BuddeBlog

Overview

In January 2007 Optus began the rollout of a 3G High-Speed Packet Access (HSPA) network upgrade. The new network would replicate the coverage of Optus’ existing GSM (2G) national mobile network.

Optus would own the new network without joint ownership by Vodafone or other partners, but would continue to jointly own and operate its existing 3G network in metropolitan areas with Vodafone.

The rollout was to be completed by network vendors Huawei and Nokia Siemens Networks, and Huawei.

Optus has used the 2100MHz band in capital cities for the High-Speed Downlink Packet Access (HSDPA) rollout, and would use a mix of 2100MHz and 900MHz for the next 18% of the population. The 900MHz range is primarily used in rural and regional Australia. Unlike Telstra’s Next G service, the network is wholesaled.

Network speeds

Optus’ partners on its HSPA solution are Nokia, Option and Huawei. Optus customers initially will experience download speeds averaging 500Kb/s to 1.5Mb/s and network capability of up to 3.6Mb/s. By mid-2008 the network was being upgraded to deliver broadband speeds of up to 7.2Mb/s.

Optus believes saving over $300 million are achievable rolling out its 900MHz 3G network to regional Australia.

Network coverage

Optus’ initial plan was to expand its footprint outside of metropolitan areas to rural and regional Australia to around 96% of the population by the end of 2008. The network was to support 2,000 to 2,500 base stations over 7,500 sq km in 2007.

However, in May 2008 Optus announced that it would extend coverage further to reach 98% of the population in a $315 million program.

By late 2008 Optus completed its 3G mobile network rollout on schedule to reach 96% population coverage. Optus continues to invest in transmission, backhaul capacity and additional mobile site coverage. Coverage would be extended to 98% of the population with the network footprint exceeding 97 % coverage by early 2012.

This brings Optus’ total 3G investment to nearly $1 billion. At least 750 new base stations would be added, extending Optus’ mobile network coverage by 400,000 square kilometres to a total network coverage of more than one million square kilometres. The network would extend the footprint to reach areas including Fitzroy Crossing in Western Australia and Tumby in South Australia, through to Weipa in far north Queensland. Optus will be aiming to take some of Telstra’s 55% market share in the rural and regional markets with its new expansion plans. Optus also believes that the expansion would make the carrier more appealing to metropolitan users who need national coverage.

Rollout progress

A summary of Optus’ 3G HSPA rollout progress is as follows:

• network rollout began in January 2007;
• by June 2007 the first stage of its network upgrade had been completed, with 55% national coverage;
• by the end of 2007 Optus’ network reached 60% of the population;
• by January 2008, the network covered Wollongong and the greater Illawarra region;
• Optus hit its target of 80% coverage by 30 June 2008;
• by July 2008 Optus had upgraded all its mobile sites in Darwin and launched its 3G service there. It was also planning to build extra sites to expand its 3G coverage in Moil, Malak, Charles Darwin Uni, Ludmilla and Darwin CBD West in the third-quarter of 2008.

In 2005 Telstra announced a mobile TV trial with 1,000 customers. A partnership had been formed with The Bridge Network (a full subsidiary of Broadcast Australia), which would develop the service for the company. The trial was based on the DVB-H standard. 

The Sydney-based 12-month trial with 375 users, known as ‘Movemedia’, was launched in 2005. During the trial, customers were able to watch programs from the ABC, Foxtel SBS, Nine Network, CNN, Sky Channel and other sources on Nokia GSM phones equipped to receive the signals which were being broadcast from the ABC’s Gore Hill transmitter. Coverage was expected to reach about 80% of Sydney. 

The trial was the first in the world of DVB-H using transmissions from a single high-powered transmitter and used one of two UHF channels presently reserved in capital cities for future services. No commercial services would be possible until ACMA made a decision on how to allocate these channels for commercial use. 

Telstra conducted its own experiments with mobile TV while participating in the trial, which allows simultaneous transmission of television broadcasts to mobile phones and PDAs. During the Commonwealth Games in 2006, users of its Third Generation (3G) mobile phone service were able to stream coverage of events from Telstra’s BigPond website. 

After the trial Telstra reported that 80% of the participants reported liking the ability to watch TV on the move, with viewing increasing during week days as workers accessed the service on the way to the office and at lunchtime. Users accessed the service for an average of 25 minutes per viewing session, with one or two sessions per day. The most popular content was general entertainment, news and documentaries, all of which met expectations, though many noted that they would like to be able to download and record programs to watch later. 

