Wednesday, 12 August 2015 07:48

Turnbull responds to MyRepublic Featured

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The head of Singaporean broadband supplier MyRepublic got a lot of publicity yesterday criticising the NBN. Communications Minister Malcolm Turnbull was not impressed.

MyRepublic CEO and founder Malcolm Rodrigues was quioted in the Fairfax Media as saying the NBN is a 'shit network'.

MyRepublic is planning to enter the Australian market in 2016, reselling NBN fibre. Rodrigues said that his company will advertise a 100 Mbps network to everybody, but if people with fibre-to-the-node (FTTN) attempted to subscribe, he would turn them away and tell them it was the Australian Government’s fault they could get those speeds.

Turnbull has taken to his blog to defend his ‘multi technology mix’ NBN. “One of the key points about the NBN is that it is designed to allow entrepreneurs like Mr Rodrigues to shake-up the market,” says Turnbull.

“It is a good sign that RSPs (retail service providers) are looking to break into the market, to challenge the business models of the incumbents and give consumers more choice. And insofar as Mr Rodrigues is trying to stimulate more demand for higher-end products, that too is a good thing. We need more people buying more products on the NBN. It is, after all, a business and we need the money.

“But while I understand the need for Mr Rodrigues to generate some publicity as he seeks to get a foothold in the Australian market, it’s worth putting some of his comments into perspective.”

Turnbull then turns on those comments of Rodrigues’ that were most widely reported: ”On FTTN we'll market 100 Mbps and when people come over we'll say 'sorry, thank your government [because] you're on a shit network and the most you can get is 20-30 Mbps, but we will continue to lobby your government to turn it into a fibre-to-the-home one and as soon as you get there we'll get you a free upgrade to fibre.”

Turnbull makes two points. “Firstly, the NBN’s speed qualification tools mean NBN won’t be selling 100 Mbps services to customers who can’t get those speeds. The NBN is hardly the only company in the world rolling out a multi-technology mix. In Germany, Deutsche Telekom has recently announced an expansion of its fibre-to-the-node network, to cover 80 per cent of its fixed line footprint by 2018, while there have also been mass deployments by BT Openreach in the U.K., AT&T in the US and many others.

“Second is the point that MyRepublic will lobby for a ‘free upgrade’ to fibre. At first when I read the article, I had assumed Mr Rodrigues would be funding the upgrade to FTTP and not seeking to recover the costs, but on second reading I realised he meant the upgrade would be ‘free’ because the Government would be paying for it.”

Turnbull points out that Singapore is a very different market to Australia’s. “Passing each premises with superfast broadband costs a small fraction of what it costs in Australia, as a 2013 study by Analysys Mason shows“If RSPs do not have to invest in the network, well then that investment is ‘free’ of any direct contribution from the RSPs. But it is certainly not true from a customer’s or taxpayer’s point of view. Either the customer will pay more or the taxpayer will have to shoulder the cost of an even larger subsidy.

“The NBN is a business,” Turnbull repeats. “The Strategic Review found that going to a full FTTP model would increase internet bills by up to 80% (which is up to $43 a month for users on an average 50/20 Mbps product).

Turnbull also takes Rodrigues to task on his comments on the time taken to deploy FTTP. Rodrigues essentially said that Australia would be better off taking 20 years to do FTTP than ten years to do a the multi technology mix rollout.

“When the Government measured Australians’ access to broadband, and the quality of their connections, the Vertigan report revealed there were up to 1.6 million premises which had either no broadband or very poor broadband connectivity, with peak median download speeds of less than 4.8 Mbps. The study found that the MTM rollout had a net benefit of $17.9 billion compared to the net benefit of an all FTTP rollout of just $1.8 billion.

Just as importantly, were the Government to take his advice, it would mean that many Australians with no or very poor broadband will not get an upgrade to superfast speeds within the next few years but rather would have to wait, as he recommends, for another decade. When his company has spent a little more time in this market, he will find out how little appeal his twenty year timetable would have to Australians.”


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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire. He is one of Australia’s longest serving and most experienced IT journalists. He is author of the only definitive history of the Australian IT industry, ‘A Vision Splendid: The History of Australian Computing.’

He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time weekly IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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