Netflix will charge $8.99 a month for its standard service when it launches across Australia on Tuesday, undercutting rivals Presto and Stan by $1. Neflix’s move to undercut its Australian rivals comes as competition reaches fever pitch in Australia’s streaming market, with a slew of services vying to secure viewers. The company officially announced its Australian pricing structure on Monday morning after details were leaked on Reddit and Imgur on Sunday night. Netflix will offer its single-stream standard definition plan for $8.99 a month, a dollar cheaper than rival Foxtel and Seven Network’s Presto and Fairfax and Nine Entertainment’s Stan, which both offer their entry-level plans at $9.99 a month. The fee will allow users to stream all Netflix content on one device. The three-tier pricing structure also allows users to choose to stream content on two devices for $11.99, or on four devices in ultra-high definition for a $14.99 "family" plan. Meanwhile, Telstra today announced it will offer its T-Box customers a free six-month subscription to Presto. The service will be available unmetered through Telstra’s fixed home broadband, meaning users can watch shows without it affecting their monthly data allowance. Presto’s offering is headlined by US comedy Modern Family, alongside popular TV shows Homeland, Sons of Anarchy, The Newsroom and Girls. Netflix is meanwhile pushing House of Cards and Orange is the New Black, and Stan has Breaking Bad spinoff Better Call Saul as its meal ticket. All three services are also offering 30-day free trials to new members. Telsyte managing director Foad Fadaghi told SmartCompany it will be the battle for content – not pricing – that will make the difference in the streaming wars. “It will be about getting new content and killer programs that entice people to first run with the service and then stay with it,” says Fadaghi. “The biggest challenge will be churn. It will be easy to get trial members and easy to have one [or] two hook shows,” he says, believing users will mix and match content to suit their interests from different providers. “Users might get Better Call Saul on Stan, use Netflix for House of Cards, and have a Foxtel subscription for subscription for sport.” “We think it will be a fragmented marketplace and it will remain that way,” he says. Fadaghi believes Netflix’s pricing will have the biggest impact on Foxtel’s multi-pack premium offerings. “It’s very likely people will look at $25 a month for content [with Foxtel] and put that side by side with $15 with Netflix,” he says. “Foxtel’s premium pricing will face the biggest threat, given consumers now have more choice,” he adds. SmartCompany contacted Netflix and Presto but did not receive a response prior to publication. This story originally appeared on SmartCompany.
Fears Abbott's metadata laws could force small ISPs out of business, as calls for more consultation grow2:39AM | Friday, 6 February
There are growing concerns the federal government’s proposed data retention laws could force smaller internet service providers and telcos out of business, with frustration mounting over inadequate consultation over the issue. Metadata generally describes data about calls, emails, website visits and other electronic messages, such as the time they took place and where they originated, but does not include the content of these messages themselves. Under legislation proposed by the federal government last year, ISPs would be required to store this data for a period of up to two years, with law enforcement agencies given the ability to access this information without a warrant. Director of Smart50 finalist Broadband Solutions, Sam Bashiry, told SmartCompany if the legislation is adopted, the impact on smaller ISPs will be much larger than on telecommunications giants such as Optus, Telstra, Vodafone or iiNet. “The likes of Optus and Telstra have a massive budget for that sort of thing – we don’t,” Bashiry says. “And the last thing we want to see in this country is some of the smaller ISPs going out of business.” Bashiry says the lack of information and consultation with smaller ISPs is his biggest concern with the legislation. “There should be one law for all and there should be more consultation with smaller ISPs, because not all of the information is out there. It’s like the NBN – there are so many changes constantly being made,” Bashiry says. “And how it will affect smaller ISPs will depend on how deep it goes. If it’s just browser history, that’s not really an issue. But if emails also need to be stored, there are costs involved with that. “I read in the paper that under the laws, there is to be no need to keep records for Gmail accounts, but if a customer uses their ISP’s email account, then you’ll need to keep records. Now, that’s a huge loophole and there needs to be one rule for all.” Bashiry’s concerns echo those made by industry lobby group the Communications Alliance in comments to News Corp, as well as by the peak body for Tasmania’s Information Communication Technology sector, TasICT. TasICT executive director Dean Winter told SmartCompany small ISPs are anxious about what the new laws will mean for them. “TasICT is very concerned that these proposed laws have been poorly communicated and not well understood,” Winter says. “Any new requirement for data retention will have a proportionally higher impact on small ISPs. They would be likely to spend considerably more time and resources in attempting to understand the regulation and then implement and maintain the systems required to comply.” “The process needs to be delayed so that government and industry can clarify which organisations will actually be covered by the scheme.” SmartCompany contacted the Department of Communications and Communications Minister Malcolm Turnbull this morning but did not receive a response prior to publication. However, in a speech to Parliament late last year, Minister Turnbull defended the proposed legislation, pointing out that historically phone companies held records detailing the time, duration, and A and B parties of phone calls. “Access to metadata plays a central role in almost every counter-terrorism, counterespionage, cybersecurity and organised crime investigation,” Turnbull said. “It is also used in almost all serious criminal investigations, including investigations into murder, serious sexual assaults, drug trafficking and kidnapping. The use of this kind of metadata, therefore, is not new. However, as the business models of service providers are changing with technology, they are keeping fewer records.” “In June 2013, the Parliamentary Joint Committee on Intelligence and Security concluded that this diminution in the retention of metadata is harming law enforcement and national security capabilities, and that these changes are accelerating.” Image credit: Flickr/gabitogol This article orignally appeared on SmartCompany. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Earlier this year, I attended a dinner for about 150 people. The first thing we all did was head for the bar to grab a drink, swamping the staff and setting back the dinner schedule by nearly two hours. We learned that it is better to place a bottle of cheap wine and a jug of lemon squash on each table just to manage the crowd. The same lesson is now being applied to the NBN. Last Sunday saw the long-awaited signing of two deals and new rules which will, hopefully, pave the way for the National Broadband Network under the current government’s Multi-Technology-Mix model. It’s a positive development for getting more people reasonably happy sooner, but there are significant long-term challenges ahead. The Carrier Licence Conditions (Networks supplying Superfast Carriage Services to Residential Customers) Declaration 2014 is intended to manage so-called cherry-picking of profitable residential customers of fast broadband. The previous model under the Labor government discouraged anyone other than NBN Co from rolling out the local access network. In part this was to break the vertical integration stranglehold Telstra has over both retail and wholesale provision of access through its legacy plain old copper network; it was also to ensure NBN Co would not be undermined by competition. However, a loophole in the regulations was identified by TPG, allowing it to reach up to 5% of the NBN footprint as a retail provider of Fibre-to-the-Basement through its own network. The new regulations recognise the advantages of other parties choosing to roll out their own networks, but require that such networks be available on a wholesale basis to other retailers - which is to say there is a requirement to structurally separate wholesale and retail operations on NBN-equivalent services. The regulations only apply to new networks rolled out after 1 January 2015. Services already in use, such as iiNet’s TransACT fibre-to-the-node network are excluded. The wording has clearly been carefully sculpted to capture TPG’s plans. Deals with both Optus and Telstra were also signed. Both companies have agreed to progressively hand over ownership of their relevant infrastructure, Telstra’s copper access network and the HFC cable networks of both, to NBN Co. Previously, the arrangement was that these networks would be decommissioned, but they are now critical implementation options for the NBN. Agreements are consistent with maintaining the valuations of the previous arrangements so that shareholders are no worse off. Mention has also been made of actively tapping Telstra’s experience and capabilities in the NBN rollout. There is some sensitivity around this statement from the Department of Communications, after Telstra was effectively excluded from tendering to build the NBN in 2008. There would appear to be a significant mending of relations. But there are troublesome times ahead. The original Fibre-to-the-Premises-dominated NBN was big on vision but caused an overnight drop in investment in moderate-speed broadband technologies such as ADSL. This meant customers were stuck with 2008-vintage speeds while NBN Co geared up for planning and deployment. The political fix negotiated by independents Tony Windsor and Rob Oakeshott in 2010, which shifted priorities to rural areas, provided some longer term certainty for infrastructure investment in profitable urban areas, but further delayed urban rollout. The new policy settings encourage infrastructure competition on the basis of structural separation, once again providing opportunities for parties other than NBN Co to compete in the wholesale space. However, the new NBN model is focused on initial speeds of 25MBit/s up to 50MBit/s in the short term, but with no mention of Committed Information Rate or specifics of upload speeds. This myopic vision fails to recognise that the NBN is not just about “more of the same, but faster”. It is entirely about enabling fundamentally new services to domestic households, both for entertainment and for productive work-at-home. What we’re left with The emerging NBN is barely capable of delivering a couple of high-definition video streams in real time, yet this is common in a modern family household with independent internet-enabled devices. If you want to download a one-hour standard definition video, it will take about five minutes. However, if you want to produce and upload such video content, it will take three hours. Upload figures for high definition and the emerging ultra-high definition video are about fifteen and thirty hours, respectively. Cloud-based services will continue to stumble as long as policy direction fails to recognise the importance of delivery of data into the network. The much deeper issue is what happens after 2016. I’ve argued previously that “[o]ptical fibre is the only known viable technology beyond 2025. The only justification for considering anything else in the meantime is to buy us time”. A Fibre-to-the-Node deployment will at least provide the option of upgrading to a passive optical link to the premises of customers who want it, and some of us just can’t wait. But there is no guarantee that every other technology deployment has a similar evolution option. It would be wise for competing infrastructure providers to think this through, but there is no guarantee that solutions deployed in the next few years will evolve, efficiently, to the robust projected demands beyond 2025. So is this good news? Actually, yes. The NBN capital expenditure won’t be any cheaper if we consider a realistic 20-30 year timeframe, but that doesn’t matter if the faster deployment of the interim Multi-Technology-Mix generates revenues and productivity gains sooner, offsetting peak funding. The interim solutions won’t deliver a clean evolutionary pathway, but that doesn’t matter if enough customers are sufficiently satisfied in the short term. The long-term fibre-to-the-premises deployment can be managed more calmly, if less efficiently, over a longer time frame. The line at the bar is still too long. Pass me the bottle, please. This article originally appeared at The Conversation.
