Drop your NBN obsession: telcos told

Drop your NBN obsession: telcos told

Summary: The federal broadband department had one message for Australian telcos today: stop obsessing about who is going to build the planned AU$4.7 billion national broadband network and start getting ready to deliver services and market it to customers.


The federal broadband department had one message for Australian telcos today: stop obsessing about who is going to build the planned AU$4.7 billion national broadband network and start getting ready to deliver services and market it to customers.

The Department for Broadband, Communications and the Digital Economy is currently overseeing a tender process which will see the AU$4.7 billion in funding handed over to one of more parties to build the network, with contenders including virtually all of Australia's telcos in various groupings.But the department's deputy secretary Abul Rizvi told a Sydney conference today the matter of who would build the network was beside the point. "Never mind debates about who will build it or operate it — we will all be using it," he said.

"What does the general public know about these developments and the roll-out of the national broadband network? Not as much as it should or needs to I would suggest," Rizvi continued. "Currently the media debate over the commercial process is overshadowing the potential of the network."

According to Rizvi, Australians weren't as ready to take up the services the network will offer as they should be.

Telcos needed to be marketing the services to customers so there would be high levels of take-up when the services were eventually made available, he said: "When your product offerings come online, you want to preach to the converted. You will want instant recognition for your service, your downloadable content, your integrated media."

"They are your customers, your clients... It is time to start preparing the Australian economy and Australian society for a world after the roll-out."

Dr Tony Warren, Telstra's executive director of regulatory affairs, agreed with Rizvi. "We really do need to be starting to talk about ... why customers should be getting on it," he told the conference.

The executive said that although many Australians have jumped on the high speed broadband bandwagon there were still people who doubted the need for speed. "There's doubt on how many people will move, when they'll move and how much they'll pay for it," he said.

Stay tuned for breaking ZDNet.com.au telecommunications coverage, including video interviews with key participants at today's Informa broadband conference in Sydney.

Topics: Broadband, Networking, Telcos, Telstra, NBN, Tech Industry

Suzanne Tindal

About Suzanne Tindal

Suzanne Tindal cut her teeth at ZDNet.com.au as the site's telecommunications reporter, a role that saw her break some of the biggest stories associated with the National Broadband Network process. She then turned her attention to all matters in government and corporate ICT circles. Now she's taking on the whole gamut as news editor for the site.

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  • Nice idea, but dangerous..

    I agree that general consumers need to be notified well in advance of the benefits to switching to the new NBN once it's launched.

    The problem with that is your raising expectations years prior to when it will actually be available to consumers.

    If the process to date is anything to go buy, this massive infrastructure project will suffer from multiple delays, ineviatably leading to dissapointed consumers.

    Promote NBN now at your own risk.
  • Flogging a dead horse?

    Great, a NBN is built and Telcos get to market it. "We will all be using it" - yes, but at what cost?

    Based on their current marketing standards we can all expect to pay through the nose for any broadband.. even if it's not really true broadband from any Telco.

    If their current price structures are anything to go by in the current economic climate, no-one will be able to afford the latest NBN offering anyway.

    Just look at Foxtel for a price structure that has got completely inflated beyond control. Remember what the cost of that was 10 years ago? Strange how an excuse to go 'digital' with the same crappy content now costs at least 150% more.

    I wouldn't expect the NBN to be anything different.
  • Dead horse comments from a lame duck

    Someone who bring up a product that has demonstrated the benefits, value and understanding of the industry using private investment but only to attack it seems to be the one flogging a dead horse.

    Foxtel and Optus Vision (remember that name) were both launched about the same time (2 years in the industry is not that long).

    Foxtel had some advantages being able to run underground cable compared with Optus who refused to pay Telstra for access ran cables across power lines, at several stages taking councils to court so they would not need to pay access fees.

    Within no time both had an almost identical footprint meaning there was access competition in 40% of homes and none in the other 60% (rough numbers). The differentiation was content and obviously over time Foxtel won going into a content sharing agreement with Optus meaning people had more choice of content as well as two suppliers, if you include the regional / satellite there are three.

    With the Internet Telstra chose to go for speed and content while Optus went for cost, looking at the two fairly evenly competing networks for population many people choose Optus for pure GB price while others choose Telstra for speed and content.

    If you bothered to go and buy a HD set you would see the value of the additional cost. Me for one won't because TV to me is a source of news and occasional educational show (give me a HD computer monitor instead).

