Misleading wireless stats harm NBN debate

Misleading wireless stats harm NBN debate

Summary: It was too juicy a morsel for those arguing against the National Broadband Network (NBN) to ignore last week: the latest ABS stats appear to show that wireless is outstripping demand for fixed connections in the home. However, a closer look shows that they do nothing of the kind.

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It was too juicy a morsel for those arguing against the National Broadband Network (NBN) to ignore last week: the latest ABS stats appear to show that wireless is outstripping demand for fixed connections in the home. However, a closer look shows that they do nothing of the kind.

The June 2011 Internet Activity Report from the Australian Bureau of Statistics (ABS) shows that the proportion of broadband connections using wireless devices (tablets, laptops, Kindles etc — but not mobile phones) has exceeded those on a DSL fixed-line connection. But the numbers present a confusing story that actually serves to muddy the broadband debate.

The subsequent misreporting highlights a weakness in the way that the ABS presents its data. Andrew Colley reported in The Australian, for example, that "the number of consumers using some form of wireless service for their broadband, excluding mobile handsets, has surpassed the number using copper line ADSL for the first time".

Whether he's correct or not depends on your definition of consumer. I've always considered a consumer to be distinct from a business customer, and herein lies the problem. The latest figures from the ABS are an aggregate of consumer and business subscribers. They do break down subscribers by type, but we don't know how many are wireless and how many are fixed. More importantly, we don't know how many have both types of connection.

It's important to break out the consumer sector, because business users will be severely skewing the results. In a business, you'd expect growth in wireless devices to far outstrip the number of fixed connections. A business of 20 people might need one or two wireless devices for each staff member, but still only one fixed-line connection.

Subscriber stats (Credit: ABS)

So we really need to see the figures broken down into business and household categories to see what impact mobility is having on fixed-line demand.

But even that is not enough to get a real picture of what's going on. ABS figures for June 2010 show that there are 8.7 million household subscribers. That's impressive penetration, considering that there are only 8.3 million households in the country.

How can this be? Well, the ABS presents its data as if one connection is a substitution for another type. Dial-up, DSL, cable and the like are added to the number of mobile wireless connections to come up with a total for "number of subscribers". That, of course, is not the case. A subscriber could have fixed and wireless access — if you have both, the ABS counts you as two separate subscribers.

Consequently, we're seeing the figures misconstrued. A rise in wireless is being seen as a substitution for fixed broadband by some who look only at the top-line figures, when it's likely that wireless is being used in addition to a fixed connection.

So here's what I reckon the ABS really needs to measure (tell me if you see it differently):

  1. How many individual households have an internet connection?
    (of those, how many fixed-line and wireless connections do they each have?)
  2. How many individual people have direct access to an internet connection?
    (of those, how many fixed-line and wireless connections do they have?)
  3. How many businesses have direct access to an internet connection?
    (of those, how many fixed-line and wireless connections do they have?)

There would have to be some way of ensuring that wireless connections weren't "double counted" (for example, a business claiming that 100 workers have a wireless laptop, and those 100 individuals are counted independently). Who's to say that there's not an element of that already happening?

This approach would give us a clearer picture of whether any fixed-to-mobile conversion is actually happening. If it is, it would be interesting to know whether this is because of a particular household type (eg, shared, rented, etc) or whether it is down to the available speeds. Has someone chosen wireless because DSL speeds are low, for example.

Otherwise, sorry ABS; the figures are becoming increasingly meaningless and (in the current political climate) they just provide ammunition for the anti-NBN lobby. We should, of course, debate whether the government's approach to broadband is the right thing to do or not, but let's use meaningful statistics to support our arguments.

Topics: Broadband, Networking, NBN

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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55 comments
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  • +1 Phil
    Beta-9f71a
  • I am one of the TLS shareholders and i disagree, simply because i don't like the NBN.
    Salami Chujillo
    • Well you are a goose for investing in Telstra in the first place.

      Why do you disagree with the NBN? Why do you dislike like the NBN?

      Disagreeing just because you don't like the NBN is a bit silly and selfish. The NBN is going to benefit everyone.
      Jingles-8366c
  • No, no, Salami, get it right!