Prominent investor and entrepreneur Simon Hackett has transformed a historic Adelaide mansion called Wavertree, once home to a colourful two-time South Australian premier and a TV studio, into a co-working, incubator and events space called Base64. Hackett told StartupSmart he has deliberately delayed any hard-and-fast decisions about whether to turn Base64 into a startup incubator or accelerator program. “It seems clear, however, that we aren't going to be 'traditional'. There are existing hub/accelerator spaces in Adelaide and we're not intending to compete with them – and indeed we'd welcome their use of our event/seminar/gathering spaces to augment their own activities,” he says. “The spaces for resident companies are going to be filled very carefully – because we're consciously wanting to build a community of people who are comfortable with each other’s company in a human sense, not just in a business one.” Hackett hopes Base64 will become the physical home for some of the Hackett Group’s investments, but notes most of its current venture investments have been in companies that are already headquartered in other states. Some of his recent investments include BlueChilli, graphite miner Oakdale, battery storage firm RedFlow, electric vehicle venture EV Race Systems, cloud-based ecommerce firm UltraServe and aviation software developer AvSoft. He also recently joined a group of investors who are injecting $5 million in capital into geospatial mapping firm Spookfish. “The original Wavertree mansion is now the Hackett Group headquarters, and a small team working for me are based in that building. We are in the process of 'booting up' the multi-tenant space at present, with a few companies already present as 'beta test' residents of the space. We expect to formally launch the site in early-mid 2015,” he says. “We have significant investments with (and in) BlueChilli, who are based in Sydney, and whose '156' accelerator program is an extremely effective way to create Internet-facing MVP's from great ideas, sourced from generally non-technical founders. If BlueChilli winds up accelerating startups that are based in SA in the future, then there is some obvious rationale to having Base64 provide the physical accommodation for those SA based startups.” Over the past two years, the 1865 heritage-listed mansion, which Hackett purchased in June 2012, has been re-pointed and re-roofed, with gigabit-rate internet access cabling has been installed throughout the facility. “Our major redesign and renovation of the site has taken more than two years to complete. It has transformed the space from an old building need of some love and attention into a well-integrated and modern reinvention of some wonderful old buildings,” Hackett says. “There are now excellent event and seminar spaces, multiple indoor/outdoor garden spaces, a variety of offices of various sizes, and excellent facilities throughout. The space is designed to inspire creativity. It raises the spirits of everyone who visits.” Hackett says Base64 helping the South Australian tech community to achieve critical mass would “be lovely”, but it isn’t the primary aim of the exercise. “It seems as if people in most major cities would like their city to become the next Silicon Valley/Alley/Beach/Desert/Winery! It seems to need enough people in absolute terms in an area (for critical mass to form), combined with government incentives (or at least, the lack of government barriers) to such activity, combined with good broadband and great coffee. And a bit of luck,” he says. “None of that stops fabulous things happening in South Australia in this space - and ultimately it seems to me that the notion of geographically specific 'tech hubs' is being gradually usurped by the virtualisation of tech communities (in some cases at least) - allowing them to exist across geographies and to achieve a different form of critical mass in that manner instead.” Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Mobile messaging apps such as Whatsapp are killing traditional text messages while multi-screening is going mainstream, according to an Australian Communications and Media Authority. The ACMA paper, titled Six emerging trends in media and communications, attempts to identify disruptive media and communications trends that “strain the effectiveness and efficiency of existing regulatory settings”. Here are the six media and communications trends identified in the report: 1. Communications go over the top Consumers are increasingly rejecting carrier-based phone calls and text messages in favour of apps and online services such as Apple iMessage, Facebook Messenger, Google Hangouts, Snapchat and Microsoft’s Skype. According to the report, revenues from fixed line phone services have collapsed by 34% in five years, from $18.296 billion in 2008 to just $12.045 billion in 2013. Over the same time frame, the number of voice over internet protocol (VOIP) users has surged from 2.1 million to 4.6 million. However, this extra data users has been good news to mobile phone carriers, which have seen their revenues surge from $15.967 billion to $20.014 billion. 2. Consumers build their own links It’s not just the number of communications apps that is booming. Australian consumers are using them with a wider variety of devices, which are connected over a growing number of network technologies. Consumers now regularly switch between fixed-line internet connections, Wi-Fi, mobile broadband and – especially in remote areas – satellite connections, depending on the time of day. The number of devices they use is also increasing, with the number of Australians owning a tablet, laptop and smartphone increasing from 28% in 2013 to 53% in 2014. 3. Wearables are set to boom On top of smartphones, tablets and laptops, the report predicts wearables (including Google Glass, smartwatches and fitness trackers) are set to become increasingly common over the coming years. The report suggests the number of wearables worldwide will grow from 22 million in 2013 to 177 million in 2018. It also predicts that an increase in the number of devices running Google’s Android Wear platform, along with the release of the Apple Watch early next year, will lead this trend to accelerate. 4. Online content is going mainstream The internet is not just disrupting the way we communicate. According to the report, consumers are increasingly viewing a greater number of TV services (including pay TV, broadcast TV, streaming TV and catch-up TV) delivered to a growing number of devices, over a growing number of network technologies. In a typical week, 97% of Australians watch a free-to-air or pay TV service. By contrast, one-in-two Australians have watched online TV over the past six months. This includes professionally produced catch-up or streaming TV services, pirated movies and content from video sites such as YouTube. Meanwhile, people aged between 16 and 24 now watch more TV over the internet than they do from broadcast television services. 5. Multistreaming is now mainstream In many cases, new forms are television are complementing, rather than replacing older ones. The report shows 74% of Australians with internet access regularly watched TV and used the internet at the same time, up 25 percentage points from 2009. It is as high as 89% for people aged 25 to 34. Overall, 71% of people still prefer to watch TV shows and movies on television, compared to on mobile phones (5%), tablets (4%) and computers (29%). Meanwhile, user-generated content is mostly watched on computers (71%) or mobile phones (41%), rather than tablets (17%) and televisions (10%). 6. TV is still the one for news Finally, when it comes to getting the news, the more things change, the more they stay the same. The report shows that 92% of free-to-air or subscription television viewers watched a news or current affairs programs on television in 2014. While newspaper circulation has dived 18% between 2009 and 2013, the drop has been a drop of just 10% from TV over the same time. Image credit: Flickr/alvy Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The world was a very different place in December 1999 when the first G20 met in Berlin. Steve Jobs had just taken back the reins at Apple, but Facebook, Google, Twitter and the dot-com bust were figments of imagination. When government and central banking leaders meet in Brisbane this week, they will have a very different set of concerns, as well as a different set of levers to achieve the goal of “stable and sustainable world growth that benefits all". The path of least resistance is to make small adjustments in an effort to re-balance and re-ignite growth. Instead, they should be considering how to stimulate and harness the power of digital disruption to create companies that can grow fast and create jobs we can not even imagine. The continued growth of the start-up culture and the “overnight” success of new businesses such as Uber, AirBnb and Dropbox demonstrate the economies of tomorrow are being shaped by companies which have became global players overnight. Rather than focusing on a few adjustments to re-stabilise the world’s economy, the G20 leaders need to understand the impact of digital disruptions on nations and industries. All will be impacted; none will be spared. Deloitte Digital’s latest report, “Harnessing the bang”, identifies some of the impacts of this “digital disruption” to existing companies. It notes that 13 industries comprising 65% of the Australian economy are facing significant disruption by 2017. Google, for example, has revolutionised advertising, Amazon has re-invented the book publishing industry, streaming services like Netflix have changed the movie and entertainment sector, and internet banking has changed financial services. It’s clear this is a worldwide phenomenon, not just one facing Australia. Digital disruption belongs on the G20 agenda. Threat or opportunity? As ancient Chinese wisdom says, every threat contains the seeds of opportunity. The democratisation of markets brought about by the rise of technology represents boundless opportunities for companies that are innovative. Henry Ford heard people say they wanted to travel faster, but instead of breeding a faster horse, he used new technology to create a motorised vehicle – and a manufacturing industry no one had imagined. Automobiles disrupted traditional modes of transportation and required workers to have new manufacturing skills. New companies were born and new hard infrastructure required: roads, bridges. The same is happening with digital technology. The digital products and services require