NBN Co continues to defend 'Rolls-Royce' satellite strategy

While the Coalition has committed to not trashing the AU$1 billion NBN satellite plan, it said that given the choice, it would not have gone ahead with it in the first place. NBN Co has come out to defend its satellite strategy.

Criticisms persist a year after NBN Co decided to procure two multimillion-dollar Ka-band satellites, but the government-funded company continues to defend its decision, claiming that it was vital to its long-term satellite National Broadband Network (NBN) strategy.

In early 2012, NBN Co inked an AU$620 million deal with US communications company Loral for two Ka-band satellites that will be launched in 2015. The idea is to use them to facilitate the NBN's long-term satellite broadband vision, which would provide up to 25Mbps and 5Mbps peak download and upload speeds, respectively , to cover the 7 percent of premises that are unable to get wireless or fixed-line broadband services.

Launching them into space will cost an additional AU$300 million .

In the meantime, NBN Co has set up an interim satellite service to serve remote areas, which will be supplied by Optus and IPStar.

There have been questions as to whether it was necessary for NBN Co to blow almost AU$1 billion on new Ka-band satellites, with Shadow Communications Minister Malcolm Turnbull claiming at the time that it was an unnecessary move , calling it the "Rolls-Royce" approach to providing satellite services to remote regions. He also said there is enough capacity from existing commercial satellite providers.

To this day, the Coalition still considers the Ka-band satellites a bad investment. Shadow Regional Communications Minister Luke Hartsuyker said this morning that the Coalition will not change the current NBN satellite rollout plan if the party comes into power, but not by choice.

"The opportunity to change materially the satellite component has passed," he said. "We are not in the business of changing contracts."

NBN Co satellite program director Matt Dawson defended his company's decision for buying two new satellites. At the Australasia Satellite Forum 2013 in Sydney, he noted that while customers currently in the interim satellite program are happy with the services they are getting, there is simply not enough capacity to support the hundreds of thousands of premises expected to fall under the long-term satellite footprint.

"What we are trying to do is design a network for the future — we are not trying to build a network for yesterday and today," Dawson said. "We are trying to close the digital divide in services and capacity that people in metropolitan areas will enjoy with fibre and fixed wireless, compared with what people in the regional areas have experienced in the past.

"Even though we have made a big step forward in the interim solution, it's not going to close that gap substantially, and that is why we need a long-term solution."

There are also concerns raised about the fact that when the Ka-band satellites are launched in 2015, and interim satellite program customers migrate onto the new long-term service, their existing on-premises equipment will have to be entirely replaced.

However, Dawson clarified that all of the work and cost required to do this have already been factored into the NBN business plan, which was released in 2010.

Dawson said NBN Co is planning to migrate existing interim satellite service customers onto the long-term scheme as quickly as possible once the new Ka-band satellites are up and running.