NBN Co claims doubling of average Australian broadband download speed since 2014

A new report by economic analytics firm AlphaBet which NBN Co says offers a more accurate reading of a nation’s broadband speed ranking, has found that the average Australian broadband download speed has more than doubled over the last five years as the national broadband network rollout picked up pace.

During his keynote address at Informa Tech’s Broadband World Forum in Amsterdam, NBN Co CEO Stephen Rue lambasted some online ranking tools, including that of Ookla, which had previously ranked Australia below Thailand, Panama, Paraguay, “where almost half of households in those countries don’t have access to broadband.”

Rue said AlphaBeta – to which the national network builder “has turned” for a more accurate reading of a nation’s broadband speed ranking – had developed its own ranking system taking into account key factors such as availability, population, and geography. 

jj“This model differs from on-line tests in two fundamental ways,” he said. “First, this model uses government validated, subscription speed data, as well as data from the OECD to consistently represent broadband availability to all broadband users within each country – and so just accounting for particular speed-test website.”

“And second, it accounts for the vast differences in broadband availability across countries,” said Rue, adding that by these measures AlphaBeta found the average Australian broadband download speed had increased from 16 megabits per second in 2014 to 37 megabytes per second in 2019.

Rue said by taking these factors of speed and availability into account, Australia’s average broadband speed actually ranked 17th out of 37 major economies. “We’re ahead of comparable nations such as Germany, France, and China, and a far cry from Ookla’s suggested world ranking of 59th,” he added.

Rue told Telecom Times on the sidelines of the #bbwf summit that any credible comparison methodology would consider the percentage of the population that actually has access to that network.

“I think that when you do that, that’s important to put countries in context with each other – comparing countries of a particular size is important as well. So that we can actually see what you’ve created, and how that network stands up against international comparison,” he said.

“Importantly, the research forecasts that Australia will continue to climb these ranks, and after completion of the NBN rollout, when more than 50 percent of our network will be capable of delivering gigabit speeds, Australia’s rank could rise to 13th amongst comparable countries,” Rue continued.

In addition to the vexed issue of average broadband speed rankings, Rue also touched on NBN Co’s brief in terms of the network’s accessibility and affordability. “This role that NBN plays in helping to uphold the nation’s social contract that no matter where you live, you’re entitled to access critical services, have job opportunities, and connect with loved ones is a commitment that we’re proud of and we take very seriously'” he said.

“I believe accessibility is a crucial factor in determining the success or otherwise of broadband networks. And key to providing accessibility, is affordability, because if consumers cannot afford, or are unwilling to pay for highspeed broadband, then nations will miss out on the benefits of rolling out this critical infrastructure,” Rue said.

He added that in Australia there had been a clear correlation between the rollout of the network and the cost of telecommunication services declining in real terms.

“Earlier this year we commissioned AlphaBeta again for another piece of research to compare retail pricing, in real terms, and found that in that study of 4,600 broadband plans across 22 countries, Australia was the 7th most affordable market,” he said.

According to Rue, that report also found that since 2000, while Australia’s cost of living increased by 63%, telecommunication prices fell by 6%.

“We’ve seen a steep fall in telecommunication prices, particularly in the last five years since the rollout of NBN gathered pace, and compared against the 224% increase in electricity prices, and 134% percent increase in the price of healthcare,” he said.

Rue said that the approach he favoured would ideally combine the needs of the individuals with the needs of the nation. “To meet those needs, you need to strike a balance between speed, access, and affordability. We passionately care about achieving this balance, because better access to affordable, high-speed broadband, is what powers the benefits that NBN can deliver to each individual, each business, each industry, in Australia.”

Rue said in NBN connected areas, the rate of growth in digital economy jobs is outpacing the national average by a factor of five, and that the number of self-employed women in these regions had been growing at a rate of 20 times faster than the NBN non-connected areas.

“In fact, it’s estimated that there could be up to 93,000 additional self-employed people by 2021, thanks to NBN,” he said, adding “NBN is also helping to grow more businesses, estimated at up to 80,000 more businessesby 2021.”

“It’s helping a new generation of entrepreneurs launch new services and new businesses. And in terms of fulfilling a promise made when NBN was first introduced, I’m pleased to say that we provide specific products and services offerings for businesses of all sizes, from your start-up to your enterprise business,’ Rue said.

Rue said this was already delivering economic and community benefits in terms of increasing choice and competition in the market, as well as ensuring that business customers get the support they need to run and to grow. “This is essential as we’re assisting those who choose to start their own business to create jobs, which is the backbone of our economy.”

TRue said these socio-economic benefits were set to increase in coming decades as the full potential of a completed NBN is unleashed on our nation.

“Although we know too well the challenges of rolling out universal highspeed connectivity to a nation, we also know that the socio-economic returns it enables are worth it.

 

Richard van der Draay was in Amsterdam as a guest of Informa Tech

NBN Co stretches break-even point to 2023

NBN Co has revealed that it does not expect to find itself in a cash flow positive state until at least Financial Year 2023, a year later than the National Broadband Network (NBN) builder’s previous estimates released last year.