new skills, will generate new companies and need a different kind of infrastructure to support them (broadband internet, global paths to market, venture funding etc.) Australia has some great start-up success stories: Atlassian provides software to the software makers all over the world, and Canva is reaching 1,000,000 customers. Both are carving a global path to success in their particular industries. The G20 Global Café in Brisbane will showcase several more companies that are digital disruptors of traditional industries, are already going global and have the potential to grow big. Some are concerned that tech companies don’t create jobs – they underestimate the impact that tech start-ups have on wealth and job creation. The IPOs of Google, Facebook and Twitter together created nearly 4,000 millionaires. As for job growth, high-tech companies create a disproportionate share of high-value jobs. Between 2002 and 2008, for example, 6% of UK businesses with the highest growth rates created 50% of the new jobs. Professor Enrico Moretti, an economics professor at UC Berkeley, notes that for every job a tech company creates, five new jobs are created in other sectors – a multiplier effect three times higher than for extractive or traditional manufacturing industries. The focus should be start up, then grow up So it’s pretty simple: entrepreneurs whose businesses use digital technology to develop or deliver products and services that customers need and want will grow the fastest, create the most jobs and have the highest probability of success. This in turn has numerous economic benefits for countries that encourage and foster an entrepreneurial mindset and a high-tech-friendly environment. Smart governments that have already figured this out are beginning to provide resources and support their start-up ecosystems. From science, technology, engineering and maths (STEM) and entrepreneurial education, through to direct government funding at the venture capital stage, they are placing a premium on developing more high-growth technology companies, teaching CEOs how to start and grow companies, and removing the barriers to growth. So what does Australia, in particular, need to do to create the environment in which our digital disruptors can quickly become high-growth, global players? It’s pretty simple: Encourage more people to start companies and make jobs, not just take a job. Teach people the entrepreneurial mindset and support those who see opportunities and want to start and grow companies. Provide more funding for research and education, especially in science, technology, engineering and maths (STEM). Revamp systems that support the commercialisation of research with the goal of developing more technology companies. Support the development of an ecosystem that provides entrepreneurs with what they need to grow companies: access to knowledge, talent, money and space. Have a workforce ready and able to work in companies that make widespread use of technology. Help existing businesses adapt to the world of digital disruption. The Australian government is beginning to understand that the future must include high-growth technology companies, as well as mining, gas and agriculture. It is beginning to engage with bodies such as StartupAUS (of which I am a board member). We are hopeful that the Department of Industry’s Entrepreneurs Infrastructure Program and additional programs will spur the development of more venture capital and more disruptive technology companies in Australia. The G20 countries need to understand the power of digital disruption and develop economic and financial policies that actually capitalise on that disruption. Creative destruction of old industries is the norm; the internet is an accelerant to the pace of disruption. Innovation, digital disruption and entrepreneurship are not passing fads – they are the solution to the economic problems we are experiencing. Countries that understand this and develop polices and programs to support it will benefit the whole world. This article originally appeared on The Conversation. Photo: Peter Dasilva/EPA/AAP Follow StartupSmart on Facebook, Twitter, and LinkedIn.
Telstra’s plans to rollout Australia’s largest Wi-Fi network over the next five years involves asking existing customers to allow part of their broadband connection to be used as hotspots. More than two million new hotspots are planned as part of the A$100 million-plus strategy to increase broadband connectivity in the places that Australians live, work and visit daily. The first 1,000-hotspots will go live before Christmas. But only two years ago Telstra shelved its plan to build a 1,000 hotspot Wi-Fi network, citing a lack of profitability and a clear customer preference for 3G connectivity. So what has changed? In contrast to the fixed line National Broadband Network (NBN) quagmire, the shifting position of Telstra with regards to Wi-Fi reflects a rapidly evolving wireless telecommunications market. The continued uptake of smart phones, tablets and other mobile devices, and the increasingly central role these devices play in social, economic and political life, is generating a phenomenal demand for wireless data. This is outpacing the development of cellular network capacity and creating congestion and reduced service quality on these networks. Telstra’s interest in developing a Wi-Fi network to offload some of this data traffic mirrors that by its international counterparts. The fundamental role that wireless communications now play in contemporary life has also translated into government interest in the provision of public Wi-Fi as civic infrastructure. Governments are well placed to do so since they control assets, such as light poles, on which the large number of low-range Wi-Fi access points can be mounted. While Telstra will make use of some of its own assets, such as public pay phone booths, it is seeking to establish hotspots in partnership with governments. This will spread the cost of provision, but Telstra are also undoubtedly keen to maintain some control over public Wi-Fi developments to make sure it reduces cellular congestion without cutting into its existing revenue streams. Telstra has also developed a business model that it believes will make sure Wi-Fi becomes a profitable revenue stream. Use of Wi-Fi hotspots by Telstra’s contracted home and business broadband customers will count towards their already monetised bandwidth allowance. Those without Telstra home broadband services will pay a fee to access the hotspots, the pricepoint of which will likely be structured to facilitate casual use but encourage regular users to consider signing up to Telstra broadband. Compelling as these reasons may be for Telstra to dip back into Wi-Fi provision, shareholders might be forgiven for worrying that the rollout of two million hotspots is an overcommitment, and one that will present similar headaches to those faced by NBN Co. But they should fear not, as Telstra will build just 8,000 of these hotspots, with the majority actually rolled out by Telstra’s customers themselves. A Fon on your Wi-Fi network A fascinating aspect of Telstra’s plan is its partnership with the European-based bandwidth sharing enterprise Fon. Telstra hopes that two million of its customers will follow the lead of Fon users around the globe and make part of the bandwidth they purchase for their home or business broadband service available to other users. So what is Fon, and are Telstra’s plans feasible? Fon was established in 2005 by Argentinian entrepreneur Martin Varsavsky. The company is headquartered in Spain, a country with a significant history of community wireless activism, such as guifi.net. Despite affectionate references to its community of “foneros”, Fon has moved some way from its cooperative roots. Backed by some heavyweight venture capitalists, Fon broke even after four years of operation. The company has been signing exclusive deals with foreign telcos like Telstra as a means of rapidly expanding its international hotspot network. The company now claims to have more than 13 million Fon spots worldwide. These will be available to Telstra customers through the deal. Fon’s bandwidth-sharing scheme is not unique, but its scale and ambition sets it apart. Commentators have been intrigued by the company’s evolving blend of user-generated and commercial elements. But its service model – which concentrates provision in private homes and residential areas – has been criticised for its variable accessibility and reliability. This concern would seem to be amplified in the large spaces of Australian cities. How many of the projected two million hotspots will be in low density neighbourhoods where Wi-Fi signals may not extend much beyond the front gate, or where there is little passing foot traffic? Will lingering outside houses to utilise the network boost commitment to the sharing economy, or arouse suspicion? Such suspicion will hardly be allayed by Fon’s unfortunate description of non-sharing network users as “aliens”. Telstra, then, will be tasked with boosting provision in commercial and tourist areas, and identifying incentives for householders to sign up and share. Who benefits from the deal? Specifically, it enables Telstra to secure a new footing in Australia’s rapidly evolving Wi-Fi scene. By asking Telstra’s customers to purchase and maintain a key component of the network infrastructure – the signal splitting modem – Telstra outsources infrastructure investment. More speculatively, the new network may generate revenue from casual users and remove data traffic from mobile networks in favour of premium voice services. Fon is aiming to build its global community but its business is currently concentrated in Europe, North-east Asia and South America. An alliance with Telstra brings Fon into the Asia-Pacific region. Partnering with major telcos may also help counter criticism of Fon’s reliability. The new hotspot network will provide a new platform for Telstra customers to access bandwidth from their home broadband plan and, depending on pricing and performance, may provide cost effective internet access for non-customers. More generally, roll-out of the network is likely to expand commercial Wi-Fi coverage in Australian cities, and may promote innovation and further technical development. Ian McShane receives funding from the Australian Research Council. Chris K Wilson and Mark A Gregory do not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article. They also have no relevant affiliations. This article was originally published on The Conversation. Read the original article.
