NBN Co inks $620m satellite deal

NBN Co inks $620m satellite deal

Summary: NBN Co has signed a $620 million deal with US communications giant Loral to develop two Ka-band satellites for the satellite-broadband component of the of the National Broadband Network (NBN) roll-out.

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NBN Co has signed a $620 million deal with US communications giant Loral to develop two Ka-band satellites for the satellite-broadband component of the of the National Broadband Network (NBN) roll-out.

How the satellite will look.
(Credit: NBN Co)

The satellite portion of the NBN will be up and running by 2015, and will cater to almost half of the final 7 per cent of Australia not covered by the fibre roll-out, as well as external territories of Norfolk Island, Christmas Island, Macquarie Island and the Cocos Islands. It is expected to provide broadband services for 200,000 premises at download speeds of 12 megabits per second.

The negotiations with various satellite providers took place over two years, and the contract is part of a $2 billion investment for the satellite service.

In addition to delivering the satellite service, Loral will also be providing telemetry, tracking and command systems for the satellite service.

The deal was announced this morning at a press conference by Prime Minister Julia Gillard and Communications Minister Stephen Conroy.

The first satellite will be launched in early 2015, and the second satellite is planned to be launched six months later.

NewSat reportedly complained to the Australian Financial Review that the deal wasn't given to an Australian company, such as NewSat, which is planning to launch its Jabiru-1 satellite in 2014. Conroy said that although NewSat is an Australian company, the Jabiru-1 satellite is being constructed for it by US defence giant Lockheed Martin.

"There are only five companies in the world that can build these satellites," he said; three in the US, and two in Europe.

NBN Co CEO Mike Quigley declined to reveal unsuccessful bidders, stating that information is commercially in confidence.

Gillard said that the satellites have not been named, but indicated that the government may hold a competition to name them.

NBN Co indicated that there are two more tenders as part of the satellite service yet to be awarded, but said that these will be announced soon.

"NBN Co is evaluating supplier submissions for the construction of satellite ground systems, and in coming months will release a tender for the launch of the satellites into orbit," NBN Co said in a statement.

Currently, NBN Co has an interim satellite solution in place for the households set to receive satellite NBN services. The interim service can provide download speeds of 6 megabits per second.

Topics: NBN, Broadband, Emerging Tech, Government AU

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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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20 comments
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  • Satellite technology is always a backward step when it comes to providing broadband. No matter how much bandwidth satellite provides the distance between the earth & satellite is its biggest downfall.
    On average most geostationary satellites which sit in the Clark Belt are 37,500km from earth. Doing aproximate calculations thats around 75,000km which will take on average 600ms to 800ms pushing ping times for video conferencing, VOIP & low latency gaming beyond usability.
    In this modern time the country will still be light years behind the rest of the country.
    fibretech
    • @Fibretech so how would you propose to give broadband to a residence that is out in the middle of the Australian Desert and there is not another building for several hundred kilometers in any direction? Whilst I agree Satellite is a poor substitute for fibre or Wireless I can't think of any other way to give that poor sole broadband.
      Spiraldeath
      • @Spiraldeath Don't you think every tax payer deserves the same level of QOS? After all these people are leaders in primary industry which is the backbone of Australian's economy.
        My point is that this service is a poor substitute when these tax paying citizens are subsidising the cost of fibre to yours & my house.
        fibretech
        • What's the alternative fibre tech?
          mwil19-a34f7
          • I know many people won't like this (not that you can please everyone anyway) but in one word "Equality"
            fibretech
          • In a perfect world you'd be right but it would never be viable to run that much fibre given the population densities in Australia's most remote areas. Remote areas of Australia don't have equal access to many things that should be addressed before we worry about high speed broadband (water quality, fresh food, education, health)
            mwil19-a34f7
        • fibretech, that's totally wrong.

          The metro users of the NBN will be subsidizing the NBN services in the regional zones because they cost more to provide than metro services.

          You have to draw a line at some point before it is placing an unreasonable burden on all the users to subsidize the more remote users. Where that line is drawn is 93% of the population for fibre, 97% for fibre or wireless, 100% for fibre wireless or satellite.

          Sure you might argue that we should cover more than 93% of the population with fibre and increase the flat wholesale price for everyone to pay for it, but you must draw a line somewhere.

          Your logic implies we should cover EVERYONE with fibre. That would cost hundreds of billions and to make a return on the investment they'd have to charge far higher wholesale rates to everyone.

          (Incidentally the original proposal was for 90% coverage with fibre, but they were able to push that up to 93% in the final calculations)
          tsudo77
        • @Fibretech Yes I agree in a perfect Star Trek utopian society they should get exactly the same service but unfortunetly we are not, most of those people you speak of still have dirt roads should we upgrade all their roads to tar while we are at it. Speaking of which they probably run off tank water and spectic tanks should we also give them water pipes and sewage pipes as well.

          Not to mention if the NBN did run fibre to their front gate that might still leave hundreds of kilometeres of fibre to run just to get to their house.

          For some of these people to get Fibre it would requrie some peoples individual connections to cost millions of dollars how would that ever be possible...

          And thats not to say that as things progress these Satellite and Wireless connections do not get upgraded....
          Spiraldeath
  • This is my point of view and like I said I cannot please everyone and I'm not going to try.

