in parts of Australia where it previously didn't exist. As of the end of June, there were 34,600 customers on the interim service. The current cap is 48,000, and former Australian Communications Minister Stephen Conroy indicated in Budget Estimates in May that current capacity is expected to be exceeded in early 2014.

In addition to reaching the maximum number of users, signs point to those already pushing the limits on the services available on the satellites.

iiNet itself has 6,000 customers on the service as of last reporting, and CEO Michael Malone has confirmed to ZDNet that the company intends to withdraw the larger of its two NBN interim satellite plans, citing a lack of capacity on the service.

The 20GB plan is still up and available to order on iiNet's website at the time of writing, but Malone indicated that the company has found that the biggest issue with customers getting on the service is that they actually want to use a decent amount of data every month.

The issue will likely only get worse over the next two years, until the satellite launch in 2015, assuming construction is completed and it is launched on time. The Coalition would like to see the limit raised in order to accommodate more customers, but Conroy indicated in May that this would be a very expensive exercise.

"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."

The Coalition will go ahead with the construction and launch of the two new satellites should it win the election.

ZDNet contacted NBN Co for this article; however, the company had yet to provide a comment at the time of writing.

Topic: NBN

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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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5 comments
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  • A successful Hiward govt programme

    More bad news for the "on target and on budget" labor NBN:

    "The Australian can reveal subcontractors in Western Australia and their branch of the Communication Workers Union will meet law firm Slater & Gordon after they went without pay for about 12 weeks because of work stoppages caused by reports of asbestos mishandling at NBN sites around the country."
    http://m.theaustralian.com.au/business/in-depth/subcontractors-may-sue-over-nbn-asbestos-shutdown/story-e6frgaif-1226695922642

    Josh I know it must be a busy time but perhaps you'll find time to review NBNCo retail offerings. The TPG offer was reported almost a year ago:
    http://www.zdnet.com/au/tpg-dishes-out-unlimited-nbn-plan-7000004397/

    Sadly as I pointed out in comments similar service was already available using the "obsolete" copper network. The difference today is the NBNCo fibre plan doesn't exist on the TPG website; contract issues with NBNCo. Their copper deal is today even better.

    However we can review the NBN plans at a number of sites:
    http://www.whistleout.com.au/Broadband/National-Broadband-Network-NBN-12Mbps-Plans

    Billions of dollars of taxpayers money borrowed and invested for 12/1mbps unlimited plans that are as expensive than ADSL2+; well for the 150k users that can actually subscribe.

    It's comical; for taxpayers tragic. Good work Rudd, nice to know the debate rules don't apply to the anointed.
    Richard Flude
  • Fixed Wireless issues will add concerns for NBN satellite...

    The issue here is that consumers want to actually use their connection. That problem is particularly an issue for the interim satellite solution, but will potentially also be a significant concern for the real NBN satellite offering.

    Concerns with the NBN fixed wireless roll-out are likely to increase pressures on the satellite service. As subscribers look to sign up to fixed wireless only to discover they are in small black spots or have too much foliage in the line of sight (a known problem with 2.3GHz, but still perhaps a recent surprise to ex minister Conroy), the pressure on the NBN satellite system increases.

    I am not about to pass comment on the adequacy of the satellite solution. I know the fixed wireless roll-out has significant elements of mismanagement and incompetence, but I have not studied the provisioning of the satellite system in detail, nor have I been able to determine whether the basic engineering processes have been undertaken competently. Rule number one with any satellite system is to remove as much demand from it as you can supply feasibly through other channels. This is perhaps the general rule that NBN Co is assessed as failing on the fixed wireless side (see comments in the 2010 NBN Implementation Study re suggesting that fixed wireless has little benefit where ADSL service already exists).

    Josh, I know you have tried to be very fair to all sides of the NBN debate, and I would love to see FTTP reaching a great majority of the nation, but I'm afraid that the reality looks very grim to me in terms of NBN Co performance over the last 4 years. I really hope we can do better in the future. Our current Minister will have to do his homework if last night's debate is any judge. We must move past the trivial one-liners and get into the detail to determine what is working/what will work going forward.

    Cheers,
    Craig
    Craig Watkins
    • Hmm. Intellegent debate

      A first coming from a FttN supporter. (oh wow that sounded terrible)

      But bad introductions aside. I would love to know where you are looking this all up. If you can send some links that would be awesome. I would like to look over the data myself. Gives me something to do and helps me get a good perspective on the debate. Especially where these "significant elements of mismanagement and incompetence" in the wireless program occur.

      My biggest question to you (as i have not seen your name before on this site) is on what grounds do you oppose the Labor NBN. By all accounts the only improvement on liberals downgrade is the cost. and there are questions there if it really is going to cost less. I would like to see it cost less myself. We all would.

      But in 20 years time i would love to still not rank behind third world countries in upload speeds and be known as the worst serviced developed country in terms of internet speeds,
      Darren.Bennett
  • numbers don't add up

    Is it just me or those numbers make no sense.

    $206m divide by 27,000 / 12 months = a monthly cost of $630 odd bucks.

    Are sat customers paying over $600 a month for their service? Josh, care to ask NBN?
    chugs@...
    • rational approach

      If providing satellite is cheaper than building fibre to those premises then it's potentially rational for NBN Co to subsidise the fees...
      LexLutherKryptonite