    The good aspects of the HFC networks was for the services it offered and the broadband speeds it provided to many. The issues this identified was that allow free and open competition and you will get most companies chasing the profitable localities and ignoring the less profitable (not just HFC but also general services such as mobiles, petrol stations, shopping centers, banks etc).

    Having a mandated network which encourages the provision of services across the country is critical but we do need the politics to stop and the engineering to start. This is a 20 Year network, this will need to ensure that Generation Z are not bickering like most of Australia is today.
  • Riiiiight

    What're you smokin Carlos?

    I dont understand how you can say private investment has brought benefit and value to pay tv when you look at the cost. Australian pay tv is no where near the price you can get it for overseas - with less channels.

    Telstra going for speed? Which company was it that limited ADSL to 1.5M for so many years?
  • "True Competition"

    Why would Telstra rollout ADSL 2 so OPTUS can sponge some more!!!

    OPTUS fanboys smell the roses!!

    What we need is True Competition so OPTUS will invest & stop sponging!!!
  • HFC an example why one NBN is all Australia needs

    There's a bit more to this story. Optus commenced the rollout its HFC network because of immense difficulties in gaining access to Telstra's infrastructure in a pre-deregulated market. Telstra viewing this as a threat to its fixed line business responded by rolling out a competing HFC network to virtually the exact same footprint as Optus. This move would have severely damaged Optus' business case for rolling out HFC to all major capital cities and shortly after beginning work in a couple of suburbs of Adelaide and Brisbane the rollout came to an abrupt halt. Telstra then announced their plans to halt their respective HFC rollout almost immediately after. As a result this left millions of customers originally on the rollout map with nothing.

    From a content perspective customers lucky enough to be covered by two networks fared little better as neither Optus Vision or Foxtel were able to gain a significant advantage through their enormously expensive, but mutually exclusive content deals. Pay TV was a complete shambles in this country with both Foxtel and Optus haemorrhaging money until Optus sold its content rights to Foxtel in 2002, providing Foxtel with a more complete content package and allowing Optus cash flow relief. In fact Foxtel has only just recently become cash flow positive, over a decade since it began offering services. If it weren't for the deal from 2002 and instead Optus chose to continue competing, neither company would have ever turned a profit.

    As you have already highlighted this resulted in only the most profitable areas being covered; however the interesting aspect of the debacle was Telstra's decision to invest significant capital in a network knowing it was almost certainly going never going to see a return, but after doing the math decided the risk of losing market share would have resulted in worse financial implications. In the end it was the consumers that suffered and this demonstrates why duplicate infrastructure is certainly not the answer for the NBN. We will only ever need one FTTx network; however it is absolutely crucial it is built in the correct environment where all players in the industry (including the owner if it is allowed to provide retail services) have equal and transparent access. If Telstra and Optus had worked together in the 90's instead of competing to outspend each other for exclusive sporting & movie content a great deal more would have been achieved.
  • How dare they

    How dare the federal government department ask this of telcos. If telcos weren't obsessed enough to talk and debate this issue with the media and others, then we'd end up with the government in Telstra's bed, and we know what the result of that would be.
    This just shows the government is getting frustrated by the telcos keeping a close eye on them.
  • Broadband - content - users - and "pair-gain" victims

    OK - Deputy Secretary Abul Rizvi (DBCDE) - I believe you and your statements - but I want you to clearly guarantee that NBN will indeed be available to those 98% of people - starting with those - like me - who are stuck on Telstra's pair-gain/RIM/Mux structures and who are NOT way out in the "bush" (just in local and regional areas like here on the Gold Coast).
    Clearly state and give a DBCDE guarantee that the NBN contracts, that your Department will be responsible for, will fix that FIRST - then I can take your admonition seriously.
  • Whatever

    Uh huh, and when Optus (with Elders) undertook such a MAJOR project recently, their attempt to do excatly what you are criticising got cancelled - thanks to your boy Conroy who is now having to honour an election 'marker' being called upon by Tel$tra.
  • The Opel project was canned for one reason

    Failure to meet contractual commitments as agreed upon by Opel and the former government. If they were delivering what was contracted they would have sued but as we know there was no law suit
  • WOW

    Other then a skewed comment at the start that could only be classed as defamatory against Telstra and if James was to work for Optus or one of the many bodies competing with Telstra it would get him in trouble but as he constantly states he doesn't.

    If the first paragraph was true it is amazing that the ACCC did not step in back then and sue the shlt out of Telstra for your claims of monopolistic and predatory behavior.