    Nor am I arguing about the economics, what I am saying is that EVERYONE no matter where they live in this country deserve the same QOS as the people in the city now enjoy.

    If satellite is good for the country then it should be good for everyone, right?

    My personal view is clear and simple, equality for all tax payers regardless of their location. Remember this is my personal view not law or how it will turn out.

    Enough said.
    fibretech
    • You may not realise but massive numbers of metro suburban citizens cannot currently get broadband and many more cannot get anywhere near the 12Mb/s that these deprived satellite user will be getting. I bet in 5 years time as a Perth Metro suburban resident I will still be waiting for some kind of decent internet service.
      I wil return to this page in 5 years and report !!!
      harryinthesoup
    • So what are you suggesting? Equal QoS at any cost?
      xfire-db15e
    • Well your cred is about sitting with Mal after these silly statements. Take a copy of your "view" and take a look when you grow up.
      Knowledge Expert
      • Why is it when people try to have an intelligent conversation based on facts that there will always be someone who wants to launch uneducated personal attack & can offer no real response.
        Thanks Doubt for your positive outlook and your lack of vision. There is no guessing on who you will vote for next election.
        Bandwidth is not the issue, it the latency which satellite has no way of over coming.
        fibretech
        • But I am having an intelligent conversation young fibes, my point is the lofty goal that all are equal is unfortunately not so. That is why some live on the Sydney harbor waterfront, others live in dusty outback towns, still more are packed into blocks of units, isn't fair but that is the natural order of things.
          Knowledge Expert
  • What fibretech seems to be saying is that it shouldnt be enough that 93/97% get better than satellite. 100% should. If I've misread your view fibretech, I appologise.

    In that regards, I agree. They are spending $600m, give or take, to provide 1/6th the capability of even the wireless connections.

    What would it cost to hardwire the 200,000 premises the satellite option is meant to cover? More? Less? Thats a large amount for 3% of the population.

    I can see that from a logistics point of view it would be a nightmare, and that a line has to be drawn somewhere, but is that line of 200,000 premises merely to justify spending $600m?

    Having said that, I can also see that it is a practical solution. If anything, if done right, they should have a much better connection than expected, and something much closer to a fibre connection. Which covers a lot of fibretechs issues.

    Japan launched a satellite (called Kizuna) in February 2008 that provides 155/6 Mps, scaling up to 1.2 Gps if you have a big enough satellite dish.

    While latency would clearly suffer compared to a landline, if those speeds can be delivered its not that bad an option, and one that can be used as a backup in other situations.

    Personally speaking, I cant wait for the NBN to get to me. I live in Wollongong, with 1 corner between me and the nearest exchange. I can literally see if from the front door.

    Yet with an ADSL2 connection, I can barely get a 6 Mps connection. Thats disgraceful given my location, and the age we live in. Bring on the NBN.
    Gav70
    • 100% fibre does not add up.

      $600,000,000 divided by 200,000 is $3000 which is only $100-$300 more than the average provisioning cost for fibre to the 93%. There is an excellent graph in the NBN design documents that graphs total cost against delivery percentage and pretty much shows an exponential increase past about 90%.

      There is no realistic way to provision a country the size of Australia with 100% fibre.
      Richard Laxton
  • It amazes me that the government has gone ahead with geostationary satellite. The problem with the existing IPStar geostationary satellite service is not download/upload speed, but latency (and if there is cloud/rain or smoke, reliability). Latency is not just bad for gamers and voice/video comms (eg Skye), but even for opening web pages (with require multiple GET requests).

    You can't change the laws of physics, so the only way a satellite service can deliver lower latency is by moving it closer to the earth. But NBN Co and Gillard/Conroy excluded this approach from the start. Why?

    If it were me, I would keep the existing IPStar satellite for the last sat 1/2 percent, use terrestrial wireless for the next 3 or so percent, and then fibre to the rest. In fact, anywhere that currently has a copper phone line should get fibre. If we were able to lay copper last century, surely we can manage fibre today?

    Failing that, LEO/MEO satellites.

    Why does government always manage to spend large amounts of money on third rate solutions? The government is frittering away billions on the NBN, but in the rural locations I operate in, won't improve my existing (poor) connectivity options. Nobody will thank them for locking us in to backward technology for the lifetime of these satellites.
    jharrop@...
    • I think geostationary satellites have a longer life span as they use less fuel to keep them in position.
      Knowledge Expert
    • It seems to me that on the launch timeframe contemplated, they could probably have negotiated with Iridium for use of its next-generation LEO satellites when they come online from 2015-2017. They could put a ground station in AU (or 2, one in SYD, one in PER). They would be offering 8 Mbps, according to their documentation. It seems silly to rule out LEOs - as long as the service provider is paid on some basis that ensures that in the event of default, you still have service continuity for 10->30 years, who cares?

      But as for "frittering away billions", I'm afraid I have to disagree with you; offering widespread bandwidth for small business should allow much greater opportunities to be available. It seems to me hard to predict just how much productivity may be gained by the NBN, but I feel confident that it's more than it costs.
      mvdk
    • If you want LEO prepare to spend a lot more than $600m

      LEO satellites move relative to the surface making ground antenna design significantly more complex. You also need really large numbers of them to ensure that there are a couple in sight at all times. For example GPS has 32 satellites, GLONASS has 24 and Iridium has 66.
      Richard Laxton