Tasmania NBN Co goes into sale mode

Tasmania NBN Co goes into sale mode

Summary: The Tasmanian arm of NBN Co is approaching access seekers in preparation for the fibre network's July activation, but households will likely need to fork out at least $129 per month to get a 100Mbps service.

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The Tasmanian arm of NBN Co has started approaching access seekers in preparation for the fibre network's July activation, but households will likely need to fork out at least $129 per month to get a 100Mbps service.

Doug%20Campbell-440w.jpg

Doug Campbell, head of NBN Tasmania (and Market Clarity CEO Shara Evans)
(Credit: Liam Tung/ZDNet.com.au)

NBN Co has hired former Telstra executive Gary Searle who has been tasked with the job of negotiating access to the network.

"I can confirm that Gary Searle works for us and is working in the area of looking after retail service providers that are seeking access to the network," NBN Co Tasmania's general manager Doug Campbell told ZDNet.com.au.

Searle's initial focus in Tasmania has been on negotiating deals for the towns selected for early deployment by the Federal Government. Around 5000 households from Scottsdale in north east Tasmania, Smithton in the north west of the state, and Midway Point near Hobart are expected to have access to a 100Mbps service by July this year.

The take-up within these towns will likely depend on the service's cost. Campbell declined to comment on likely pricing; however, iiNet's regulatory affairs manager, Steve Dalby, said it hoped to offer pricing in Tasmania that was consistent with other areas it has a fibre-to-the-home product, such as the Alamanda Estate in Point Cook, Victoria.

iiNet currently offers households in the estate a 60GB off-peak and 60GB peak quota service with 100Mbps download and 5Mbps upload speeds for $129.95 per month, and a similarly structured 180GB service for $159.95 per month. At the low end, it also offers a 25Mbps download with 1Mbps upload service on a 10GB per month service for $49.

"We're working internally towards the same products we have in Alamanda, which are fibre to the home. We'd like to be offering the same set of products there off the NBN," Dalby said. "We reckon we're NBN-ready, so let's go to the next step."

Internode's carrier relations manager John Lindsay confirmed that it had been in contact with Searle, but declined to comment on likely pricing. Lindsay said he was "pleased" with the progress of the NBN's roll-out in Tasmania.

There has been some concern amongst carriers that households at Scottsdale, Midway Point and Smithton may not see the value in such high speed services, since they have never had access to such services.

Campbell said that NBN Co Tasmania would start community consultations and newsletter drops in conjunction with retail providers to convince users of the benefits of a high-speed service.

Topics: Telcos, Broadband, Telstra, NBN

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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Talkback

40 comments
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  • Nope

    There is no way I'd pay $130 p/m for the connection when I can get good ADSL speed for $60 p/m.
    anonymous
  • ~

    I agree. Since the thing is still government-owned there should be a period where a slower return on investment occurs to allow the service to be affordable enough for everyone to connect and then in turn allowing economies of scale to pay the network off.

    This pricing is Telstra-esque although probably not as bad as what Telstra would charge if they held the reins but still completely unaffordable for Mr Average especially when line rental, phone rental and calls are added.

    $130 per month is nothing short of unrealistic.
    anonymous
  • Big numbers cometh.

    I would expect that as more capital is deployed and huge over-runs occur the price of the service will escalate dramatically.

    Do the math and correlate what must be charged to get a commercial return on 43 billion+ dollars.
    anonymous
  • Not at that price

    Same. It's going to need to compete to ADSL/ADSL2 prices.

    There's not that much I need to download that quickly to warrant spending twice as much.
    anonymous
  • It might be big numbers, but that doesn't mean price rise that you think of.

    I haven't seen a Gov owned or private enterprise rise their pricing during a network rollout yet.

    The following: Singapore, Japan (even with subsidize), UK, USA (Verizon and AT&T, both Fixed line and Wireless), Telstra (NextG), Axia (France, Canada) and so on.

    Infact there is one thing that is keeping on getting higher prices, its called competition.
    anonymous
  • Disappointing

    These initial conjectures on pricing are somewhat disappointing, however it must be realised that the only indications provided thus far are from a potential wholesale purchaser who is making comparisons with a very small scale commercial estate. Is this really valid?
    @ Sydney Lawrence - your predictions of doom are groundless. No facts, no supporting argument, just FUD. What makes you expect that over-runs will occur and the cost will be $43b+. Very tiresome.
    anonymous
  • Sign me up!

    I'd GLADLY pay $130/month for a 100Mbit UNLIMITED download connection.

    I'm currently paying $110/month for a 3Mbit connection with a 150GB download limit that I regularly run into.

    Even though I pay for a 24Mbit ADSL2+ connection, I only get 3Mbit due to distance from the exchange.

    However what everyone seems to be skipping over, and has largely been ignored by the press, is the question; Is the NBN going to have data caps?

    I have no interest in a NBN that is limited to a set amount of data per month. We're got that now and it's hurting Australia's IT industry and innovation as it is.

    Get rid of the download limits!
    anonymous
  • 99.99% of builds have cost over-runs.

    Tailgator I am in respect of your extensive knowledge of the subject but could you tell me why you think there will be NO cost over-runs?
    anonymous
  • Whos pays for the data then?

    @ Chris McMahon

    and who do you want to pay for the data that you are getting for free?

    You do realise 'the interwebs' is over the other side fo the world don't you?
    anonymous
  • Like Christmas it's coming.... MAYBE.

    Break out the champers NBN Co you have one customer. Hope you are youthful Chris because the delivery of service may take some time.
    anonymous
  • definitely

    break out the champers. in years to come we will have a nbn and telstra shares will be worth $1.50.
    anonymous
  • Did you even read the story...?