    You don't like NBN because it will cost $150Bn and will be made obsolete within five years by marvellous but as-yet-unknown advances in wireless tech.

    Nothing to do with your large and trusting punt on Telstra shares, you see. . .
    (and +1 Beta; couldn't resist adding my ten cents worth)
    anonymousI
    • LOL...+1 reciprocated

      don't forget... we don't need an nbn because what we have is good enough, there's no proof technology will continue to improve ... (wait for it - and in the next breath)... history shows wireless technologies will keep improving and make fixed obsolete...sigh!

      the list goes on.

      let's not forget this gem... wireless will be a real 'competitive' force to the 'monopoly' nbn (think about that one, then giggle)...!
      Beta-9f71a
  • The problem is not that NBN fibre will be made obsolete, but NBNCo's prediction on page 118 of the NBNCo Corporate Plan that 50% of customers will choose 12/1Mbps (e.g. the cheapest option). What the increasing number of wireless subscribers demonstrates is that most people will have access to wireless to test the performance. For many people that NBNCo are predicting will connect at 12/1Mbps, they may well find that with 4G, wireless is cheaper and faster! NBNCo are already predicting that 13% will opt for wireless because it is cheaper than the NBN (page 116).

    Sure wireless will never technically be as fast as fibre, but NBNCo have chosen to cap the fibre speeds making it a non-issue. Almost all the innovative NBN applications won't work on the slowest plans (page 131). There is a vocal element supporting the NBN who are dreaming of 1000/400Mbps unlimited plans, but have failed to read the NBNCo Corporate Plan and see that 1000/400Mbps doesn't even appear until 2026 (page 118).
    mathew42-bc1ae
    • "NBNCo's prediction on page 118 of the NBNCo Corporate Plan that 50% of customers will choose 12/1Mbps"

      False. NBNcos prediction doesn’t say that at all. It says 64% will chose 25/5mbps or higher by 2028. +50% at 12/1mbps is only up until 2017. Are you going to try and tell us that the prediction is only valid up until 2017?





      "There is a vocal element supporting the NBN who are dreaming of 1000/400Mbps unlimited plans"

      1000/400Mbps unlimited plans? I've not seen anyone on any websites say such a thing so perhaps you point a few URLs out. Come to think of it the closest that has come to saying anything that resemble this would be you complaining about the tiered speeds.





      "but have failed to read the NBNCo Corporate Plan and see that 1000/400Mbps doesn't even appear until 2026 (page 118)."

      Seems you are the one that has failed yet again. 1000/400mbps plans appear in 2024 not 2026. That is just one of many errors you make.
      Hubert Cumberdale
      • 36% is still a huge percentage of the customer base who are vulnerable to competition from wireless. In another decade one would expect that wireless speeds have further improved placing even more competition on the NBN.

        If 1000/400Mbps plans do appear in 2024 then it has to be less than 1%. In 2028 it is still less than 3%.
        mathew42-bc1ae
        • "36% is still a huge percentage of the customer base who are vulnerable to competition from wireless."

          I dont know if you've noticed but 64% is actually a bigger figure than 36%. Regardless the more people switching from 12/1mbps to wireless as you say means the percentages will go up for the higher speeds totally negating the prediction in the NBNco corporate plan you are so sure is set in stone. Time to update your figures.


          "In another decade one would expect that wireless speeds have further improved placing even more competition on the NBN."

          In another decade one would expect that wireless speeds have further improved along with satellite speeds meaning that NBNco could possibly dump the 12/1mbps plan altogether themselves (Primus isn't even bothering with it now) which would once again negate the prediction in the NBNco corporate plan you are so sure is set in stone.


          "If 1000/400Mbps plans do appear in 2024 then it has to be less than 1%."

          Of course it is less than 1% that doesnt change the year it is made first available indicated on the graph.


          "In 2028 it is still less than 3%."

          It's probably closer to 2% so your point here is what? I'm not the one arguing for 1000/400mbps (unlimited or not) in 2012 right off the bat but I will point out that the graph shows in 2028 connections with a speed of 100/40mbps of more are at 58% and greater than 250/100mbps at 44%. Both those figures are larger than 36% so I'm sorry to say your argument is looking even more flimsy now.
          Hubert Cumberdale
    • The graph on page 118 - I remember it, but just checked to be sure - does not actually indicate when 1000/400 services will first become available. It only shows a VERY conservative estimate showing the takeup spread of speeds, over time.