In a report that is due to be released next month, the OECD has drawn a picture of the state of the world’s digital economy, or at least that of its member countries. The reported data paint a picture of our modern digital life, with growing numbers of people accessing the internet via high speed broadband or wireless on their mobiles, enabling them to take part in social networks and online shopping. The digital citizen Overall, the number of adults in the OECD countries that use the internet increased from 60% in 2005 to 80% in 2013. The gap between young and old varies according to country but in the most advanced economies, up to 95% of young people are now internet users. 70% of them also access the internet at school. Buying products and services online has now become the norm, with 50% of users doing so, and an increasing proportion of that is now via a mobile device. E-Government services were used on average by 35% of individuals and about 80% of businesses. E-Government is defined as people accessing information and submitting completed forms, including tax returns. A particularly interesting set of data showed the degree to which users in a particular country would watch YouTube content from that country. This was highest in Japan where 75% of YouTube views were of Japanese videos, through to the USA where 33% of content viewed was of US origin and Australia where only 8% of views was of Australian content. Unfortunately the data doesn’t tell us where the majority of content Australians watched came from but one can only assume that it was from countries like the US and UK. It seems that being a digital native starts young in most OECD countries. The age of first access to the internet in 2012 ranged from 33% being under 6 in Denmark to the majority of Russians being over 10 years old. Australia, as with many things digital, was somewhere in the middle with the majority of kids being under 9 when they first accessed the internet. The not-so-digital citizen Not all is quite as switched on as it would appear however. In the EU, over 60% of the labour force reported that they had insufficient computer skills they considered necessary to apply for a new job. This included just under 40% of people with a university education. Again in the EU, 30% of internet users cited concerns about security as the reason they wouldn’t buy anything online. Computer use at work also varied dramatically across OECD countries with countries like Russia and Italy reporting over 50% of workers not using a computer at work. This figure was around 26% in the US and as low as 17% in Norway. Digital companies Companies have been slower than individuals to adopt digital ways but they have recently been speeding up. According to the OECD, “It took 15 to 20 years for slightly more than three quarters of enterprises to develop a website, but only a few years for around 30% of businesses to become active on social networks”. In the OECD countries, 94% of businesses have access to broadband, 75% had a website, but only 20% conducted any sales online. The standout country here was New Zealand where 80% of companies purchased goods online and 45% of companies sold goods online. The use of enterprise resource planning tools was lowest in the UK where only 10% of companies used this type of software. Wired (and wireless) countries A key enabler for a digital economy and digital citizens is access to broadband. The main driver here has been access to wireless broadband, principally enabled through the mobile phone. Almost 75% of OECD citizens now have a mobile wireless broadband subscription. In Australia, there has been a radical increase in subscriptions since 2009 where the figure was less than 20%, to now where there are more subscriptions than inhabitants. Australia now has the second highest wireless broadband usage of all OECD countries. Fixed, or wired, broadband subscriptions in OECD countries tell a different story. Korea leads the world with over 70% of fixed broadband subscribers having speeds above 10 Mbps. The USA is over 30% but Australia is down near the bottom of the list at 10%. The Digital Economy The impact of information and communication technologies (ICT) on the economy is huge. ICT companies spend more on the research and development than the rest of the economy and across the OECD productivity in IT companies is about 60% higher than the rest. Other analyses have estimated that the impact of wireless broaband on the Australian economy has been around $34 billion a year. As countries continue to look for ways of boosting their economies, investing in productivity and innovation through information technologies seems the most feasible way of achieving this. This is especially true for countries like Australia where the reliance on mining is not sustainable. This article was originally published at The Conversation. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
The ease of buying shoes or managing our banking over a mobile phone connected to the internet has changed our expectations regarding accessible services. But not everyone is connected to the internet in Australia so how do we make sure any growth is equalled by ability to use and navigate services online? Australian governments are attempting to deliver more of their services using mobile apps or over internet platforms such as myGov. The federal government’s ICT Sustainability Plan argues for the promotion of Government 2.0 listing the obvious benefits such as reducing costs and improving the convenience and speed of solving problems. Yet lingering inequalities of access have made the shift to online service provision less effective. The term digital divide describes a form of inequality derived from diminished access to technological services, such as internet access. While basic access to the internet has improved in Australia, other divisions have become crucial: in speed, hardware and know-how. Educating people to use the internet to access services, and making this easy, should be the next step for government agencies attempting to push their services online. So who is and who isn’t online? Research by the Australian Communications Media Authority says internet usage is growing in both regional and urban areas. Most growth is driven by the use of internet enabled mobile phone handsets. During the period December 2009 to December 2013, the proportion of the population using the internet via their mobile phone increased from 12% to 49% in major capital cities, and from 5% to 32% in non-urban areas. Beyond the use of smartphones, the gap is closing slowly. There is a 12-percentage point difference between urban (84%) and rural (72%) Australians with a home broadband internet connection. The Australian Bureau of Statistics’s report on Household Use of Information Technology also highlighted divisions in use and access based on age and socioeconomic background. In 2012–13 it found only 46% of older people were internet users and only 44% of this age group had accessed the internet from home in the previous 12 months. Meanwhile the ABS report says 98% of households with household income of $120,000 or more had internet access, compared to 57% of households with household income of less than $40,000. Limited access in indigenous communities Rates of access in remote indigenous communities are particularly low. A joint study by Swinburne University and the Central Land Council looked at home internet use in three remote indigenous communities – at Kwale Kwale, Imangara and Mungalawurru in the Northern Territory. Only 10% of total adult participants owned their own computer, and only 10% of those were connected to the internet at home. Even people with access to a computer could not always get a satellite connection and some run off generators rather than the electrical grid. Australia is trying to solve the problem of the digital divide with the development of the National Broadband Network (NBN). This will provide high speed broadband access to all Australians through a combination of fixed, mobile and satellite networks. While the Liberal/National coalition government elected in 2013 has reformed the NBN project to provide lower speed connections, they should consider prioritising museums, schools, libraries and community centres with high speed access. These could provide education and training to members of their communities with a reliable internet connection and functional hardware. The role of high-speed connected schools Schools have a particularly important role to play in educating young people and servicing communities in rural areas. Skills training in computer literacy and navigation skills are essential to improve accessibility and use of online services. Therefore schools should be considered as both access points and training centres, and prioritised. The Human Rights and Equal Opportunity Commission’s report on rural education made it clear that the cost and reliability of internet access must be improved if schools are to play a strong role in closing the digital divide. Some examples of good inclusiveness policies were listed by the Economist Intelligence Unit in its 2012 Best Practice from Around the World report. It commended the work of Telstra in narrowing the digital divide. Three of the telco’s projects for managing this change include: The Access for Everyone program reportedly trained more than 62,000 people in how to access the internet. It targeted low income households, people with disabilities, the elderly and people living in rural areas. Connected Seniors gets high school students teaching older Australians on how to use smartphones and tablets through group workshops. Indigenous Digital X in collaboration with the Telstra Foundation has established the National Centre of Indigenous Excellence to strengthen indigenous participation and entrepreneurship in the digital economy. Many countries confront divides between their rural and urban population in internet access, yet Australia, with one of the lowest population densities in the world, is particularly challenged by its own geography. So until universal accessibility is guaranteed, any money government agencies and public service providers save as services shift online should be invested into quality internet access, skills training and other inclusiveness strategies. These strategies are key to ensuring existing inequalities are not reinforced by shifting to online delivery of services. Philippa Nicole Barr does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations. This article was originally published on The Conversation. Read the original article.
