The NBN in 2013
At the start of 2013 NBN Co indicated that the rollout plan was now slightly above target. This bodes well for a rapid rollout of the network, to reach close to four million connections by 2015. With all the major foundations now in place it should be reasonably plain sailing from here.
The ACCC has laid down its wholesale conditions for the transitional period and it is in this area that further tension will develop, especially at the point when the copper services are actually being cut off and all the customers are being transferred to the FttH network.
Also, more detailed information is becoming available from the Opposition and, while there remain strong areas of disagreement, the reality is that despite the possibility of a change of government in late 2013 the NBN is here to stay.
The Opposition certainly has some valid points of criticism, which we share with them. There is still a misalignment between the social and economic benefits of the NBN and NBN Co’s business plan. The Opposition also wants to prioritise the underserved areas and is looking at other technologies to create some earlier wins. The question, however, is how much can be changed at this late stage – and also if this really will lower costs and speed up the rollout.
Australia is highly reliant on its income from natural resources and, like other resource-rich countries, it needs to diversify its economy. Interestingly, it is these resource-rich countries that are leading the rollout of FttH around the globe. The key reason for the government’s involvement in the NBN is to increase the country’s competitiveness and productivity.
The first retail prices are very promising. Entry level charges are most competitive and will assist in a reasonably easy transition from the old networks to the NBN.
Focus shifting to the digital economy
With the roll out of the NBN now well and truly underway people are starting to look at what this new infrastructure means for them. This is helped by the experiences organisations have already had regarding the impact of the internet, plus the fact that the current financial and economic climate is forcing cost-cutting and improved productivity.
The debate has shifted to what is needed to transform society and the economy in order to obtain the benefits of digital productivity. The NBN is no longer the story. Instead it has created other, new stories in the many different components of our society and our economy.
With slow-growing and stagnating developed economies and increased competition from the highly productive developing economies there is no other way for the developed economies to maintain their current economic and social lifestyle but to become more productive; and there is no better way to do this than by utilising smart digital technologies.
Within that context perhaps the single most important element will be the smart use of big data. As discussed in the report, this is also why we need the NBN – not to get faster access to the internet, but to build the right digital infrastructure – infrastructure that has the capacity, reliability, security, etc to allow the country to increase the amount of data needed to create digital productivity, to create a smart country – not just more data but also the capability to connect that data to achieve smart outcomes. The growth in M2M will be phenomenal.
Organisations are starting to understand this, and this is certainly stimulating the shift in the debate. It reflects the increased understanding of people in general regarding the benefits of the digital economy.
One example from the report alone should make everybody sit up and listen. Currently 20% of the national budget (all levels of government combined) is spent on healthcare, and this is set to double over the next 40 years. This, of course, will not happen, as it is totally unsustainable – it would, for example, mean that the total State budgets would have to be spent on healthcare alone.
While it will not happen the alternative, in a linear scenario, will have to be a very dramatic decrease in the level of services and the affordability of medical services. For many years BuddeComm has earmarked healthcare as the key sector that will profit from the gains we can make in digital productivity. The financial gains in healthcare alone could, over a period of 10 years, pay for the total cost of the NBN.
The report provides an up-to-date and detailed overview of the rollout of the network, the players involved, their product offerings and their plans and prices. It covers the FttH, fixed wireless, satellite and greenfield markets. The transitional period and Telstra’s role in this are dealt with in separate chapters.
It also provides insights into NBN Co and overviews of the contracts and the companies involved in building the network, as well as analyses of the infrastructure.