Comms tech pulls down Australia’s digital competitiveness ranking

Australia’s communications technology profile has been flagged as a key contributing factor to the country’s slide in the latest international digital competitiveness rankings collated by Switzerland’s IMD World Competitiveness Center.

Australia slipped one place to 14 in the 2019 IMD World Digital Competitiveness ranking, which assesses the digital competitiveness of 63 nations. Australia’s ranking in 2018 came in at 13, while in 2015, the country was ranked ninth overall.

Key weaknesses contributing to Australia’s ranking fall included business agility, technology skills and communications technology, according to the Committee for Economic Development of Australia (CEDA), which is the Australian partner of the IMD World Competitive Center.

The ranking system rates national performance in three areas: knowledge, technology and future readiness, with further sub-factors considered under each of these elements, including communications technology and internet bandwidth speed.

CEDA CEO Melinda Cilento said that in the technology area, Australia’s communications technology subcategory ranking remained poor, at 54. Australia’s internet bandwidth speed subcategory ranking in the latest report, meanwhile, was 38.

Cilento suggested the results showed Australia had more work to do if it is to keep pace with other economies.

“The results highlight that we need a broader national community discussion around the importance of R&D, investment in technology, and tech skills and how the benefits of these flow back to the community,” she said.

By contrast, New Zealand’s communications technology subcategory ranking came in at 27, although the country’s overall digital competitiveness ranking was 18, one up from the previous year’s ranking, but four places lower than its ranking in 2017. In terms of internet bandwidth speed, New Zealand outstripped Australia, coming in at number 20.

According to Cilento, another area of concern for Australia is the development of tech skills.

“While the Australian community has an appetite for new technology with a high uptake of smartphones and tablets, ranking ninth and third respectively, we don’t rank well in terms of higher technical skills,” Cilento said. “Australia ranked 44 on digital/technological skills and employee training, and 53 on graduates in sciences.”

There were some bright spots for Australia too, according to Cilento, who highlighted factors such as flow of international students, country credit rating, tablet possession and e-government – all areas where Australia was ranked among the top five countries globally.

Globally, the top five ranking countries in the 2019 IMD World Digital Competitiveness ranking were United States, in the number one spot, followed by Singapore, Sweden, Denmark, and Switzerland. These remained unchanged from the previous year’s ranking.

NBN service quality complaints on the rise

Complaints about service quality, connections and migrations involving Australia’s National Broadband Network (NBN) rose in the first six months of 2019, despite complaints relating to the country’s broader telecommunications services falling overall during the year ending June.

This is according to the latest figures by the Telecommunications Industry Ombudsman (TIO). The TIO’s annual report for the financial year ending June 2019, released on 25 September, paints a picture of increasing complexity among the issues Australians are complaining about when it comes to their telecommunications services.

“Complaints about phone and internet services in Australia have continued their downward trend, and this is good news for consumers and the telecommunications industry, but this is only one part of the story,” said Ombudsman Judi Jones. “The volume of complaints coming back to us unresolved shows an emerging picture of complexity in technical and small business issues.

“Some measures we have taken to address this are the formation of specialist teams to handle these escalated complaints, and working closely with the phone and internet providers to better understand the barriers to resolving these issues,” she said.

According to the TIO, the 12 months from July 2018 to June 2019 saw 47 per cent of escalated complaints closed within 60 days, compared to 77 percent in FY2017-18.

The top five complaint issues about internet services were no action or delayed action by a service provider, with 13,976 complaints, service and equipment fees (13,509 complaints), slow data speed (8,668 complaints), intermittent service/dropouts (7,915) and delay establishing a service (7,431).

At the same time, the top five complaint issues about mobile services were service and equipment fees, with 12,905 complaints, no or delayed action by provider (11,675 complaints), resolution agreed but not met (4,263), misleading conduct when making a contract (3,656) and termination fees (2,975).

Altogether, the TIO received 132,387 complaints throughout the year, representing a year-on-year fall of 21 percent. However, for the first time, complaints relating to internet services exceeded those of mobile services, with 43,164 complaints – or 32.6 percent – and 40,103 complaints, respectively.

Complaints relating to services delivered via the NBN comprised a large portion of the total regarding internet services. According to the report, 23,362 complaints were recorded in FY2018-19 about service quality on the NBN. Complaints increased from 2.1 per 1,000 premises on the network in the first half of the year to 2.5 per 1,000 in the second half of the year.

