NBN stopped being a sideshow in 2015: Optus

The wholesale broadband market will benefit from the NBN thanks to more ubiquity, simplicity, and a level playing field, Optus has said.
Written by Corinne Reichert, Contributor

The Australian wholesale broadband industry will be revitalised with the emergence of the National Broadband Network (NBN) in the sector, which will bring with it the principles of ubiquity, simplicity, and creating a level playing field, according to Optus Wholesale.

Speaking at the CommsDay Datacentre and Wholesale Summit on Tuesday, John Castro, head of Marketing and Strategy for Optus Wholesale, said the current wholesale market has been "uninspiring" -- or even "dour" and "unattractive" -- for the last five years.

"We've had a stagnant, flat, modest decline in the environment," he complained.

"Optus and all the non-Telstra participants in the market are broadly defined by that language; perhaps Telstra's 1 to 2 percent CAGR [compound annual growth rate] decline over that period just exceeds the decline that the others including Optus are seeing in this space, but it's hardly an inspiring market."

There is almost no innovation in the sector, he said, making it not surprising that there are no new participants. However, he added that hope is being brought by the arrival of the NBN's wholesale offering.

"There is a change agent: It is NBN," Castro said.

"It has always promised to shake things up, it promised that when it was first announced in 2007, it's just taken longer to get here than we all had hoped. That's not a slight on NBN, that's not a political statement, not a reflection on anyone at NBN, our colleagues there on their ability to roll out networks, or what the multi-technology mix may have done to their original rollout plans. It's just a simple realisation that until last year, until 2015, NBN was something of a sideshow."

The NBN was not part of the mainstream discussion until it began permanently outpacing retail and wholesale legacy copper customer access networks last year, Castro added.

"NBN is now, in 2016, unavoidably material to our businesses. It is no longer that triviality, that strategic imperative we should all plan for going forward.

"It is a change towards ubiquity by definition -- most obviously, that's what NBN will bring to the Australian fixed wholesale market.

"It is a change towards simplicity; the days of multiple access networks -- one for your on-net services, one for your off-net services, one for your business services, one for your residential services -- are gone. The NBN will simplify all of our businesses as it moves us all to one access interconnection providing access to the entire nation and subject to any quality of service or SLA that the end user may require.

"It is also, finally, a change towards a level playing field. Those non-contestable revenues I talked about ... will disappear, and the NBN complete will level the economic playing field that the rest of us wholesale participants are subject to. Optus welcomes its arrival."

Optus "thrives" in a wholesale environment, Castro said.

Optus earlier this month announced that its wholesale residential NBN product now offers access to all 121 NBN points of interconnect (POIs), with the telecommunications provider also signing a deal to provide wholesale access to SpinTel's residential broadband customers.

Optus provides Layer 2 wholesale aggregation to the 121 POIs, along with access technologies available from NBN, allowing smaller service providers to provide NBN services across Australia without having to build out their own infrastructure.

"As the NBN surpasses more than 1 million households nationally, partners want access to that market via a single, carrier-grade network without an exhaustive investment outlay," Castro said two weeks ago.

Optus has also deployed a series of customer service improvements to support the wholesale residential product, including investing in back-end automation.

"We know the importance of a great customer experience, and have invested in a range of technology platforms that will improve service connections and the management of faults, which will result in cost efficiencies and customer experience benefits," Castro added.

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