Friday, 12 October 2018 12:10

NBN gigabit connections will remain mostly a pipe dream Featured

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NBN gigabit connections will remain mostly a pipe dream Courtesy NBN Co

The CVC costs set by the NBN Co make it very difficult for ISPs to offer gigabit connections to more than a select band of customers who are willing to sign up in numbers and pay slightly more than other speed tiers, according to one ISP who caters to this type of consumer.

Damian Ivereigh, chief executive of Launtel, a Launceston-based ISP, said his was probably the only company which would sell a gigabit connection over the NBN at the moment – and only in Tasmania.

"I believe that we are one of the reasons why Tasmania has a higher than average number of FttP upgrades going on, because you can get gigabit here," Ivereigh told iTWire in response to queries.

He was referring to cases where residents join together and share the costs for NBN Co to put fibre-to-the-premises in their street. But it would be of little use doing this, if there were no ISP who could then offer these individuals gigabit connections.

Ivereigh said basically it all came down to economics and, in particular, scale at each point of interconnect.

"You need a certain amount of CVC at each PoI (which costs big bucks – like $8000/month) to turn on your first gigabit connection (much less for subsequent ones)," he said. "We have not yet reached this scale in ACT (the other area we have turned on).

"The big providers could do this. However, I believe they do not offer it because they don't see enough of a market and/or they don't want it to compete with their non-NBN business grade products."

The managing director of another small ISP, MyRepublic, said he had offered gigabit connections during a trial in Wollongong a year ago.

Nicholas Demos told iTWire: "We only allowed customers in Wollongong to sign up to gigabit speeds for a year during a one-month period. We charged what we believe is a fair price for gig speeds, $129.95 per month." He added that he charged $99.95 for gigabit speeds in New Zealand and 20% to 30% of customers were signing up for plans which offered this speed.

"During the one-month trial period in Wollongong, over 100 customers signed up for gigabit speeds and are still experiencing it today," Demos said. "We would love to provide it to all our customers at a fair price, but the current NBN pricing model in Australia does not allow for this."

He said NBN Co and the government "believe that Australians only need the 50-speed tier which is whey they have discounted it, and not the higher speed tiers".

A third small ISP, Aussie Broadband, said through its spokeswoman, "We don't have any plans to offer gigabit plans at this stage. The amount of CVC we need to have sitting around to support them is too costly."

A Vodafone spokesperson said: "We are always reviewing the products our customers are looking for and the 1Gbps speed plan is something we continue to assess."

An Optus spokesperson responded with a query: "Have you spoken with NBN Co as yet? They would be best placed to comment on gigabit connections."

Telstra did not bother to reply.

TPG has no media contacts on its website, hence the email query was sent, in error, to Mark Rafferty who happens to be on the corporate side of things.

He was rather testy and refused to forward the email on to the individual concerned; hence the request for comment to TPG only went in at about 10am. If a response is received, it will be included here.

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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