The report by Phil Harpur, a senior research analyst with the Budde Group, says the market changes will be driven by an acceleration of government policies in relation to broadband infrastructure and the National Digital Economy Strategy.
According to Harpur, these developments will be further accelerated by a range of dependent sectors such as cloud computing, M2M and big data – and, he says, the over-the-top players are also becoming more and more prominent in the telecoms industry and this will “start blurring some of the borders between infrastructure, IT and applications”.
“In its original plan under the previous government, NBN Co, the company overseeing Australia’s national broadband network project, would connect 93% of homes, schools and workplaces to an optical fibre network (fibre-to-the-premises), providing high-speed broadband services in urban and regional towns. The remaining 7% of premises would be connected to an LTE-based fixed wireless network, and for those outside these footprints to a satellite network,” writes Harpur.
“Under the new scheme, FttP will connect 20% of premises by 2020, while a further 38% will be served by FttN — using the VDSL technology — and another 34% of will receive services via existing HFC networks. Using this approach, the government anticipated that 91% of premises connected to fixed-line infrastructure would receive 50Mbps by 2020."
Harpur notes that for the foreseeable future, a significant part of rural areas will have to rely on fixed wireless broadband and, at the same time, “this is an area that has the largest percentage of underserved customers, so there is good reason to give such rollouts priority”.
“With the NBN company finally also looking at bringing fibre deeper into the network (FttC) this will potentially also benefit the development of 5G, depending on mobile operators being able to use the NBN network for that purpose.
“NBN Co expects to be one of first operators outside of the US to commercially launch DOCSIS 3.1 technology as an upgrade path for the HFC network. The DOCSIS 3.1 standard, could vastly increase the speed of that HFC network footprint and at a much lower capital cost than deploying FttP.”
And Harpur makes the point that deployment of FttP in greenfield estates is a fast-growing industry, supported by an updated regulatory regime and pricing models.
“Recent legislation provides the framework for all new major housing sites to be supplied with FttP infrastructure, or to be made ready (pit and pipe) for such deployment. NBN Co has in place measures aimed at improving competition, minimising costs, and providing a level playing field for participants in this sector. Controversially, developers and home owners will be charged for the infrastructure costs in new housing developments.”
Harpur observes that the NBN will become the predominant infrastructure, and as a utilities-based network it will also provide its services to other sectors, such as healthcare, education and business.
“With these sectors involved we will see the industry developing specific new business models around infrastructure, ICT and retail. IPTV and other media and entertainment applications will also begin to play a more important role.”