Seen by some as sitting on the wrong side of the world, Australia wants to plug deeper into the global economy by turbo-charging its broadband power. The nation is funding an ambitious plan to deliver high-speed Internet to its population of 22 million.
At 36 billion Australian dollars ($36.4 billion), it is the single largest infrastructure investment in the nation’s history.
But the national broadband network — or NBN, as it’s known — has divided opinion on political, economic and technological lines since it was first proposed in 2007.
“Australia is leading the world with its plans. The NBN is the most comprehensive plan anywhere in the world,” said independent telecom analyst Paul Budde, who is also a special advisor to the International Telecommunications Union, a United Nations agency.
Telecommunications analyst with BBY Mark McDonnell disagrees.
“The NBN is one of the worst examples in Australian history of government intervention in an industry to create a highly inefficient system,” McDonnell said. “It’s wastefulness on an unprecedented scale in [the nation’s] history.”
While the plan itself has generated controversy, many agree the country has some catching up to do in terms of Internet access. Australia’s broadband power to date has lagged by international standards, according to the Organization for Economic Co-operation and Development (OECD).
The OECD ranks nations on criteria including coverage, penetration and speed of their broadband offerings.
“Overall, the leading countries are Korea, Japan, Sweden and the Netherlands. The United States would be around the middle. Australia is in the bottom half,” Budde said. “At the United Nations, there is no disagreement that [high-speed broadband] is the way forward,” he said. “The question is how do we do it?”
“The whole world is looking at Australia, and looking to it as a leader in this space. But it has to deliver,” Budde said.
The Australian way
The NBN plan calls for providing fiber-based broadband to 93% of Australian premises, 4% of homes will be serviced by wireless, and 3% by satellite services.
The network will have the capacity to deliver services of up to 1 gigabit, equivalent to 1,000 megabits per second. Budde said all fiber networks have the capacity to reach 1 gigabit, but very few people need such lightning speeds.
“Current average speeds needed for current applications is more like 5 to 10 megabits per second, growing to around 20 megabits per second by 2015, perhaps 50 megabits per second by 2020,” he said.
“Korea’s average would be around 20 megabits per second at the moment,” he said.
Building of Australia’s NBN has begun, with the network expected to be fully rolled-out in just under 10 years.
Spearheading the project is NBN Co., a state-backed enterprise created to build, own and operate the wholesale broadband network.
For the past two years, political debate in Australia has sizzled over the decision to hand control of the NBN to the state, and the financial burden that lumps on the taxpayer.
The opposition parties have consistently criticized the government over the NBN’s A$36 billion price-tag, and the lack of a definitive cost-benefit analysis for the project.
“It’s the absolute epitome of belief in serious, sensible economics that you would want the largest and most complex infrastructure project in Australian government history subjected to a full cost-benefit analysis. And why is the prime minister running away from it?” opposition leader Tony Abbott said last October.
Influential advocacy group the Business Council of Australia supports the need for a cost-benefit analysis, as does analyst Mark McDonnell.
“I’m arguing for commercially driven investment decisions. Fiber-optics provided regardless of underlying demand is profligate and inefficient. There is always scope to improve the network, this isn’t the way to do it,” McDonnell said.
The government argues the analysis would be a waste of time and money.
It points to a A$25 million McKinsey study it commissioned, which found the project was financially viable and would provide a return on investment at affordable prices, as well as a number of global studies which it says prove the economic case for a high-speed broadband network.
Opposition leader “Tony Abbott’s repeated calls to scrap investment in the NBN demonstrate not only his inability to grasp basic economic principles, but a woeful ignorance of the productivity benefits that the NBN will create,” Communications and the Digital Economy Minister Stephen Conroy said last year.
“The NBN will lift Australia to the top of broadband rankings and allow us to compete with countries like Japan, Singapore and Hong Kong,” Conroy said.
Telco analyst Paul Budde argues the economic benefits delivered by this kind of transformative technology are difficult to estimate.
“The average cost (for the roll-out) per home is roughly the same, whether you do it in Australia or America or Sweden,” he said. “How are you going to calculate what the benefits of a broadband network are for e-health, and what that means for saving lives, and saving costs?”
“I’m not against a cost-benefit analysis, but have we done that when we built a freeway, or a water network, a hospital or school? That’s why we have governments. They are in charge of infrastructure,” Budde said.
Technical approach
Complicating the issue of cost is whether the government has made the right bets on technology, and the potential overlap with existing networks, particularly wireless.
“It’s driven by quotas, irrespective of demand, and irrespective of whether fiber is the best technology. The demand for fiber is there in pockets, but not at the level of 93%,” McDonnell said.
Australian telecom major Telstra Corp. (AU:TLS 2.70, +0.04, +1.50%) (TTRAF 2.73, +0.01, +0.37%) announced in February that it would upgrade its mobile-wireless broadband services to fourth generation (4G) this year — the same technology that President Obama plans to deliver to 98% of U.S. homes as part of his own national broadband push — and reignited the tech debate.
“Even though there is significant existing infrastructure and competition in the wireless market, [Communications Minister] Conroy has instead decided to incorporate it into his monolithic government-owned monopoly,” Malcolm Turnbull, the opposition’s shadow communications minister, said last month.
High-speed broadband networks rely on four major technologies: fiber, mobile-wireless broadband, fixed-wireless broadband or Wimax, and satellite.
Australia’s NBN will deploy all of these except fixed-wireless broadband, a composite which Paul Budde believes strikes the correct balance.
“It is using the right mix of technologies. Any engineer in telecommunications will tell you the only way to progress a national broadband network is with fiber-to-the-home. There’s no other technology to deliver the sophisticated services with video in densely populated areas,” Budde said.
Australia is the world’s sixth largest country, but with one of the lowest population densities on the planet.
“Wireless technology is not well suited to densely populated areas. But if you are out in the bush, and there are 100 houses, and they are all 10 kilometers from each other, wireless makes sense,” he said.
The technology ratio used in other builds — be it China, Brazil or Italy — depend on a variety of factors. “It’s complex. You have to look at the local political, economic, geographical situation. There is no silver bullet,” Budde said.
“In 10 years’ time, Western countries will all end up at that end goal, of a national infrastructure which is affordable and which is used in a trans-sector way. It’s just how we get there,” he said
“The whole world is looking at Australia, and looking to it as a leader in this space. But it has to deliver,” Budde said.
---
Autor(en)/Author(s): Virginia Harrison
Quelle/Source: MarketWatch, 24.03.2011
Bitte besuchen Sie/Please visit:
