NBN looking into 1Tbps satellites

NBN is 'closely' watching improvements in satellite technology and capacity, with CEO Bill Morrow pointing towards terabit-per-second satellites being built by others.
Written by Corinne Reichert, Contributor

Australia's National Broadband Network (NBN) is looking into the utilisation of satellites with 1Tbps capacity as consumer demand for bandwidth increases, CEO Bill Morrow has told ZDNet.

Speaking during NBN's first-quarter financial results call, Morrow said NBN has many options for evolving its network, with the company still seeing satellite as its best solution for providing connectivity to those living in regional and rural Australia.

"When we think about those people in the very remote parts of the country, we still do not see other technologies than satellite as the most optimal solution, so we stay on top of the current developments of technology that are satellite related," Morrow told ZDNet.

"For example, we know that there are terabit-per-second-capability satellites that are being built and planned to be deployed in a similar geostationary orbit path as what we have for our satellites, so we try to examine at what point would we think that consumer demand would be necessary to justify deploying those other satellites.

"There's been no decision to go forward, but we watch it closely."

In August, Morrow had told ZDNet that NBN is looking into deploying a third satellite, piggybacking off existing satellites, building out additional fixed-wireless towers in order to relieve congestion, and improving the tech on its existing two satellites.

On Tuesday, he said NBN is focused on overall improvements to customer experience, and is working with retail service providers (RSPs) across solutions for when a consumer is connected; improving their services once connected; and solutions for when a consumer experiences a service fault.

"To support our RSPs and a better experience when end users are getting connected to the network, we are first completing all civil works ahead of declaring a home ready to connect, which will reduce the time between order and install. Second, we're altering the way NBN, the RSP, and our field contractors interface between ourselves and with the end users to better manage home appointments. And third, we are changing the way we case manage the more complex installations and focus on the backlog," Morrow explained during the results call.

"To support our RSPs in a better experience when our end users have already been connected, we are first reviewing our pricing to drive higher speeds with less congestion. Second, we are introducing analytical tools to help NBN and the RSPs isolate causes of speed performance, and third, we are educating end users on how to optimise their home environment.

"And finally, to support our RSPs in delivering a better experience when a service needs repair, we are first introducing new processes and better tools to quicker isolate problems. Second, we are working with our field contractors to be sure they have the adequate tools, training, and resources needed to be able to address the workload. And third, we are improving our service portal performance for the RSPs to gain access to NBN-related information."

Morrow added that it will "take months" to iron out these issues.

NBN had last month responded to the Telecommunications Industry Ombudsman (TIO) annual report revealing that consumer complaints had more than doubled by pointing to its initiatives for improved installation training, advanced fault detection, case management with retailers, and a national awareness campaign on speeds and packages.

It had also added that the TIO's report did not "distinguish between complaints that are the responsibility of NBN to resolve and those that are the responsibility of the retail service provider to resolve".

Speaking on Tuesday, Morrow said that over the last quarter, complaints about NBN to the TIO have already declined by 26 percent in regards to services, and declined by 33 percent for missed appointments.

Morrow's comments follow the Australian Competition and Consumer Commission (ACCC) announcing earlier this month that it will be conducting a public inquiry into NBN's wholesale service standard levels to determine whether regulation is required, after saying in its Communications Sector Market Study: Draft report [PDF] that "immediate measures" are needed to address dissatisfaction.

For the quarter ended September 30, NBN announced a AU$1.4 billion net loss and earnings before interest, tax, depreciation, and amortisaition (EBITDA) of negative AU$778 million.

Revenue was up by 124 percent to AU$405 million, with 520,000 end users added during the quarter for 6.4 million premises ready for service and 6.1 million ready to connect.

Morrow called it "a strong quarter that substantially extends the rollout", with 55 percent of the nation now able to connect. Fibre-to-the-node (FttN) users now exceed fibre-to-the-premises (FttP) users for the first time, something with which Shadow Communications Minister Michelle Rowland took issue.

"Over the past 12 months, 1 million new services have been activated on fibre to the node -- more than all the other NBN technologies put together," Rowland said.

"Yet the flatlining revenue figures show consumers are giving copper a thumbs down."

Despite her statement, NBN clocked revenue growth across all technologies during the quarter, bringing in AU$106 million from FttP, AU$99 million from FttN, AU$19 million from hybrid fibre-coaxial (HFC), and AU$16 million from fixed-wireless.

Average revenue per user (ARPU) stayed stagnant, at AU$43, though CFO Stephen Rue said NBN still anticipates ARPU growth in future.

NBN also made AU$124 million from connectivity virtual circuit (CVC)/network-network interface (NNI) revenue, with Morrow telling ZDNet that NBN will announce the outcome of its CVC discussions with RSPs in December and saying it would be "premature" to discuss it prior to then.

While customers remained mostly on the 25/5Mbps speed tier again, Rue also said that data consumption has continued -- "and, as designed, has been offset by a reduction in CVC unit cost through the dimension-based pricing regime".

On its fixed-line networks, 52 percent are on the 25/5Mbps speed tier; 76 percent of fixed-wireless users are on 25/5Mbps; and 66 percent of satellite users are on 25/5Mbps.

Just 13 percent of fixed-line customers have chosen the 100/40Mbps speed, the same percentage as this time last year.

NBN's capex saw it spend AU$17 million on satellite during the quarter; AU$80 million on fixed-wireless after acquiring 43 wireless sites and integrating 61 base stations; AU$365 million on HFC; AU$78 million on fibre to the curb (FttC); AU$458 million on FttN; AU$127 million on its transit network due to increased data demand and a network increasing in size; and AU$95 million on FttP.

In terms of opex, AU$681 million was spent on subscriber costs during the quarter, which Morrow said primarily relates to migrating customers from Optus and Telstra over to the NBN.

The cost per premises (CPP) for building the network has declined over fixed-wireless and FttP premises, but increased for FttN and HFC, NBN added.

FttP brownfields had a AU$4,397 CPP during the quarter, AU$2,314 CPP for FttP greenfields, AU$2,215 CPP for FttN, AU$2,267 CPP for HFC, and AU$3,549 CPP for fixed-wireless.

NBN has now run out of equity funding after receiving that last AU$2 billion during the quarter, Rue said, and has transitioned to using the government's AU$20 billion loan facility from September onwards.

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