    Other then that James finally writes something that could be classed a unbiased.

    Yes back then there was no foresight and always remember the famous saying by some recently retired guy "640K is Enough For Anyone".
  • Passing the buck - typically Labor

    What the Commonwealth is really asking of ISPs is for them to do the Government's job of talking up the advantages of the new network.

    But what are the advantages?

    - A new network with half the nominal speed of the current ADSL2 network.
    - So-called 'new content' though no-one has come to the table with ideas of what this content would be.
    - Stupid comments from bureaucrats about how we will "all be using it" when we ALL know that is a crock.

    This is going to be another pear-shaped white elephant like most of the tollways in Sydney thanks to Labor and their incompetance and their lack of vision.
  • Competition please.

    The most disastrous result for NBN would be the establishment of a monopoly and the banning of all competition to it. It is puzzling to hear calls for an NBN monopoly from James and demonstrates how people will change their views when it suits their purpose.
  • "True Competition"

    What they are afraid of Sydney is "True Competition" and the fact that OPTUS may have to invest for a change instead of bludging of Telstra!!!
  • NBN Obsession? More Like Anti-Monopoly Obsession...

    None of the telcos want a repeat of the current climate, in which everyone if forced to do business with Telstra. Nobody wants to be in that situation under the new NBN scheme.

    And it will if Telstra is 'given' the bid by the Government in an underhand, ulterior motivated award by bureaucrats in the Federal Office.

    Rizvi's statement - "Never mind debates about who will build it or operate it...", appears so naive that one can only interpret it as indicitave of a hidden agenda and one that wants Telstra to win the bid (by whatever manipulative means available).

    A NBN built by Telstra would continue this country's high priced poor performing broadband infrastructure. Make no mistake about it.

    Open competition is the only way forward and this is what the rest of the Telcos and ISPs will bring. And with it a vibrant and dynamic infrastructure. A market capable of supporting a diverse range of clients and services.

    Labour want Telstra for whatever agenda they have (umm, how about $$$). This might be good for the Federal coffers, but outright disaster for the people of Australia.

    The reality is, if the Labour Government were to be evaluating the submissions based on real merit, Telstra would loose. Telstra stopped working in the interests of Australia a long, long time ago.
  • "True Competition"

    Telstra has said the network will be Open Access so I fail to see why you OPTUS Fanboys are worried about....

    What we need is "True Competition". The Free ride for OPTUS thanks to Cooonaaan & D#$%d Alston is over.

    Full marks for Conroy for recinding the hOPELess scandal saving Taxpayers a Billion dollars!!!

    Stop sponging & stop your whingeing!!!
  • True, open and fair competition.

    Telstra has told the Australian Government that if Telstra win the NBN build they welcome competitors to invest and oppose Telstra in the spirit of true competition to the benefit af all Australian consumers. What is the TERRiA position if they were to win the NBN build? Do they welcome competition or not?
  • yeah, right

    So does the suggested investment include digging trenches, building new exchanges etc - those sorts of things that Telstra never "invested" in the first place but were handed over by the Australian public? Telstra only claim to support competition because they know it is not feasible for anyone else to build a network without Telstra having some degree of control (e.g. access to trenches). No-one except Telstra wants a repeat of the cable debarcle. This country does not need multiple networks and going down that path can only lead to high prices - a fact that Telstra down seem to have a problem with because apparently their customers have unlimited cash flow.
  • Apologies

    Apologies for returning to an old post, but I only just saw Carlos' comment and felt somewhat compelled to respond to this one.

    "If the first paragraph was true it is amazing that the ACCC did not step in back then and sue the shlt out of Telstra for your claims of monopolistic and predatory behavior."

    It's not amazing at all because the ACCC did not even exist until 1995 when the network rollouts had already commenced! In addition to this amendments were not made to the Australian Telecommunication's act until 1997, which placed tougher rules on carriers ability to build infrastructure.

    It is clear that Telstra expanded its HFC network knowing the costs of building and maintaining the network would always significantly outweigh any revenue, so yes Telstra's behaviour was predatory and merely an act to defend its monopoly market share by damaging its only competitor at the time. This not only succeeded in damaging competition, but left hundreds of thousands of consumers with nothing.

    There are no other countries in the world that I'm aware of (USA included) where such significant overlap in cable networks exists. Telstra HFC covers approximately 90% of the Optus HFC footprint. When Optus announced in 1997 that they would cease the rollout of its network Telstra made the same announcement almost immediately after.