Services delivered over the NBN were the subject of 48.2 percent of complaints about service quality during the 12-month period. By comparison, 40.4 percent of such complaints revolved around services delivered via other networks. Mobile networks accounted for 11.3 percent of complaints of this nature.

Meanwhile, 11,635 complaints were recorded in FY2018-19 about changing providers or establishing a connection to the NBN. Complaints increased from 6.7 per 1,000 premises added in the first half of the year, to 8.6 in the second half of the 12-month period.

Indeed, 56.4 percent of all complaints relating to connection and changing providers were about services delivered over the NBN. However, this comes as little surprise, given that, as the national broadband wholesaler draws closer to the completion of its rollout, more end consumers are being connected to the network.

“With transition to the NBN, providers offered a range of new products and services. As a result, we saw a new range of complaints and enquiries from consumers navigating the changed environment. The increase in complaints about internet services is one example of this,” the TIO report stated.

By comparison, such complaints involving services delivered via other networks accounted for 30.6 percent of the total, while mobile network services were at the centre of 13 percent of complaints about connection or changing providers.

Unsurprisingly, the country’s largest telecommunications player, Telstra, claimed the lion’s share of complaints, accounting for roughly 50.2 percent, although it should be noted that the company enjoyed a 19.5 percent fall in complaints from the previous year’s tally of 82,528.

Optus, as the country’s second largest telco, came in second, with 23.9 percent of the total. Like Telstra, Optus saw a fall in complaints against its name, enjoying a 22.2 decrease, year-on-year. Optus was followed by Vodafone, iiNet and TPG Internet, with 5.1 percent of the total, 4.3 percent and 4.1 percent, respectively. All experienced a year-on-year decrease.

“We are pleased to see that complaints decreased in every state, and for all of the providers listed in the report,” said John Stanton, CEO of telecommunications industry body, the Communications Alliance.

“There has been significant work over the past two years by Industry to improve the customer experience, including – but certainly not limited to – NBN Co and RSPs [retail service providers] achieving better communication and coordination for consumers and businesses as they migrate services to NBN-based networks,” he said.

Equinix boosts Oracle play with multi-region cloud connectivity expansion

Equinix has ramped up its collaboration with Oracle, expanding its private and secure connectivity to Oracle Cloud Infrastructure in dozens of metropolitan areas around the world, including Sydney, Melbourne, Perth and Hong Kong.

According to the interconnection and data centre provider, its recent expansions in Sydney, São Paulo, Tokyo, Toronto and Zurich now offer customers in those regions private connectivity to Oracle Cloud Infrastructure FastConnect via Equinix Cloud Exchange (ECX) Fabric.

An on-demand, software defined network (SDN)-enabled interconnection service, ECX Fabric is designed to help customers connect to Oracle Cloud Infrastructure FastConnect, and other clouds and network providers located around the world.

“Our expansion in Sydney demonstrates our commitment to helping businesses in Australia further their digital transformation journeys and we are thrilled to offer our customers with a presence in our local facilities access to the Oracle Cloud via our ECX Fabric,” said Glenn Uidam, senior director of operations at Equinix Australia.

Equinix claims that the recent expansions now sees it offer more private connections to Oracle Cloud Infrastructure FastConnect than any other data centre player in the market, with connectivity via ECX Fabric available in 34 metro areas globally.

These include seven metro areas in the Asia Pacific region, Sydney, Melbourne, Perth, Hong Kong, Osaka, Singapore and Tokyo; 14 areas in North America; and 13 across Europe.

For Robert Blackburn, global managing director, Oracle strategic alliance, Equinix, this expansion of the long-running partnership between Oracle and Equinix meets a growing need in the market.

“As companies around the world are prioritising digital transformation as a way to gain a competitive advantage, we’re seeing increased customer demand to migrate Oracle workloads to Oracle Cloud,” Blackburn said. “The reality is that companies that are adopting digital transformation are thriving, and those that are not are being left behind.

“With this direct access, our mutual customers can create a high-speed, low-latency connection that allows them to fully realise the benefits of their Oracle deployment. We are excited to deepen our collaboration with Oracle and offer this service in these new metros across the globe,” he said.

NBN Co stands by CVC charges amid wholesale pricing overhaul

NBN Co has proposed a series of wholesale discounts and higher capacity inclusions across its products as part of its latest industry consultation round, but refuses to bow to telco pressure to drop its controversial connectivity virtual circuit (CVC) charge. 