A cost-benefit study of the NBN commissioned by the government has estimated the Coalition’s multi-technology model will deliver $16 billion more than Labor’s model in net economic and social benefits to Australians. The study, by an independent panel headed by Michael Vertigan, has put at more than $40 billion the gross benefits between 2015-40 from increasing broadband speeds to 25 megabits per second or more. It modelled four scenarios – no further rollout; an unsubsidised rollout; multi-technology mix (the government’s plan), and fibre to the premise (which was Labor’s plan). The government’s plan has net benefits of about $18 billion in current dollars, compared with no further rollout, it says. This includes the cost of providing high speed broadband in uncommercial urban fringe areas, rural and remote areas via fixed wireless and satellite. In these areas costs substantially exceed benefits. The scheme that was being pursued by Labor, including the subsidised areas, has net benefits of about $2 billion, according to the study. The $16 billion gap is because fibre to the premises costs more and takes longer to deliver. A purely commercial rollout would produce even higher net benefits, but this would mean Australians in non-commercial areas would miss out on access to high speed broadband. Drawing on research it commissioned, the study says: “Users of broadband would prefer an increase to their current speeds quickly, rather than to wait longer to gain a higher level of speed. This means consumers place a greater value on the early deployment of high speeds rather than on the slower deployment of very high speeds using FTTP”. The research found bandwidth demand and takeup of plans with higher data rates are likely to grow far more slowly than assumed in the planning of Labor’s NBN. It confirmed that willingness to pay for more bandwidth declines rapidly as bandwidth available to consumers increases. Most of the benefits from higher speed accrue to private users in households and businesses. Public or external benefits – that is, outside households and businesses, such as in health and education – are a very small proportion. Communications Minister Malcolm Turnbull said the cost-benefit analysis “strongly supports the switch from FTTP to a multi-technology NBN” which had been recommended by NBN Co’s Strategic Review in December last year and approved by the government in April. Turnbull said the analysis “indicates a multi-technology NBN is the most future-proof strategy for delivering a universal access to superfast broadband, because it preserves the option of upgrading to FTTP at a later date if this is justified by consumer demand. “In contrast the FTTP locks in high and irreversible costs, reducing optionality and exposing consumers and taxpayers to more risk.” Opposition spokesman Jason Clare said Turnbull had broken a promise to have Infrastructure Australia to do the cost benefit analysis, and instead he had “hand-picked former staff and some of the most vociferous critics of the NBN”. Clare said this cost benefit analysis “is not independent. It is also flawed. The cost to taxpayers of Labor’s NBN and the Coalition’s second rate NBN is very similar. However the difference in benefits is significant,” he said. “Under Labor they would have the real NBN, fibre to the premises, a game-changing project that would change the way we live and change the way we work. Under this government, only 24 per cent of Australia will get fibre to the premises. The rest of Australia will miss out. They will get a second-rate NBN.”
In his independent audit of the public policy process behind the national broadband network, former Telstra director Bill Scales suggests there was never an internal debate about different technology options for the NBN. He also argues the panel of experts (of which I was a member) assisting the Rudd government did not properly test advice from the Australian Competition and Consumer Commission (ACCC) about the upgradeability of a Fibre-to-the-Node (FTTN) network to a Fibre-to-the-Premises (FTTP) network, and that the panel inappropriately relied heavily on this advice in making recommendations to the government about the development of the NBN. In my view, all of these assertions are incorrect, and this taints the credibility of the audit. In reality, the panel spent many hours discussing and analysing the technology options and the upgrade paths, including those set out in the various proposals submitted by companies in response to the government’s Request for Proposals (RFP). The panel also independently evaluated other models for upgrades. The panel, which included telecommunications experts from both industry and academia, carefully scrutinised all advice it received, and drew heavily on its combined experience. Some advice was very helpful and some was considered to be of little value. When the ACCC tabled its advice regarding the costs of upgrading FTTN to FTTP, it came as no surprise to the expert panel that the ACCC had a view that was similar to what the panel had already concluded. Simply put the panel did not rely heavily on the ACCC advice. A fundamental flaw with the audit process was that Scales, by his own admission, did not have access to key information, with limited access to documents associated with the panel of experts’ activities. Members of the panel, constrained by strict confidentiality rules, were also unable to share any further information with Scales about the details of panel discussions and deliberations. Without divulging any details, I was able to explain the situation regarding the ACCC to Bill Scales when he interviewed me for his report, but it seems he did not put much weight on my comments. Scales seems to have missed the point that upgradeability was an important issue from the outset of the RFP process. The RFP for NBN Mark I included many requests for information from proponents about how they proposed to future-poof their networks by providing upgrade paths from FTTN to FTTP. It even suggested a 2020 time frame for this upgrade. The consideration of upgradeability and its costs was one of a number of factors that fed into the “value for money” criterion for evaluating the proposals. In one part of his report, Scales suggests the ACCC ignored a key report by Analysys Mason, which shows that the cost of FTTP is around five times the cost of FTTN. But a little bit of information can be dangerous. What Scales seems to have missed here is that the Analysys Mason report was based on the British broadband landscape, and assumed that the copper network required for a FTTN rollout was already owned by the operator rolling out the network. When parts of the copper network and/or the associated ducts might need to be purchased or leased, as required for Australia’s NBN, the calculus changes completely. Story continues on page 2. Please click below. The Coalition’s NBN is proving expensive Under the previous Labor government, NBN Co negotiated a deal with Telstra to provide access to Telstra’s ducts and pits, enabling fibre to be laid with fewer trenches needing to be dug. The cost to NBN Co of this access was A$11 billion, and added a hefty overhead to the total cost of the NBN. Even if we make the optimistic assumption that NBN Co will not have to pay any more than this $11 billion to access and maintain Telstra’s copper wires inside those ducts, the Coalition’s (predominantly FTTN) NBN will suffer the same $11 billion overhead. Consequently, the factor of five difference between the cost of FTTP and FTTN given in the Analysys Mason report drops to something around two or three. By world standards, the Coalition’s NBN is turning out to be very expensive. What has Australia lost in the transition from Labor’s FTTP NBN to the Coalition’s multi-technology mix, with a large proportion of FTTP? In my view, a big danger is that future upgrades from FTTN to FTTP will be slow and that Australia will continue to lag behind the rest of the developed world in terms of broadband access. With such a huge investment sunk in the Coalition’s multi-technology mix NBN, there is going to be very little appetite in government to fund future expensive upgrades to FTTP. If the government sells the NBN to a commercial monopoly operator, there could be even less incentive for upgrades to FTTP. There is a real danger that Australia will remain trapped in a broadband backwater. Rod Tucker receives funding from the ARC and has received funding and in-kind support from a number of telecommunications companies. He served on the Rudd Governent's Panel of Experts that assisted with the development of the NBN. This article was originally published on The Conversation. Read the original article.
The National Broadband Network (NBN) was one of former Prime Minister Kevin Rudd’s grand gestures. Sweeping to power in 2007, he quickly set to fixing Australia’s problems in education, health and productivity. Although it was clear that he only ever understood technology superficially, he netherless saw it as the answer to all of his country’s ills. Children in schools would get laptops, the health system would be reinvented through the Personally Controlled Electronic Health Record (PCEHR) and the nation would have the NBN to set it on the path of productivity levels to rival the Chinese. Rudd commands “Make it so” Rudd rode roughshod over any detail of these plans. He epitomised the spirit of StarTrek TV character Captain Picard by uttering the command “Make it so!”. Unlike Picard, who never carried out any action before considering it from every angle, Rudd was convinced that these gestures would both immortalise him and transform society and industry at a stroke. As we now know however, nothing is that simple, and the digital education revolution died a relatively quick death leaving the NBN and PCEHR struggling for survival on life-support. The NBN independent audit The most recent audit report of the NBN, released this week, has ultimately judged the entire project as “rushed, chaotic and inadequate” and the stewards of the project, NBN Co as “not fit for purpose”. The summary findings and recommendations of the audit do not specifically deal with the NBN project itself nor with the technological decisions that underpinned it. Instead, it recommends a range of measures to ensure proper oversight of election and other party promises and the way that the public service and government should work to ensure that this happens in future. One of the key proposals is that any project over $1 billion should be subject to a cost benefit analysis. The problem with this however is the same as for most of the recommendations made in this report. They sound good in principle, but are actually fairly meaningless in practice. The devil in the benefits Cost benefit analyses of even small projects are dubious at best. They are often heavily biased depending on the whether the people conducting them want to have a positive or negative outcome. This is reflected in both how one decides what benefits will flow from a project and how much value these benefits will generate. This is especially true of technology projects where the benefits are supposed. With the NBN, the benefits of having universal high-speed broadband were assumed to come from all of the things this technology would enable government, public services, industry and the public at large to do. Hospitals would save $190 million over 10 years. Households would save $3,800 a year by 2020. This last figure included savings of $74 dollars a year on “communications through social engagement and social media”. Clearly, you could claim almost any benefit, especially if it comes from a reputable analyst firm like Deloitte Access Economics as this latter figure did. Would an analysis have got it right? Would a cost benefit analysis in 2008 have accurately predicted the technical landscape in 2014? Absolutely not. In 2008, nobody knew that the iPhone would change smartphone usage completely and drive universal adoption of highly powerful portable computers with 4G wireless network connectivity. Nobody would have foreseen the rapid change in how people access media, especially TV. Despite the lack of the NBN, Australia leads the world in illegal downloads of US TV shows like Game of Thrones. Mix into this the role of government in making technological bets that they barely understand and the establishment of a completely new company that is going to implement all of this within political, and not corporate, constraints, and you have a recipe for the disaster that unfolded. Should governments be involved? The findings of the audit are not surprising. Pretty much any analyst who has been watching the NBN disaster unfold for the past 6 years could have summarised the findings, or ones similar to it, without too much problem. Ultimately however, the question remains whether governments, and especially the Australian Federal Government, should be even in this business at all. It is very likely that the answer is no given the particular geographic and social challenges that Australia faces and its particular mix of telecommunications industries. There is no disputing that Australia needs high speed networks. Clearly, they are not going to be provided by the Federal Government and so it is up to industry to step in and do this for commercial reasons. After all, the ultimate business case for building something is that there are customers wanting the service and that it makes enough money to support the business. This article originally appeared on The Conversation.
The NBN Co has announced the latest suburbs and towns in Victoria to be added to the National Broadband Network (NBN) rollout. Currently, the NBN Co is preparing fixed broadband rollouts in parts of Langwarrin, Werribee, Epping, Langwarrin South, Cranbourne West and Shepparton. According to the NBN Co, the latest news means pre-construction activities are now underway that will see 14,900 premises in the fixed-line footprint and 1200 premises in the fixed wireless footprint connected to the NBN. Meanwhile, fixed line services are currently being rolled out in other parts of Langwarrin, as well as Melbourne suburbs Seddon, Yarraville and Kingsville. The NBN Co is also constructing fixed wireless infrastructure in south-western Victoria (Macarthur and Simpson), the Grampians (Balmoral and Drummond) and the Loddon-Mallee district (Elphinstone and Watchem). Hpowever, it can take around 12 months from when construction begins to when residents and business owners can receive NBN services from phone and internet providers. In a statement, the NBN Co spokesperson Trent Williams says the networks already pass more than 140,300 premises in Victoria, with 49,800 currently connected. "The rollout of the NBN continues to gather momentum throughout Victoria which means more families and businesses are a step closer to being able to benefit from fast and reliable broadband," Williams says. "The NBN has the potential to be a key driver of growth in Australia’s declining manufacturing industry. Access to fast and reliable broadband can provide new opportunities for innovative businesses to create niche products, expand into new markets and reduce operational costs." Meanwhile, services have now been switched on for more than 10,000 premises in Tullamarine and Shepparton, with businesses in these areas urged to begin planning their migration to the network.
NBN Co and Telstra have reached agreement on an expanded program to plan, design and construct fibre-to-the-node (FTTN) high-speed broadband to about 200,000 homes and businesses. The agreement marks a major step forward in the Government’s ongoing reform of the National Broadband Network. The reforms currently underway at NBN Co will ensure the network is delivered sooner, at less cost to taxpayers, and more affordably for consumers. The number of premises to be covered by the project is roughly equivalent to the 206,000 homes and businesses passed by the NBN fibre-to-the-premises (FTTP) rollout in established neighbourhoods over the entire period the previous Labor government was in power. NBN Co will continue to deploy its FTTP, fixed wireless and permanent satellite networks during the period of the FTTN trial deployment. NBN Co’s contract with Telstra will ensure initial rollout of FTTN focuses on areas categorised as ‘underserved’ in the Government’s MyBroadband broadband quality study. NBN Co estimates areas underserved with broadband account for around 28 per cent of the premises in the rollout regions. ‘This announcement demonstrates how FTTN can help to bring broadband more quickly to many regional areas than would have occurred under Labor’s plan—and that is good news because upgraded broadband can help regional communities capture improved economic, educational and social opportunities,’ said Paul Fletcher, Parliamentary Secretary to the Minister for Communications. Rollout regions included in the trial project include: Belmont, New South Wales Bribie Island, Queensland Boolaroo, New South Wales Gorokan, New South Wales Morisset, New South Wales Hamilton, New South Wales Bundaberg, Queensland Caboolture, Queensland Gympie, Queensland Warner, Queensland In addition, the NBN will expand its current FTTN pilot in Umina on the New South Wales Central Coast. The agreement for a thousand-node FTTN trial represents an interim step while NBN Co, Telstra and the Government finalise changes to the existing Definitive Agreements covering Telstra’s participation in the NBN. It is anticipated that these changes will include arrangements for the NBN Co to gain access to Telstra’s existing local access network. In parallel NBN Co will work closely with telecommunications retail service providers to finalise the design of its FTTN products and provide services to end-users. Early line tests using Very-high-bitrate Digital Subscriber Line technology (VDSL) indicate that download data rates of up to 100 megabits per second and upload data rates of up to 40 megabits per second are achievable over copper lengths of a hundred metres. The top available downloads speeds are approximately 17 times faster than current average fixed line broadband connections to Australian households. These speeds allow ten high definition television shows to be streamed to a single household or business concurrently. A three minute YouTube video will be able to be uploaded in as little as 42 seconds, compared to up to 20 minutes on today’s average ADSL connections. Since the September 2013 election the number of households and businesses with active service over the FTTP network has tripled from 48,000 to 146,000. In the same period the number of premises passed by the FTTP network has almost doubled to 482,000. Telstra, the NBN Co and the Government are well advanced in negotiating changes to the Definitive Agreements. These negotiations have not yet concluded but are progressing well. The limited deployment of FTTN is an important step in allowing NBN Co to determine how a multi-technology mix rollout will change its construction and service provisioning operations.
