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Silk Telecom slips into powerline broadband

Newly formed telco Silk Telecom is gearing up to commence a trial of broadband over powerline (BPL) technology in Melbourne, working with one of its parents, electricity utility Powercor. Silk Telecom CEOSimon Perkins Silk was created last month from the optical fibre cable assets of Powercor and sibling South Australian utility ETSA.
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Written by Renai LeMay on
Newly formed telco Silk Telecom is gearing up to commence a trial of broadband over powerline (BPL) technology in Melbourne, working with one of its parents, electricity utility Powercor.

      Simon Perkins
Silk Telecom CEO
Simon Perkins
Silk was created last month from the optical fibre cable assets of Powercor and sibling South Australian utility ETSA. Silk is owned 100 percent by Hong Kong business the Cheung Kong Group, which also holds majority stakes in the parent utilities.

Silk's chief executive Simon Perkins told ZDNet Australia the Melbourne trial followed a similar one conducted by ETSA in its home state.

"You've seen Aurora, a power distributor in Tasmania, they're running quite a big trial now on BPL, and I'm part of that working committee," he said. "We've run one already in South Australia, and I'm going to run another one in Victoria."

The BPL trials correspond with Cheung Kong's own moves in Hong Kong.

"Our parent company, Cheung Kong Group/Hong Kong Electric ... they've got 40,000 people using BPL in Hong Kong," said Perkins. "And its commercially viable. So we are copying what they're doing in Hong Kong down here on a trial basis."

Perkins said the Melbourne trial would go ahead after a building developer was identified to assist with some of the work.

The executive harbours no doubts about how solid the fledgling technology is. "It works, already technically we've proved it that it works," he said. "We can get 8Mbps to the home, over the powerline."

Perkins added these were reliable speeds under real-world conditions. "I think you can do much faster than that in ideal conditions," he said, "but I'll give you the real story: It works up to 8Mbps without any issues at all."

But Perkins also admitted BPL was not without its downside.

"At the moment the economics of it are not fantastic," he said. "It's just as well for me to go out and rent ULL [local copper cable] from Telstra."

However, he noted, if the cost of BPL network hardware came down, and Telstra's plans to charge AU$30 a month for access to its copper cables went ahead, "we've got an alternative last mile solution".

Laying cables
Silk has access to the utilities' fibre-optic cable and facilities in Melbourne and Adelaide, as well as some rural areas, but is also looking to expand.

"We're going to do a AU$25 million capital expenditure program this year on fibre," said Perkins, "focusing primarily on the Melbourne CBD and metro, because we've already got the Adelaide CBD and metro pretty well covered."

"We've done some South Australian regional towns: Port Lincoln, Port August, Whyalla, all of those we're doing right now. In Melbourne and western Victoria we're pretty well covered, we've got the big loop that runs out through Geelong, Ballarat, Bendigo and back into Melbourne."

Perkins also flagged an increase in future network sharing deals between utilities, driven through industry forum Utilitel.

"We're already driving forward with commercial agreements with the other Utilitel members," he said. "Basically the only thing that holds me back at the moment is not having national reach. But if I have a correspondent relationship, for example with people like Nexium up in Queensland, I'll provide services in their district on their network and vice versa. And that's happening right now."

Silk has inherited Powercor and ETSA as customers and will also sell bandwidth to Internet service providers like Adam Internet, as well as government, education and healthcare customers.

"We will build fibre to a customers' premises where the economics stack up," said Perkins.

"I'm not going to get into retail, I'll leave that to the Primuses, the ISPs of this world," he added.

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