    The price is based on parity with an iiNet plan that features 60gig on/60 gig off peak quota. So, less data than you're on at the moment.

    The 180 gig plan is what, $159. So for only 30 gig more a month and a full 100 Mbit, you pay an extra 50 bucks a month. I'm sure some people will take it up at that price but I doubt it will be a significant portion of the population.

    And the 25 Mbit plan, if it exists under NBNco, will be the most popular by far... I wonder how far that goes to paying the bills...
    anonymous
  • Peter T.

    I just went from paying $85 pm for an 8Meg ADSL connection to $40 pm for an ADSL2+ connection. This is more than adequate for what I need. At the moment, I've no way of really making use of a 100Meg connection. Until decent IPTV or something similar is available, 100Meg at $130 pm is just a waste of money! What's more, given that it is FTTP, its not a connection that I can take with me for my laptop. I still have to have a second account for that.
    anonymous
  • Yep

    I would.

    I can't get good ADSL speed for $60/month. Given Internode is mentioned in the article, I'll take there offering for ADSL2+ in my area: 100GB @ $139.95/month.

    Now 120GB @ 100Mbps/5mbps even with peak/off-peak split is MUCH better value than 100GB @ 1.5-20Mbps/0.5-1Mbps, wouldn't you agree?

    There are still truckloads of people out there who have been ignored by the cherry-picking ISPs of the world, and cut-price ADSL isn't even on the radar where I live (a suburban area).
    anonymous
  • Rate of return will be very low

    Some back of an envelope scratchings...

    It you put aside the idea of the risk of building this infrastructure, and look at it as a utility, then you could accept lower ROI - say 8% which is very low after inflation and potential financing costs... assuming that the govt is correct and it costs $43Bn to build out, then the return would have to be greater than $3.4Bn pa NET of costs. At a gross retail return at $130 per month, 2.2m households will need to take it up to generate that much cash.

    These figures are based on the retail price only... the real cashflows would be based on the wholesale charge, minus their costs. So if we assume that the wholesale cost is 50% of the retail price, ie $65 per month, and they make a 50% margin on that, ie they get 25% of the retail price as profit, (these are just for illustration), then approx 8.8m households will have to take it up to generate the requried 8% return.

    If you start to look at the risk of the project, a commercial concern would likely want something more like 18% ROI or higher. To get 18% ROI (using the list of assumptions above) return would need to be $7.74Bn, and at a 25% clip of the retail price, 19.8m households would need to take it up.

    Clearly these are numbers just for illustration/discussion, and it is likely that the operating margin of NBNCo will be slimmer... so the figures would be more marginal. This indicates to me that the network will most likely need significant government support for some time to come if the participants are to achieve a commercial return.

    I would really like to hear if anyone with more knowledge of how the industry works could shed more colour on the likely wholesale profit margin...
    anonymous
  • Why crippled

    What's with the 5Mbps upload speed? It needs to be synchronous. I get the feeling they are doing this to keep us down as "dumb consumers that will accept the content we shovel to them and not provide their own".

    The excuse of crosstalk was used for ADSL, but surely there is no technical excuse for crippling the NBN upload speed?

    To become a smart nation (one of the reasons for the NBN), we need to produce and offer our own content. We need to be able to collaborate. We cannot do this with a crippled upload speed.
    anonymous
  • Not enough

    I think it's ridiculous adding download quotas to a fiber connection. A 100Mbit connection with 100GB downloads can us its monthly quota up in just over 2 hours. If you're going to roll out fiber make it unlimited, we're one of the only countries in the world that meter traffic.

    While I'm excited about getting the NBN in Tasmania first, I think it's not a particularly clever idea for a number of reasons:

    1. We don't have enough national backhaul, there will be a bottleneck across Bass Straight if every man and his dog is on a 100Mbit connection.

    2. Not enough International backhaul. Even if we do have enough backhaul to the mainland there is going to be a massive bottleneck to the US and Asia. We will be given 100Mbit connections that will be of little benefit (given that most content is hosted overseas) until there is more backhaul to the US, ultimately we will still be getting less than ADSL2 speeds internationally.

    2. Local (national) data should be unmetered at the very least. This would be of little cost to ISPs, this promotes people using the new NBN intelligently by setting up VPNs and other smart, productivity increasing services.

    3. If people are getting metered data they aren't going to be using the connection the way it is intended, they will be hesitant about downloading, streaming or accessing any high bandwidth content (which the NBN is supposed to promote) because they will end up becoming capped.
    anonymous
  • What's the point?

    I agree. If we as tax payers are supposed to fund this infrastructure to the tune of $43B in the name of global competitiveness then I expect our service to be in line with the countries we will compete against. This means 1) Full duplex at 100MB/s 2) No caps 3) Low cost pricing.

    Don't waste my time or money for anything less!
    anonymous
  • Uplods

    Should also have symmetrical bandwidth 100Mbit up AND down. If people are setting up intelligent services they're going to have to upload data as well. Does someone know why the upload is so slow? I thought ADSL upload was slow because you saturate the copper line with bandwidth.

    Wouldn't Fiber eliminate this problem?
    anonymous
  • No it actually is good value

    Read the article properly prats.

    "At the low end, it also offers a 25Mbps download with 1Mbps upload service on a 10GB per month service for $49."

    10 gig with 25mb download and 1 meg upload is pretty good value, equal to most ADSL2+ plans. Same speeds, same quota, less reliability issues.

    Compare the costs of the 100mb plans against existing business fibre services, those that start at $1000 a month, $130 a month is cheap.
    anonymous