South Australians will no longer have to search for a hot spot or a café with Wi-Fi in the Adelaide CBD, as the city today switches on free wireless network access throughout central Adelaide. While Telstra is rolling out its Wi-Fi hotspots across Australia, national broadband provider Internode, a subsidiary of iiNet, has got a jump on the South Australian Wi-Fi game with the creation of its AdelaideFree wireless network. Launched today in partnership with the South Australian government and Adelaide City Council, Internode says AdelaideFree’s 300 wireless access points across the city will saturate almost the entire CBD, offering free Wi-Fi to more than 30,000 people. Internode says the network will provide blanket coverage between North Terrace and Wakefield Street/Grote Street and broad access areas in the south city, North Adelaide and the most heavily frequented parts of the Adelaide parklands. “Already people in Adelaide are embracing this new Wi-Fi capacity. Internode has recorded about 50 per cent increase in use of the Wi-Fi network since announcing AdelaideFree’s deployment last year,” said Internode chief business officer Greg Bader. AdelaideFree is installed at external locations throughout the CBD including the Festival Centre, the SA Museum, the State Library, the National Wine Centre and the corporate function centre located in the historic Adelaide Stock Exchange building. The telco says the network is one of the largest CBD-wide outdoor wireless networks in the world and was well tested during Adelaide’s “Mad March” festival season.
News that Google representatives are in talks with Richard Branson’s Virgin Galactic are seen as further evidence the web company is looking to set up a series of low-orbit satellites to help connect more people to the internet. Reports earlier this month said Google was planning to spend more than US$1 billion on a network of 180 satellites to provide internet access from space. Then Google revealed last week that it paid US$500 million for the satellite imaging company Skybox. It says the deal will give it access to better imaging technology for Google Maps, but it could also see it launch a new satellite network for delivering internet access. Google is already experimenting with new ways to provide internet access in remote locations through its Project Loon, which began in New Zealand last year and uses antenna held aloft in balloons. Access to digital networks and information are playing an increasingly important role as we move towards a more networked society. The global population today is approximately 7.1 billion, yet only 2.4 billion people are connected to the internet. Over the next six years this is expected to double, reaching 5 billion in 2020. It’s not just about the web Significantly, internet users will not be the key source of growth. There is increasing demand coming from a range of devices, systems and infrastructure being connected to the internet – home security systems, personal health monitors, cars, trams, trains, smart meters for power, gas and water, traffic lights and offices, as well as public spaces and buildings. As the internet is further industrialised the big technology companies are tapping into the growth in networked devices – usually referred to as the Internet of Things. Currently, 16 billion devices such as smart phones, tablets, security systems and smart meters have a network connection. This will grow exponentially towards 50 billion in 2020. There is a change in the focus of connectivity too - from individual people to houses, towns and cities. Large information and communication technology (ICT) companies such as Google are driving this increase in global connectivity, as their biggest market growth opportunity lies in the areas of population that do not have internet access. The World Economic Forum – which monitors the digital divide through its annual Networked Readiness Index – also sees the urgency in making the internet accessible to remote communities from the developing world. They are the people likely to benefit from substantial improvements in the quality of life through access to ICT. Other players trying to connect the world Google is not alone in this race. Facebook’s founder Mark Zuckerberg has also announced similar satellite plans to connect the unconnected, through the internet.org project. There have been past attempts to increase internet connectivity via satellites, such as the Iridium Project by Motorolla, now Iridium Communications. Iridium provides satellite phone connectivity across the globe via a constellation of 66 satellites. The service is limited by very low data rates - approximately 10kpbs - with costs of around A$1 to A$2 per minute of access. Well ahead of its time, the Iridium project faced significant challenges with a range of technological issues as well as failing to effectively monetise the idea. There were serious issues with the inter-satellite links needed to maintain the network, its handsets were bulky and its internet access plans were expensive. It remains largely an emergency communication tool and for infrequent access such as asset tracking in maritime/defence applications. Iridium plans to launch a new satellite service, Iridium NEXT, delivering peak download rates of 1.5Mbs by 2017. We will have to wait to see if the second incarnation of Iridium can increase its subscriber base. There have also been several other commercially yet-to-be-proven proposals that looked at high altitude long operation platforms making use of aircrafts and balloons to deliver similar broadband services. These platforms use the millimetre-wave (30-300 gigahertz range) frequency bands (currently targeting around 28-33 gigahertz range) to deliver broadband wireless services to locations theoretically wherever access is required. But none have yet to offer a product to market. Current satellite constellations are small (such as the 66 in Iridium) with each satellite often covering an area in excess of 1000km2. With limited bandwidth (often less than 100 megahertz available) to share between thousands of subscribers, individual subscribers get very low internet speeds. Looking for growth Yet new services are emerging. The Federal Communications Commission in the United States has approved Globalstar’s request to use a frequency band adjacent to the WiFi frequency window to offer satellite based WiFi coverage. Additionally, operators such as Intelsat and Inmarsat provide satellite internet connectivity across the globe. The growth in connected people and things presents an expanding market opportunity. Google’s business relies on its users delivering information upon which it can target advertising. It appears to be pre-emptively meeting the projected demand in order to increase its services. Satellite technology has matured and is now able to provide increased access and throughput to users and devices. Google’s approach is similar to that deployed by mobile phone operators. By increasing the number of satellites, individual beams can cover smaller areas, approximately 100-200km2 thus sharing scarce frequency spectrum with fewer customers, increasing internet access rates. Competition for Australia’s NBN In Australia, NBN Co offers broadband plans using existing satellites to about 3% of Australian population scattered around the massive landmass in areas with lower population density. The company has been designing its own satellites, which will be launched soon to increase access to broadband in remote Australia. But the project is facing major obstacles in terms of securing the highly regulated satellite launch rights. It is reported that NBN is in negotiation to secure a launch orbit spot. Google is not confining its vision to satellites or balloons. Google Fiber also plans to offer fibre connections with greatly improved speeds (compared to that offered by NBN) in selected USA cities directly competing with traditional telcos such as AT&T. This is driving innovation in the sector, with these new technologies providing possible options for the NBN to deliver broadband to cheaper and faster to remote Australian regions where wireline access to broadband may be difficult. Google’s satellite play highlights its serious intention to move into the new converging world of computing and communications, driving further competition and changes in the communications sector in the near future. Thas Ampalavanapillai Nirmalathas is currently the Director of Melbourne Accelerator Programs (MAP) which supports entrepreneurial activities of the University Community through business acceleration models. He is also an Associate Director for the Institute for the Broadband-Enabled Society. This story was originally published at The Conversation. Read the original article.
Nokia has confirmed that it has acquired Brisbane-based company Mesaplexx in order to boost its radio capabilities in the networks business. Mesaplexx were recent recipients of the now defunct Commercialisation Australia grant. In a statement on its company blog, Nokia says: “Mesaplexx has unique know-how in developing compact, high performance radio frequency (RF) filter technology for the mobile industry. “Nokia is continually improving its radio systems whilst making them smaller, lighter and more efficient. The Nokia Flexi family of radio access base stations offers cutting-edge solutions that balance energy efficiency, power output and form factor. Adding the very advanced Mesaplexx technology can enhance them further, potentially reducing small cells form factor by 30% or more. “Every base station needs RF filters, for example to ensure that spectrum can be shared within the same geographical area and that the same antenna can serve for both transmit and receive purposes. The Mesaplexx expertise could help improve radio performance, leading to higher capacity and more efficient networks. This technology would also help reduce overall cost and power consumption and keep radio signal loss to a minimum.” “Those familiar with radio technologies know that while there has been a lot of progress in recent years, filters are one area where new innovations can still yield significant improvements in performance,” said Marc Rouanne, executive vice president, Mobile Broadband at Nokia. “This company’s stand-out expertise has the potential to achieve that.”
Small businesses will be able to use Telstra’s $100 million national public Wi-Fi network to provide free internet to their customers. Telstra is asking its small business customers if they will turn their service into a Telstra Wi-Fi hotspot and to be promoted by Telstra as a destination to connect. Alan Crouch, director of connected home at Telstra, told SmartCompany it was a great offer to small businesses such as cafes, shops and doctors surgeries. “The whole idea is to be able to provide a place for people to connect,” says Crouch. “When they’re out and about getting a coffee or when they’re at the doctor, they’ll see the Telstra Wi-Fi there and it gives them a chance to have multiple choices on how they connect.” Telstra broadband customers will be able to install new gateways allowing them to share a portion of their usage quota each month in exchange for free access to the network. Crouch says the details of commercial negotiations and costs for business haven’t yet been decided. “It’s really a ‘better together’ scenario, there’s mutual benefits,” says Crouch. “We’re providing a service to people that’s going to make them want to come visit shops.” He says the telco has had considerable interest in the Wi-Fi hotspots in the past 24 hours since it announced its new network. “We’re asking all of Telstra’s small business customers to start this conversation with us.” Small business owner and Telstra customer Salvatore Malatesta, the man behind Melbourne’s popular St Ali cafes, says he would welcome the Wi-Fi hotspot in his cafes. But he says the business already spends a considerable amount on corporate phone plans and would not want to pay any extra fees for the service. “If they want ambassadorial clients to embrace their technology and give them lots of love on social media platforms and that sort of thing, then it should be free,” says Malatesta. Interested business can register their interest here. This article first appeared on SmartCompany.
