Telstra and TransACT will shortly begin offering 100Mbps broadband to many customers. By moving early, the companies have not only raised the bar for Australia's broadband services, but thrown down a challenge to a government that now faces increased pressure to deliver the NBN as promised.
It's amazing what telcos can do when they put their
heads to it. Telstra, TransACT and Optus
announced last week that they would switch on 100Mbps internet
services — making ADSL customers green with envy and, one might
suspect, Stephen Conroy green with worry.
The NBN isn't the only way Australians can get 100Mbps services, the telco giant has proved; it is now up to the government to match and exceed Telstra's example.
With actual, purchasable 100Mbps consumer services out there in
the real world, Australia's broadband market will change
dramatically — not in terms of what most speeds people are actually
getting, but in terms of what everybody else's services are
compared to. Bet your booties that all three companies, which have
first-mover advantage thanks to their turbo-charged fibre and
hybrid fibre-coaxial networks, will be working to raise the bar as
high as they can.
Let the services begin, as they say in the classics. What
services? The long-elusive triple play — telephony, television and
data — is a good place to start. They may be a footnote to its
ongoing political intrigues, but Telstra has been steadily building
its credentials as a triple-play provider: increasingly flexible
Foxtel packages now reach mobiles, smartphones (including,
recently, the iPhone), and even allow viewing of video via the
It's all part of a strategy to add more flexibility to shift its
video interests online — not only because it sounds cool, but
because a data-based video stream allows Telstra to look beyond the
edges of its own network and onto the eventual NBN.
For now, however, Telstra's 100Mbps customers are limited to its
own HFC network, which makes these initial services as much about
expectation-setting as anything else. But there is a bigger game
afoot here as Telstra proves a very big point with the
The proven ability to deliver 100Mbps services to large numbers
of customers is a big step for Telstra — like when your little
brother says he can eat more worms than you, and then does. In
delivering real 100Mbps services like it said it would, Telstra has
shifted the onus onto a government that now faces even more
pressure to deliver the NBN as designed.
If problems derail the NBN, or if it cannot deliver the same
experience Telstra's cable network can, Telstra will score no small
amount of philosophical bragging rights. Ditto TransACT, which has
long provided some pretty excellent triple-play services to
residents of a few select pockets of the ACT; its content offerings
already well established, the addition of 100Mbps is not so
confrontational as evolutionary.
Even Optus — which will be third to
the market with 100Mbps but still has good reach with its HFC
network — isn't going to be sitting around waiting for the NBN.
So, while Telstra's HFC network is still limited to the same 2.5
million households or so that it has always serviced, its
head-start in building customer loyalty should not be
underestimated. Telstra has several years to set customer
expectations for 100Mbps internet in Melbourne, potentially
becoming the favoured provider — and developing strategies to
counter the eventual introduction of the NBN.
Even as the government continues to back the NBN's ponderous
roll-out, Telstra, Optus and TransACT will use their lead time to
tweak pricing, charging a premium for their 100Mbps services today
to recover their capital investments — and build up a data-based
infrastructure that's ready to be switched onto the NBN at a word.
Telstra's new T-Box is another extension of this, combining PVR
capabilities with access to Telstra's increasingly data-based
content library over any network capable of carrying it.
Little wonder Conroy is so eager to wrest control of the HFC
network from Telstra: if Telstra plays its cards right, it can
build up a strong 100Mbps following and create the same kind of
inertia that for high-speed broadband that it has long enjoyed on
the copper local loop. This, in turn, will diminish the NBN's
natural market and create new forms of competition for Conroy's
Pricing, marketing and bundling will of course be critical for
the success of these new services. But by living up to its promise
to bring 100Mbps services before year's end, Telstra has scored a
direct hit on the government. The NBN isn't the only way
Australians can get 100Mbps services, the telco giant has proved;
it is now up to the government to match and exceed Telstra's
example. From 1 December, every day the NBN is not operating, is
another tiny win for Telstra.