The company behind the country’s National Broadband Network (NBN) released the second paper of its wholesale pricing review consultation with industry on 17 September, following twelve weeks of consultation with more than 50 NBN retail service providers (RSPs) and industry groups.

Among the big changes proposed by the network builder are wholesale discounts and higher capacity inclusions across its high-speed tiers. These include a 100/20 bundle discount starting with 3.75Mbps of included capacity at an effective charge of A$58 per month, as flagged at the beginning of the consultation process in June.

Additionally, the changes would include a 250/25 bundle discount starting with 4.75 Mbps of included capacity at an effective charge of A$68 per month, and an up to 1000/50 bundle discount starting with 5.75Mbps of included capacity at an effective charge of A$80 per month.

It should be noted that the 100/20Mbps Access Virtual Circuit (AVC) Traffic Class 4 (TC-4) proposal is being considered across all fixed line footprints, with ranged peak information rates (PIRs) being provided for the fibre-to-the-basement (FttB), fibre-to-the-curb (FttC) and fibre-to-the-node (FttN) network services.

The 250/25Mbps and the 1Gbps/50Mbps proposals are being considered for NBN Co’s fibre-to-the-premises (FttP) and hybrid fibre coaxial (HFC) footprints, while the feasibility of offering these tiers in the (FTTC) footprint is still being investigated.

According to NBN Co, the new 100/20 bundle discount is around 11 percent cheaper than the A$65 effective charge for the 100/40 bundle discount and the increase in CVC inclusion improves the total value by 20 percent. At the same time, the new 250/25 bundle discount is 32 percent cheaper than the A$100 effective charge for the 250/100 bundle discount.

The new up to 1000/50 bundle discount, meanwhile, 55 per cent cheaper than the previous A$180 effective charge for the 1000/400 bundle discount. Additionally, an almost doubling of the CVC inclusion to 5.75Mbps improves the total value by almost 68 per cent. 

For Ken Wallis, NBN Co general manager, commercial, these new high-speed tier offerings represent the biggest changes in NBN Co’s latest wholesale pricing proposals.

“We brought down the price, created the new 100/20 to 250/25 and the new up to 1Gbps/50Mbps so that they are at a much lower cost for RSPs to upsell,” Wallis told Telecom Times. “I feel this is the really big change here, and really opens up some greater opportunities for customers, as well as RSPs, in terms of their business cases as well.”

At the other end of the spectrum, NBN Co is planning to introduce a modified 12/1 Entry Level Bundle (mELB) discount on 1 October 2019.

Although the starting effective wholesale charge of A$22.50 and inclusion of 150Kbps (0.15Mbps) remains unchanged for voice only customers and those who use limited data, the additional charge that is applied when the average monthly peak usage across relevant services exceeds the included 150Kbps will be reduced from A$22.50 to A$5.70. 

This additional charge is proposed to be further reduced to A$4.90 in May 2020 and to A$4.10 in October 2020. There will also be the option of an additional CVC charge of A$8/Mbps to accommodate higher data users.

NBN Co is also proposing changes to its mid-tier offering. In an effort to deliver a more economically attractive 25/5 bundle discount to RSPs, the company is proposing to reduce the wholesale effective charge from A$45 (including 2Mbps of CVC) that exists today to A$37 (including 1.25Mbps of CVC) in November 2019, and to increase this capacity allocation to 1.5Mbps in May 2021.

Given that, according to NBN Co, 65 percent of end customers are currently subscribed to the 50/20 wholesale speed tier, the company is proposing to help RSPs improve their service experience by adding extra CVC inclusion to the ($45) 50/20 wholesale bundle discount, increasing from a CVC inclusion of 2Mbps today to 2.25Mbps in May 2020, 2.5Mbps in May 2021.

While NBN Co’s Pricing Review 2019 Consultation Paper 2 appears to have allowed for a series of discounts and other changes to appease the country’s telcos, the company has reiterated its commitment to retain its CVC charge model, despite ongoing criticism by a number of RSPs, most notably Telstra, NBN Co’s biggest retailer.

image (1)“While we know that some RSPs have called for the removal of CVC charges, the reality is that there is a real cost in provisioning and dimensioning the network to accommodate rising data consumption.,” said NBN Co chief customer officer, residential Brad Whitcomb.

“We believe our bundled charges are the fairest way to implement a user-pays approach to wholesale pricing at this time.”

As such, according to Whitcomb, NBN Co believes the higher CVC inclusions proposed in the paper strike the right balance between helping RSPs to develop affordable offerings for end customers, giving service providers a platform where they can compete, while also allowing NBN Co to generate a “fair and reasonable return” to invest back into the network.