News that Telstra plans to build a national wi-fi network, as reported by The Australian and Fairfax mastheads, shouldn’t come as a shock. Given the volatility of anything and everything to do with mobile internet use, nothing should surprise us any more. But it should scare you. Telstra’s plan, which is being announced right on Crikey’s deadline, will — according to tweets from ZDNet’s Josh Taylor — reportedly see $100 million spent showering the country with new modems for broadband customers who choose to act as wi-fi hotspots using Fon sharing technology. It’ll be free to use by the telco’s fixed broadband customers, although any data used will count towards their quota, and a “small daily fee” for others. Arranging free wi-fi for fixed broadband customers is not uncommon in Asian and North American cities, although the Fon sharing is a less common twist, and it’s a logical move for Telstra for the same reasons. It makes the telco’s fixed broadband packages more attractive, it reduces the load on 3G/4G mobile broadband services in high-traffic areas, and — not talked about so much — it provides more opportunities to track customer behaviour for all those data mining and monetisation strategies that make modern telcos into something much more like a media company. For all the hype around the “mobility revolution”, and while consumers are increasingly using their mobile devices away from the home or office, the growth in Australia’s mobile broadband market was just 3% in the 12 months to December 2013, according to research released yesterday by analyst firm Telsyte. The proliferation of public wi-fi hotspots, which Telsyte analyst Alvin Lee says are “sprouting like mushrooms and are now widely supported by local councils, shopping centres, local businesses and increasingly our transport networks”, means that there’s less need for a dedicated mobile broadband device — particularly as most smartphones can now operate as a wi-fi hotspot, and people are becoming more comfortable pressing that button. “The opportunity for dedicated mobile broadband is diminishing even as mobile traffic continues to grow,” Lee said. As a result, Telsyte believes telcos will only be able to monetise 20% of the consumer media tablet market. Indeed, why would anyone want to load yet another device into their pocket, perhaps with yet another charger, and certainly with another monthly bill? Whether this will play out well commercially for Telstra remains to be seen. As Fairfax’s David Ramli points out: “Other Australian companies have attempted to use Wi-Fi hotspots to give customers more internet services on the go with very low success rates.” iiNet sees its wi-fi offering more as a marketing tool. My weekend in San Francisco showed how this might play out. AT&T has wi-fi hotspots across the city, and you see their branding every time you look for a connection. It left an impression. But at the same time, most bars, cafes and shopping malls have “free” wi-fi too — along with power outlets and somewhere to sit. “Free” is in scare quotes there because the use of wi-fi for tracking consumers is becoming ever more sophisticated. Toronto-based Turnstyle is just one of the companies pushing the boundaries in this regard. By rolling out a unified wi-fi network throughout the shopping district, they can track people as they go about their business. As The Wall Street Journal reported in January: “Turnstyle’s weekly reports to clients use aggregate numbers and don’t include people’s names. But the company does collect the names, ages, genders, and social media profiles of some people who log in with Facebook to a free wi-fi service that Turnstyle runs at local restaurants and coffee shops… It uses that information, along with the wider foot traffic data, to come up dozens lifestyle categories, including yoga-goers, people who like theater, and hipsters.” If Telstra is planning something similar — and given that this is increasingly the way things are done, I suspect it’s likely — then this could be the start of one of the most comprehensive consumer tracking databases in the country. This article first appeared on Crikey.
The Abbott Government’s first federal budget has allocated funds for capital investment into the National Broadband Network (NBN) to continue up to 2017-18 but with a cap of A$29.5 billion. This falls well short of NBN Co’s original forecast of A$44.1 billion not withstanding various estimates of cost blowouts and new NBN Co leadership’s revised forecast of A$72.6 billion. The Coalition under Tony Abbott’s leadership in opposition and in government has long maintained that NBN could cost less and be rolled out quicker. That commitment was confirmed this week by Communications Minister Malcolm Turnbull following the budget announcement on spending. In a statement, he said the budget provides A$20.9 billion in equity funding to NBN Co to cover up to 2017–18. This is on top of A$8.6 billion already committed bringing the total to the capped A$29.5 billion. New sources of funding needed NBN Co CEO Bill Morrow now faces some difficult decisions in deciding how best to allocate resources to meet the objective of providing high-speed broadband across Australia. Since the Coalition’s election in September last year the NBN has been subject to a number of reviews and a wholesale clean out of management. With many reviews, such as the cost-benefit analysis, yet to report, the strategic direction for NBN Co is uncertain making it difficult to comment on future developments with accuracy. What can be said with certainty is the capping of the government’s investment gives a clear indication that Coalition’s NBN will be vastly different from that proposed under Labor. But some issues will need to be addressed so they do not provide a thorn in the side to NBN Co or hinder the rollout of broadband across the community. The funding cap amplifies the need for private investment. Only A$57 million has so far been earned in revenue related cashflow against the A$7.3 billion invested to date. NBN Co will therefore be required to increase revenue and raise funds through private equity or debt financing to ensure it can fund both operational expenses and future capital investments. But it will need to show an attractive rate of return potential to lure Australian institutional investors, superfunds and other international investors. Alternatively NBN Co will be forced to secure loans to bridge the gap. But whether the Abbott government would offer debt guarantees to the company remains an open question. NBN Co may seek to reprioritise the rollout of the planned network by cherry picking more profitable connections in metropolitan regions. But this may detract from the rollout of services in areas with a higher capital cost, such as regional towns and outer suburban areas, which are often those areas that have the most to gain from the provision of broadband. Deals with telcos The A$11 billion deal with Telstra to lease part of its existing network is currently under renegotiation. This might extend to accessing existing fibre-to-the-cabinet, hybrid fibre-coax and dark fibre in addition to copper infrastructure to speed up “new” NBN rollout. A changing technology mix means that some existing copper will not be decommissioned, entering operation as part of the NBN. The outcomes of the renegotiation and the terms of any new agreement will impact the rollout and the future technology mix. Fibre-to-the-node in some form and maximising the use of existing copper infrastructure appears to be a dominant base for such mix and existing carrier infrastructure may offer opportunities in a funding constrained environment. By further reviewing its construction and installation methods NBN Co may be able to achieve some cost savings and curtail cost blowouts. Network competition The NBN Co is operating in an uncertain regulatory environment. The current rules were set up with the NBN Co being a monopoly wholesale infrastructure provider. But internet service provider TPG’s plan to rollout its own fibre-to-the-basement network is changing the telecommunications landscape requiring a regulatory response. Failure to clarify this would force NBN to lose opportunities in rolling out to rapidly expanding apartments sector with a customer base often opting for higher tier services. Australia would then see its history repeated once more with parallel network rollout similar to the hybrid fibre-coax rollout by Telstra and Optus. Maintaining the wholesale monopoly for NBN Co could have possible competitive consequences. Currently there appears to be a confusion in the way wholesale services are defined with potential restrictions on emerging market opportunities. NBN review panel’s terms of reference is seeking input on clarification of this. Relieving NBN Co of its wholesale-only constraints, or at least redefining its limitations, would allow it to provide network connectivity directly to business end-users such as mobile base-stations, large businesses, governments and national infrastructure such as power grids which offer high growth potential. This approach would be good for NBN Co as it would open new revenue streams that would support the government’s desire for the company to increase private investment. Thas Ampalavanapillai Nirmalathas is a Professor of Electrical and Electronic Engineering. He is currently an Associate Director with the Institute for Broadband-Enabled Society which has received funding from a range of sources including the University of Melbourne and Victorian Government. He is also the Director of Melbourne Accelerator Program which helps to promote entrepreneurship culture through acceleration of start-ups. Views expressed in this article is entirely that of the author and do not reflect the views of his employer - University of Melbourne. He receives funding from the Australian Research Council. This article was originally published on The Conversation. Read the original article.