According to NBN Co's chief Mike Quigley, a completely wireless National Broadband Network would need 80,000 cell towers — 66,000 more than the country currently has.
Tired of the continued debate about whether the NBN could be built entirely from emerging wireless technologies such as LTE (Long Term Evolution), Quigley said that "on a Saturday afternoon for the sheer fun of it" he did the maths on such a project for Australia.
"What if we built this network with wireless?" asked Quigley at the Communications Day Summit in Sydney today.
Quigley assumed a contention ratio of five to one (a measurement that describes the maximum number of users on a given bandwidth), and that NBN Co had the entire digital dividend spectrum, currently in use by Australian TV broadcasters, which will be auctioned off after 2012.
"We calculated how many cells sites that we would need to deliver committed information rates of 5Mbps. With today's broadband penetration of about 60 per cent, you would need about 80,000 cell sites," he said.
Australia currently has 16,000 mobile cell sites, he noted. "So we need to multiply today's wireless network by five to provide a committed information rate of 5Mbps. We're providing 100Mbps committed; no matter how far away you are, you will get 100Mbps," he said.
Showing a graph that outlined increasing demand for bandwidth since the 1980's days of dial-up internet and projected to the next decade where 100Mbps continued the trend, he said: "We're making a bet that these are the way things are going to go. And I think it's a sensible bet."
The problems with wireless technologies, such as LTE — to be trialled by Telstra in May with Huawei, Ericsson and Nokia Siemens Networks — was that they failed to deliver promised peak speeds.
"When we talk about rates in wireless, we talk about peak not committed rates. Peak rates for LTE are 150Mbps. But the minute you have adjacent cells, you get ... interference ... which takes down peak rates by half," he said.
Those speeds were further eroded once more users encumbered the network. "It's no accident that fibre to the premise is happening on a worldwide basis," he said.
Quigley also attempted to clarify controversial comments he made during Senate questioning last week about the National Broadband Network's commercial return, saying they didn't tell the full story about the NBN's profitability.
The NBN Co chief had been reported to have said in response to Senate Estimates Committee questioning that the $43 billion NBN wouldn't make a financial return for 30 years.
Quigley said he wanted to address such "misconceptions", although he noted he had not been misquoted — just that there was more to the story. "The Senate discussion moves along fairly rapidly," he said.
NBN Co's business case, Quigley said, showed three critical aspects to its profitability.
Firstly, he said, NBN Co would generate a positive return on its costs before the end of the construction period of the fibre infrastructure — in other words, it would be EBITDA (earnings before interest, taxation, depreciation and amortisation) positive before the end of construction.
Secondly, Quigley noted that NBN Co was planning to recover yearly capital costs during the construction period — meaning it would be net income-positive after the build was finished.
And lastly, the NBN Co supremo noted the government business enterprise was planning to repay the government's equity contribution to the project — expected to run into the several tens of billions of dollars — within a 20- to 30-year time period.
Quigley said this time frame wasn't unusual and pointed out that other telecommunications players such as US carrier Verizon was rolling out infrastructure with expected return to come along a similar period.
Some of the commentary around the NBN has focused tightly on to what extent the NBN Co will be attractive to commercial investors when the company is eventually privatised. But Quigley also noted the communications minister had stated that the NBN was a project that had other aims than just having a commercial return.