However, in an effort to provide RSPs with additional certainty around CVC, NBN Co’s proposals see an increase in CVC across most wholesale bundles discounts and, for the first time, the company will begin publishing a rolling two-year roadmap of future pricing with incremental annual increases in capacity inclusions on most bundle discounts to meet customers’ growing data demand.

“This roadmap is an important step in showing service providers that we are listening and taking decisive action to provide greater certainty to the industry,” Whitcomb said.

NBN Co has also taken the prospect of differential pricing for video streaming, dubbed a ‘Netflix tax’ by some pundits, off the table. According to the company, the majority of respondents in the first round of consultation highlighted streaming video as an important application driving the need for higher download speeds and more data inclusions.

While the company investigated the possibility of lowering the price of video traffic by differentiating video traffic flows during the initial consultation, only two RSPs supported the proposed initiative, leaving NBN Co to instead focus on ways to meet the challenge of growing video traffic by increasing CVC inclusions and making higher speeds more affordable. 

Going forward, the network builder expects to conduct annual, industry-based consultations to review and refine bundle discounts and inclusions. For now, the company is calling on further feedback from RSPs on the proposals in the consultation paper.

The final outcomes of the wholesale pricing consultation are expected to be announced in November 2019.

BVivid coughs up A$25K over NBN cold-call tactics

Telecommunications provider BVivid has been hit by more than A$25,000 in penalties for making telemarketing calls that “likely misled” consumers transitioning to the National Broadband Network (NBN).

BVivid provides a number of telecommunications services to Australian businesses and individual consumers, including fixed phone, ADSL and NBN services.

According to the Australian Competition and Consumer Commission (ACCC), BVivid cold-called consumers from October 2017 to at least May 2018 and told them that their internet services would be disconnected or that they would lose their telephone number if they did not move to the NBN immediately.

The ACCC said that the company, through a wholly-owned subsidiary in India, employed staff in India to promote its services by unsolicited telephone marketing to prospective consumers in Australia.

In some cases, the representations made by the telemarketers prompted customers to transfer from their current telecommunications services provider to BVivid without understanding the full nature of the NBN migration process or the services they were signing up to.

“BVivid’s calls likely misled consumers and gave them a false sense of urgency and need,” said ACCC Commissioner Sarah Court. “Consumers generally have 18 months from when the NBN becomes available in their area to switch before being at risk of disconnection.”

After being issued with two infringement notices by the ACCC over the cold-calling conduct, the company has paid A$25,200 in penalties and has admitted to likely breached the Australian Consumer Law (ACL).

BVivid has also admitted that it likely breached the unsolicited consumer agreement protections in the ACL after providing services within the cooling-off period while failing to give customers a form they could use to terminate the contract.

“We are of the view that BVivid did not meet all their obligations to consumers who were subjected to their unsolicited marketing practices,” Court said.

“Consumers who find themselves signed up to a contract as a result of unsolicited marketing can cancel their contract without penalty within 10 business days of signing without needing to provide a reason,” she said.

According to the ACCC, the court enforceable undertaking it has accepted from BVivid in response to the action will also see the telco provide redress for customers affected by its conduct by allowing them to terminate their contract without penalty.

The undertaking will also see BVivid commission an independent review of all of its policies, practices and procedures relating to its sales and transfer methodology to ensure compliance with the ACL, among other measures.

Aussie telcos ordered to keep blocking sites hosting Christchurch terror footage

The federal government has ordered Australia’s largest internet service providers (ISPs) to keep blocking eight websites hosting footage of the terrorist attacks last March in Christchurch, New Zealand along with the manifesto of the alleged gunman.

The direction, issued by the office of the government’s eSafety Commissioner on 9 September, compels ISPs to implement a six month block, during which time the eSafety Commissioner will review and remove sites from the list if and when the offending content is taken down.

The action comes several months after the country’s major telcos, including Optus, Telstra and Vodafone, independently moved to block more than 40 websites that were hosting video of the attacks or the manifesto of the alleged perpetrator in the days immediately following the Christchurch attacks.

The ISPs, as members of a task force subsequently set up by Prime Minister Scott Morrison and tasked with looking into terror and violent online content, pressed the Government to provide some direction, given that the ISPs did not have a clear legal footing for the action they had taken independently.

As such, the new direction, the first of its kind exercised by the eSafety Commissioner, is expected to offer ISPs certainty to continue their blocking activities, while also clearing the way for ISPs to remove the blocks they had voluntarily placed on other websites that have since taken down the material.

