Australia’s National Broadband Network (NBN) company has killed off its plans to offer a 100/40Mbps fixed-wireless product, with NBN CEO Bill Morrow telling Senate Estimates on Thursday there is no economic case for it.
“We killed it,” Morrow said.
According to the CEO, while expanding capacity on fixed lines is a linear cost, the cost is exponential on fixed-wireless.
“A certain point in time starts to double, starts to quadruple,” he said.
“The idea of adding a 100Mbps service actually means driving even more capacity requirement into the network, and the economics again … this is a cost-leading effort.
“It starts to actually break apart to where it doesn’t make any sense.”
Under questioning of how much it would cost to offer a stable 100Mbps service, without putting a dollar figure on it beyond being in the billion, Morrow said the cost would be outrageous.
“You would be blown away at the cost, it just would never happen,” Morrow said.
“It’s cost-prohibitive … you would not use that technology for that.”
Mirroring comments made in February last year that there was a lack of demand for 1Gbps broadband plans, Morrow said there is a lack of mass-market demand for 100Mbps plans.
“We can look at where we have fibre, we don’t have 20 percent take-up of 100Mbps in fibre. So I would not say there is a mass-market demand for 100Mbps service today,” he said.
“It’s not only the level of demand, but the price that consumers are willing to pay.”
The CEO conceded that although video gamers may see a need for high speeds, as a whole, the market does not want to pay the incremental amount of money to upgrade networks, especially in the realm of fixed-wireless.
Responding to concerns from Labor senators that the abandoning of 100Mbps plans on fixed-wireless amounted to a digital divide, Morrow said one could argue a new divide exists between those on fixed-line, and fixed-wireless and satellite connections.
“I think we have to acknowledge that … the vast land is going to drive economics that will likely mean the regional end users using broadband over this network are likely never to see the kind of bandwidth capability that will be coming to a city centre,” he said.
“You can already see it today, we have over 40 percent of the fixed-line network that can offer 1Gbps speeds, you don’t see that in the regional areas, and I can’t imagine a time frame where that necessarily will be available to all of those people in the regional areas.
“Regional Australia had near nothing with broadband access … the divide has actually closed because this is a universal access of everybody having at least 25Mbps.”
The company responsible for rolling out the NBN across Australia announced its was looking to launch improved fixed-wireless speeds in March last year.
At the time, the company was aiming to be able to sell the product in the first part of 2018.
“This is just one more example of NBN’s flexibility to introduce technology advancements without slowing down the rollout,” Morrow said at the time.
“It fits neatly into the upgrade path for fixed wireless and ensures we meet our commitment to provide a network for the future, regardless of technology.”
In February, Morrow told ZDNet during the company’s first-half FY18 financial results call that NBN is looking into what fixed-wireless products could be offered with a 100Mbps service that would not jeopardise peak evening speeds.
“We know that the radio technology and the antenna technology that we have can support 100Mbps on fixed-wireless — and that’s with the 4G protocol, that’s even pre-5G. But the issue quite frankly is how would that be used because of the spectrum limitations, because of the nature of fixed-wireless in itself, when it comes to the peak period of the day, there is going to be a different experience people get, and to stay at that 100 megabits per second would be unlikely in the evening hours,” Morrow told ZDNet.
The CEO said 100Mbps fixed-wireless could be offered to consumers “as long as it’s clear that it is more out of busy time sort of speeds that they would be observing”.
Due to the increased use of video streaming, NBN is seeing less evening spikes in peak hours, and more sustained continuous use.
“Fixed-wireless technologies are going to be the ones that are going to be most challenged by that; it really requires a whole different redesign than the classic approach to wireless,” Morrow added.
Later in February, Australian communications equipment company NetComm Wireless announced the launch of a 1Gbps-capable 4G fixed-wireless outdoor device.
NBN’s fixed-wireless network is slated to connect 600,000 premises in regional areas across Australia.
Morrow, who is due to leave NBN by the end of the year, said he had given a commitment to the board to remain until December 31.
Optus has been forced by the Federal Court to pay AU$1.5 million in penalties after misleading its customers about switching over to NBN’s HFC network.
The NBN Business Satellite Service will make use of existing Sky Muster spectrum and infrastructure, with trials to take place at the end of this year ahead of service launch in the first half of 2019.
NBN is implementing two new HFC optimisation works from the pit to the exchange and from the pit to the home.
Using machine learning and big data analytics, NBN is able to be ‘proactive’ rather than reactive in repairing network issues across modem and cable before the end user even notices, the company has said.
NBN has reported Q3 EBITDA of negative AU$389 million on revenue of AU$521 million, with 3.7 million end users.
Government-owned broadband wholesaler needs to have 65,000 services moved to decommission early points of interconnect.
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