According to NBN Co’s latest annual corporate plan, which outlines the company’s long-range plans, projections and estimates from 2020 to 2023, the national network builder expects to see about A$700 million in positive cash flow in FY23.

At the same time, NBN Co’s latest estimates forecast negative cash flows of roughly A$200 million in FY22. This stands in stark contrast with the company’s Corporate Plan 2019-22, released in 2018, which forecast positive cash flows of around A$100 million in FY22.

One of the reasons for the new break-even point comes down to a reduction in activation figures in FY20, FY21 and FY22. Indeed, the latest report’s expected activation tally in FY23 stands at 8.6 million, which is 100,000 less than the expected 8.7 million in FY22 that was estimated in the 2019-22 corporate plan last year.

In FY20, the company now anticipates 500,000 fewer activations than it expected in the 2019-22 corporate plan, reducing its target from 7.5 million total activations to 7.0 million premises that year.

“Given the complexity of build expected through FY20, there has been a shift in phasing  for activations in FY20 and through FY21. The Company expects to connect 8.1 million customers by 30 June 2021,” the latest corporate plan stated.

NBN Co said in its report that this reduction is “purely a timing issue” around deployment and activations, with the Ready to Connect footprint coming later during FY20 than originally forecast in the previous year’s plan. The company added that there is no expected material change to the underlying performance of the business and revenue is forecast to recover to expected levels in subsequent years.

Another contributing factor for the delayed break-even point for the network builder is an increase in expected capital expenditure (capex) in FY20, FY21 and FY22, compared to the previous year’s figures. For example, NBN Co’s latest report puts expected capex in FY20 at A$4.3 billion. In last year’s report, the figure for FY20 was closer to A$3.6 billion.

These changes, of course, are reflected in the company’s all-important average revenue per user (ARPU) figures which, in the latest plan, indicate it expects to see residential ARPU rise from A$44 in FY19 to A$49 in FY23.

download (5)In last year’s plan, the company put its ARPU expectation at A$51 by FY22 – a figure that included business customers as well as residential customers. The decision to take the business contingent out of the ARPU equation in this year’s report was, according to NBN Co CEO Stephen Rue, to provide a more meaningful and transparent number.

The change in ARPU expectations is reflected in the company’s latest total revenue estimates, which are forecast to reach A$5.9 billion in FY23. While the total revenue figure for FY22 remains unchanged from last year’s estimates, the expected A$5.2 billion in FY21 and A$3.9 billion in FY20 have been downgraded in the latest plan to A$4.9 billion and A$3.7 billion, respectively.

Revenue is forecast to grow from A$2.8 billion in FY19 to A$3.7 billion in FY20 with the expected delay – or “rephasing” as NBN Co puts it – in network activations. Meanwhile, the plan continues to support a peak funding forecast of A$51 billion.

Despite tacking on an additional year until it expects to see positive cash flow and the reduction of anticipated activations in FY20, NBN Co remains upbeat about the rollout and ultimately meeting its stated goals.

In its report, NBN Co said that by the end of FY20, 11.5 million homes and businesses will be on track to be able to order a service on the network, fulfilling the commitment to complete the build in 2020. Currently, around 86 percent of premises throughout Australia are able to order an NBN service.

“To date, NBN Co and its delivery partners have rolled out more than 280,000 kilometres of fibre-optic cable, repurposed and upgraded existing HFC [Hybrid Fibre-Coaxial] and copper technologies, built a Fixed Wireless network comprising some 2,200 towers and approximately 13,000 cells, and launched two satellites,” said Rue.

“With completion of the network well in sight, now is the time to focus on how Australians in homes and businesses across the nation can get the most out of the NBN access network.

“Improving customer experience and satisfaction will remain the key driver in coming years as we complete the transition to become a full-scale service delivery organisation – and we will put customers at the centre of everything we do.” he said.

NBN Co ups wholesale data allowances, bush connectivity with new satellite broadband offer

Rural and regional Australians on NBN Co’s Sky Muster satellite service are set for a broadband data boost, with NBN Co today announcing new plans that will no longer count the use of essential internet services – including email, general web browsing and critical software updates – towards monthly data allowances.

“Our team is also continuing to consult with industry on a number of additional wholesale product updates on the Sky Muster satellite service, including a regional enterprise service as well as additional applications to enable remote telehealth and distance education,” noted NBN Co CEO Stephen Rue.

According to the company rolling out the Australian national broadband network, the new Sky Muster Plus product is scheduled to be available next year for eligible users in its satellite network footprint.

“This new product will help deliver fast download speeds by providing access to a wholesale 25Mbps product that can now burst above 25 Mbps wholesale speed when applications and network support allows,” it added.

Last year, the company doubled the maximum monthly wholesale data limits on Sky Muster satellite services (from 150GB to 300GB per month) and also increased the average peak data allowance that phone and internet providers can offer to users by 50 per cent (from 30GB to 45GB).

“We have been listening to feedback from consumers and industry on what we can do to improve customer experience on the NBN Sky Muster network,” said Rue. “The new Sky Muster Plus product is designed to give regional and rural Australians peace of mind knowing that essential internet services, like emailing loved ones or accessing internet banking, should not slow down if their monthly data limit has been exceeded.”