Ovum asks if Australia really needs an NBN?

Alex Zaharov-Reutt
Tuesday, 18 November 2008 10:31

IT Industry - Strategy

Ovum notes that Telstra and Optus are offering HSPA as a substitute to fixed line broadband where it does not have fixed broadband service, with Telstra having fixed ADSL services across 92% of the population, and HFC or ADSL 2+ to 80% of the population.

Optus is in a similar position but with a much smaller fixed broadband footprint, although 3 Mobile and Vodafone have no fixed broadband to speak of and can promote all they want without the worry of “cannibalising fixed broadband revenue” – although they must be careful not to “Optus” their 3.5G networks and put on too many customers, thus greatly Optusing-off their existing customer base.

Wow, did I just turn Optus into a verb? Yep.

Anyway Ovum says this is all “just the tip of the iceberg” and notes that HSPA wholesale agreements give many ISPs the opportunity to deliver HSPA services to areas outside their ADSL2+ footprints which are mainly metro-city based.

Ovum also notes the Optus problem (without mentioning Optus) by advising that ISPs need to ensure “enough network capacity is provisioned, and matching existing fixed broadband price points for service and devices.”

There’s also the issue of “convincing users to churn” because “many users are accustomed to broadband technology being delivered over a fixed solution” and that “educating users on wireless alternatives will prove challenging” – although 1 million wireless broadband users who gone wireless already might suggest otherwise.

Ovum also points to claims that the NBN could “increase costs for low-end broadband” which could make cheap wireless broadband even more attractive than it is already, and ends on the NBN issue by saying that “if an integrated operator were to win the NBN tender it may be able to leverage the asset in areas such as backhaul to benefit its mobile broadband network.”

My take on the issue, now further informed and confirmed by Ovum’s analysis?

As long as the wholesale HSPA providers and the ISP retailers don’t get too greedy and do ensure that HSPA rollouts are well provisioned, properly maintained and upgraded with new capacity (as needed), the stunning growth of wireless broadband and its unparalleled convenience over fixed services should continue growing.

Who the heck needs an expensive NBN when HSPA is here today, eHSPA is here in 2009, and LTE is here in 2010 and beyond?

Over to you, Dear Leader – er, I mean, Kevin Rudd. You haven’t delivered diddly squat on your glorious 12Mbps NBN promise yet (aside from embarassing delays and ISP infighting), and with but a couple of years to go before the next election, will it be a Federal Labor Government rolling out any kind of NBN, or a Federal coalition government instead?