Later on that year Telstra suddenly announced its departure from the partnership, citing regulatory uncertainty. Telstra preferred to develop further services alone and established its own mobile TV business unit. Speculation had been mounting that it would bid for one of two new digital licences, able to carry up to 15 channels each and which could be used to deliver live television to mobile phone handsets.

Over the past five to ten years we have seen great improvements in IT infrastructure developments, both in business and in government organisations.

Driven by the need to save costs, IT systems have been implemented that have automated many front- and back-office activities. Apart from the actual IT changes involved this has also changed the workforce behind these applications. Many people needed to be reskilled so as to be able to operate basically the same functions but with different tools. Often this consisted of changing from a largely manual process to a fully automated one.

The multi-billion dollar investments that are taking place have also resulted in super fast, efficient and cheap hardware.

An overview of some these new processes include:

• ordering, purchasing and transactions;
• dealer and sales support, customer service systems;
• automation in healthcare and education;
• e-government between agencies, services and applications to the public;
• web-based services (front-office and back-office);
• online publishing, media and advertising services.

While some services directly involve the public, most of them are still more on an internal level – between departments, between health care facilities, between government, their agencies and schools, hospitals, police offices, and so on.

The next revolution will take place between these organisations and their end-users. And broadband is the key infrastructure for the delivery of these services.

After five to ten years of practice with the above mentioned systems and applications, most organisations are now ready to take this next step. Further cost savings and the availability of low cost IT solutions are going to drive this.

As is becoming clear in countries where high-speed broadband infrastructure is widely available, businesses and government agencies are now pushing these IT applications out to the public. The first indications are that this can lead to direct cost savings of between 5% and 15%.

This is going to have an enormous impact on the budgets of health and education departments, and on the budgets of businesses with large customer service overheads. Many organisations desperately need these new IT/broadband facilities to be able to keep up with the demand for their services; this is most urgently the case in healthcare.

Already we see ‘impatient’ providers pushing for a faster rollout of broadband infrastructure; some are becoming actively involved in what are, for them, key markets; and others are looking at subsidising infrastructure costs in order to be able to push out their e-services.

The infrastructure costs involved in these services is often below 5% of the total costs; and it’s never more than 10%, so they can see the advantages of becoming involved in these broadband infrastructure developments.

Some telcos have problems understanding the massive shift that is taking place before their eyes, and they are unwilling, or incapable, of making the changes necessary to facilitate this process. However, this is the tsunami I have been talking about, and it is simply unstoppable.

Some telcos are now starting to face the consequences of having underinvested in their local access infrastructure for the last decade or more. No wonder others have become impatient and begun to look at alternative infrastructure (often, of course, in the most lucrative parts of the network first).

These include large cities such as Amsterdam, Brisbane, New York, San Diego and Stockholm (the last one already since 1990). Online media companies wishing to get their services out are building wireless broadband networks, and companies such as News Limited are providing free broadband access, provided the customer subscribes to their services also. Regional towns – really feeling neglected in all this – often have no choice other than to directly manage the process themselves.

Over the next five years we will see an explosion in high-speed broadband infrastructure, from both the incumbent providers and elsewhere. This will often be a chaotic process, as it means an enormous change to the monopolistic structures that are currently in place -which are often not able to cope with the massive increase in demand for bandwidth.

Most countries are ill-prepared, lack the appropriate government policies to address these national infrastructure developments, and are still not completely capable of grappling with these changes.

Paul Budde

For more info see:-
Global Broadband Infrastructure

Global Broadband Analyses & Forecasts

1. THE PASSING OF KERRY PACKER

The death of Kerry Packer in December 2005 is one of many events that, combined, leads me to throw them all on the pile of the way things used to be.

For me, the death of Kerry Packer marks the end of an era that was full of drama.

I find myself looking back on affairs such as Telstra’s kicking and screaming during the last half year, Foxtel’s fight for survival and Seven’s court case. Other examples could be found if we were to look closely at some of the SingTel/Optus and TCNZ/AAPT developments.

2. MEDIA INITIATED GOVERNMENT POLICIES

These were all significant events within the environment of the time.

They took place in a world that was driven by government policies, and if you were skilful enough you could carve out a nice market for yourself and exploit the regulatory environment to the maximum by keeping competitors out. You could create monopolies, duopolies or cosy alignments with your peers around demarcation lines, in order to live and let live.

If things got hot you simply went off to Canberra for some pork-barrelling and you were set for another five, 10 or 15 years. I think Kerry Packer heads this list, as he was able to get a 15-year pay TV moratorium from the government to protect his wealth.