“Australian internet service providers acted quickly and responsibly in the wake of the terrorist attacks in Christchurch in March this year to block websites that were hosting this harmful material,” said Paul Fletcher, Minister for Communications, Cyber Safety and the Arts.

“ISPs called on the Government to provide them with certainty and clarity in taking the action they did, and today, we are providing that certainty,” he said.

The eSafety Commissioner Julie Inman Grant, meanwhile, has consulted with both ISPs and website administrators, giving the websites in question “ample opportunity” to remove the content.

“Those hosting this material do so in the full knowledge that Australia will take action to halt its continued proliferation,” Inman Grant said. “The remaining rogue websites need only to remove the illegal content to have the block against them lifted.”

According to John Stanton, CEO of telecommunications industry body Communications Alliance, the direction has been welcomed by the country’s ISPs.

“Industry recognised that this was the right thing to do, without explicit Government direction, and we are pleased to see the framework that is now in place as a result of constructive collaboration between industry, government and its agencies,” he said.

The eSafety Commissioner is continuing to work with industry to develop an additional protocol to govern the rapid removal of terrorist and extreme violent material in a crisis event which, according to Inman, is expected to be undertaken infrequently.

“The decision to block websites will be taken only under extraordinary circumstances and will need to meet an extremely high threshold,” said Inman Grant.

Aborted mobile rollout leaves A$237m dent in TPG financials

TPG Telecom’s (ASX:TPM) aborted mobile network rollout plans have hit the telecommunications provider’s finances for the year to the tune of A$236.8 million.

The publicly-listed telco halted its mobile network rollout in January after the Australian Government banned the use of equipment made by Chinese telecommunications manufacturer Huawei – slated to be a key equipment supplier for the network – in Australian 5G networks.

In its preliminary financial report for the year ending July 2019, published on 5 September, TPG told shareholders that its decision to halt the rollout of its mobile network result in an impairment expense of $A236.8 million.

The scrapped rollout also led to an increase in amortisaton and interest expense related to mobile spectrum licences it bought to enable its mobile play, the company said.

The company’s results were also impacted by A$9 million in one-off transaction costs associated with its planned merger with Vodafone Hutchison Australia, which has been put on ice by the Australian competition watchdog.

On 30 August last year, TPG and Vodafone Hutchison Australia entered into an agreement to merge their two businesses and establish a combined entity that would boast both TPG’s fixed line infrastructure and Vodafone Australia’s mobile network.

However, the move was opposed by the Australian Competition and Consumer Commission (ACCC). TPG and Vodafone Australia subsequently launched legal proceedings in the Federal Court in a bid to have the decision reversed.

The case is set to be heard in the Federal Court from 10 September and wrap up within three weeks of that date. If the Court sides with TPG and Vodafone Australia, and the merger does eventually go ahead, the merged group will be listed on the Australian Securities Exchange (ASX) and renamed TPG Telecom Limited.

These factors, among others, contributed to a 56 percent tumble in TPG’s profit for the year, to A$175 million. The company’s preliminary reported earnings before interest, tax, depreciation and amortisation (EBITDA), meanwhile, came to $572.6 million, well short of the $A826.7 million it notched up the prior year.

However, TPG saw only a relatively minor 0.7 percent drop in revenue during the period, to nearly A$2.5 billion, although the company said that EBITDA continued to be adversely impacted by the loss of margin as DSL and home phone customers migrate to low margin National Broadband Network (NBN) services.

The effects of the NBN rollout are set to be felt for at least another year, with TPG telling shareholders that its 2020 financial year is expected to be the year that suffers the greatest impact from customer migration to the NBN. Indeed, the combined impact from residential DSL and home phone customers migrating to the NBN is expected to be around $85 million for the group.

TPG said that the annualisation of the deterioration of profitability of existing NBN customers experienced in the second half of the company’s 2019 financial year as a result of increased NBN wholesale cost per user is forecast to create a further NBN headwind for FY20 of approximately A$25 million.

It is anticipated that, by the end of FY20, TPG will have less than 15 percent of its residential broadband customer base remaining on ADSL, as more customers migrate to the NBN.

“Operating cost efficiency programs across the Group are expected to continue to deliver savings and another of growth is forecast for the Group’s Corporate Division but, in this peak year of NBN headwinds, organic growth for FY20 is not expected to be sufficient to offset the headwinds,” the company told shareholders.