      It presupposes that takeup of that top tier will be minuscule until the mid 2020s. I believe this is way too low (there will be at least 5% top speed takeup from day one, because that would be the minimum cohort size that would automatically sign up for the top speed available at any time). But then, I accept that the projection is extremely conservative.

      There is one other important detail that you have missed. The first appearance of speeds greater than the current maximum of 100/40 Mbps comes in 2015, when the 250/100 speed tier makes an appearance.

      Now I'm not absolutely sure of the technology pathway, but I have not heard of there being a hardware step inbetween the current 100/40 setup and the Gigabit hardware that will enable 1000Mbps downloads (and presumably, 400Mbps uploads). Which would tend to suggest that Gigabit speeds will start to be possible from around 2015-16 onwards. And that accords with some statements that I seem to recall, but cannot verify at the moment.
      Gwyntaglaw
      • I'm not aware of a single RSP that is providing a 1000/400Mbps plan at the moment.

        What I don't understand is why so many people support NBNCo with their speed tiers when they are building a first class network and delivering third class services.
        mathew42-bc1ae
        • if that is the case...

          it's still surely better to have a first class network with the capability of first class service, than intentionally building a third class network, which will only ever supply third class service, and gifting $b's to mates in private enterprise to build and own it!
          Beta-9f71a
          • What is the point of capability if most people cannot access those capabilities?

            NBNCo's KPIs appear to be offer a plan slightly cheaper than ADSL and return 7%. There don't appear to be any KPIs around delivering faster or greater downloads. If you read the NBNCo Corporate Plan some rather unpleasant number start to appear.
            * Page 101: 1000/400Mbps falls from $150 to $90, while the average speed grows from 30Mbps to 230Mbps. So price falls by 40% while average speed grows by 7.6 times.
            * Page 103: CVC is priced at $20/Mbps/Month is for Average Data Usage of 30GB/Month. When Average Data Usage reaches 600GB/Month the CVC falls to $8/Mbps/Month. So the price falls by 2.5 times, while the data usage grows by 20 times.
            Many times in the NBNCo it talks about driving the ARPU up.
            mathew42-bc1ae
          • sadly mathew you only seem to play the one tune.

            i have read your pg 118 12/1 spiel, I'd suggest at least 6 times over the last fortnight, with the same reply coming from hubert, rofl...
            Beta-9f71a
          • And you'll have noticed from Hubert's reply that he avoids the whole issue of wireless being cheaper for the 36-50% that NBNCo are predicting will choose the 12/1Mbps plan and the potential impact that has.
            mathew42-bc1ae
          • I didn't avoided the wireless issue at all, I mentioned it right here but that is not the point, you've made an assumption based on what is in the NBNco corporate plan. Nothing more. You are assuming people will jump from 12/1mbps to a wireless plan and assuming some wont see 25/5mbps for just $5 more as a bargain. Sure there is always going to be those that are looking to save a few bucks but so what, if anything that number for 12/1mbps plans will decrease not increase.
            Hubert Cumberdale
          • One would assume that NBNCo's modelling would have already taken into account people who were willing to pay $5 more, and placed them in the 25/5Mbps speed tier. The NBNCo numbers are arguably the most accurate we have.
            mathew42-bc1ae
          • NBNcos prediction is conservative and not set in stone. It even says on the front page 2011-2013, if more people happen to choose 25/5mbps over 12/1mbps in that period what do you think the graphs will look like then? Do you really think NBNco are going to be sticking their fingers in their ears saying "la la la la, this is all wrong! this is not what we predicted, we have failed, cancel the rest of the roll out!"
            Hubert Cumberdale
          • No ... page 132 of the NBNCo Corporate Plan clearly outlines the response if the assumptions fall short:
            "This would limit opportunities to grow ARPU in real terms other than by price increases at that time."
            mathew42-bc1ae
          • People choosing 25/5mbps over 12/1mbps is not falling short.
            Hubert Cumberdale