3. FROM BULLYING TO COOPERATION

However, slowly but surely this era is coming to an end. Telstra has been given some stern messages from the government, and with Kerry gone, fear and intimidation will now also be throttled down somewhat, which may allow for more rational media policies. I can’t see James being like his father, and I don’t think current times will allow for a new generation of business bullies.

But far more importantly, the battles are moving from government lobbying to competition based on new technologies. Competition for Packer’s Channel Nine now comes from broadband Internet, and Telstra is under threat from the same direction, with Internet-based companies setting the scene and wireless bypassing those parts of the network they abstract monopolistic rents from.

Seven’s court battle only further highlights the enormous powers that were at play in the old world of domination and bullying. Whatever the outcome, the picture this case presents of the traditional players in this market is very ugly indeed.

It is also a world where very intelligent, highly educated and senior business executives, during all of those old-era court cases and Senate hearings, suffer from persistent memory loss. Do these industry leaders realise what an example they are setting for their own employees and for the next generation in general? I am sure their behaviour will backfire on them, as most of the younger generation is appalled by this kind of behaviour. It also sends a clear message to the customers of the companies these executives represent – that they can’t be trusted.

4. MEDIA NEED TO PULL UP THEIR SOCKS

Unfortunately many are blamed for the behaviour of the few, since all business will be lumped together in a universal condemnation of free trade agreements and globalisation. I hope it is not too late for the young Packers and Murdochs to change their behaviour; otherwise this third generation will bring about the final demise of the empires built up by their fathers and grandfathers.

They no longer have the bullying powers of those old-timers, and the empires they rule are being attacked by technological developments such as the Internet, an area in which government protection is unavailable. Anyway, national border (protection) no longer applies in the global world of the Internet. It doesn’t matter what the service is – TV, entertainment, information, communications – these are all rapidly becoming global products, and the government can do little to continue to protect its media mates.

5. WATCH OUT FOR THE INTERNET MEDIA COMPANIES

As we have said before, the traditional companies have a huge task ahead in trying to find a new place in this rapidly changing business environment. Competition no longer exists between the media or telecoms companies. It comes from a totally different direction – from the many new players, such as Google, Yahoo!, eBay, Skype, Amazon, Microsoft and so on.

Just look at the different approach these two groups take to customer service. The old world has been paying expensive lip service via TV campaigns, to let their customers know how much they care. The new world simply delivers high quality customer service over the Internet.

Guess where the customers are going?

Incumbent telcos are losing customers in huge numbers and so are the media companies. And newspaper readership and TV audiences are nosediving. This is also reflected in the status of the share prices of these companies.

So it is two minutes to midnight for the old media and telecoms industries to change their tack and start some serious business reconstruction, so that they will be able to participate in the new era.

Now is the time to stop the rearguard battles aimed at preserving an age that is doomed to disappear.

Nowadays people who are ‘upwardly mobile’ are not satisfied with houses that have poor broadband. In Dubai some 20,000 people are already on fibre in new housing developments. In all, well over three thousand fibre rollouts are currently taking place in new housing developments around the world.

There have been significant delays in fibering new housing estates in Australia. Developers have not been accustomed to being involved in telecoms infrastructure and they naturally looked to the carriers to do this work for them in the new developments.

However, neither Telstra or Optus have shown much interest. They want to be paid for it and they want a monopoly use of these networks. The other major stumbling block has been Foxtel’s unwillingness to come to the party. This monopolistic behaviour has been unacceptable to the housing developers and, after close to two years of time-wasting, the developers themselves are now investing in fibre rollouts. They own the facilities but in general will use independent operators to run the service.

More advanced developers are going one step further and are making the fibering central to their development, to create connected and intelligent communities – using it as a marketing tool to attract home buyers and businesses to their estates. They develop an estate around this concept and sell it as a major lifestyle improvement. Data centres for businesses, video studios for entertainment and professional services, as well as e-health and e-education facilities, all form part of such a concept. Homes are also designed with teleworking and home networking in mind.

As a result of Telstra’s unwillingness to cooperate developers are being forced to facilitate the deployment of two cables, for their own fibre and for Telstra’s copper cable network – so much for the clever country.

State governments have also come across the same problems, and in Victoria and Tasmania they have become actively involved in driving these projects.

Local councils, too, are seeing the benefits of FttH for the development of their communities. On a smaller scale, they recognise the social and economic benefits of FttH at a local level. They also see this as a new way to attract people and new businesses to their towns. Several councils are already actively supporting FttH in their new housing estates and it is rapidly becoming a fixed element in development applications.

See also:
Australia – FttH Market in 2006 – Analyses
Australia – FttH Models, Overview, Costs, Forecasts
Australia – FttH Projects
Australia – FttN plans from Telstra and competitors