Deloitte predicts worldwide spectrum shortage

A Spectrum shortage will effect network performance like lower speeds and dropped calls as broadband demand exceeds supply in Australia and globally. Heres an interesting article by Stephanie Mcdonald explaining more:

Deloitte has predicted a spectrum and broadband shortage around the world on the back of growth in smartphone shipments and global 4G rollouts.

Deloitte has released the predictions in its 2013 Technology, Media and Telecommunications Predictions report. The company has predicted that more than 200 operators in 75 countries will provide 4G by the end of 2014.

“We are likely to see lower prices initially to encourage use, but this won’t be sustainable. Despite LTE spectral efficiency, it will still cost carriers US$5 to US$10 to carry 1GB of data, sufficient for streaming one to two hours of HD video,” Deloitte Australia’s lead telecommunications partner, Stuart Johnston, said in a statement.
He said Australia is currently experiencing a spectrum shortage, which will only get worse.

“LTE, for example, is 16 times more efficient [than] 3G when it comes to moving data. But demand is outstripping technology innovation. In the seven years it took to develop and deploy LTE, wireless traffic has increased 30 times,” Johnston said.

The spectrum shortage will impact on network performance, such as lower speeds and dropped calls and sessions as demand exceeds supply, the Youcompare states.

Johnston said the phablet, which range in screen size from 4.5 to 5.5 inches, will also become a more popular device in 2013. However, the way consumers use smartphones will vary.
“[A] growing number of smartphone owners, close to 2 billion by the end of the year, some 400 million will rarely or never connect their devices to data. This is an important consideration for those organisations developing a ‘mobile centric’ customer strategy,” he said.
Deloitte has predicted that by the end of this year, mobile devices will only make up 15 per cent of Internet traffic, signally that computers are not dead.

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iiNet claims “first place in fibre”

ISP iiNet says it has connected more than 10,000 customers to fibre to the Home (FTTH) broadband across Australia, surpassing the total number of FTTH customers connected to the NBN.

iiNet’s Chief Executive Officer Michael Malone says that more than 8,000 iiNet Group customers are connected to high-speed FTTH broadband via iiNet’s TransACT and Internode networks and wholesale services, and that a further 2,700 are connected through the NBN.

iiNet calls itself “the leading challenger in Australia’s communications industry” and which is the second largest DSL ISP (after Telstra). Malone, one of the industry’s more tireless self-promoters, said iiNet’s recent acquisitions and growth have positioned the company to be the leader in FTTH broadband in Australia.

“We’re all about upgrading the lives of our customers and giving them access to innovative products backed up by our award-winning customer service. When it comes to FTTH, we’re using every opportunity to connect as many Australians as we can to the best internet around,” he said.

“The number of residential customers connected by the iiNet Group also surpasses the number of Australian homes connected to Fibre by any other provider. As well as delivering super-fast broadband to more people than are connected to FTTH through the NBN, we’re now the largest provider of FTTH services in the country.”

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Telstra Signals Game On

Telstra (TLS) has raised the competition heat in the telecommunications sector with its purchase of Adelaide-based ISP Adam Internet, for an undisclosed sum. While only a small acquisition for the giant of the sector, it will make players in the middle tier of the broadband marketplace sit up and take notice, according to brokers. Most see it, with Telstra’s stated aim to run Adam as a separate entity, as a bid to challenge Optus ((SGT)), iiNet ((IIN)) and TPG Telecom ((TPM)). For RBS it is Telstra’s “Jetstar moment”, referring to Qantas’ ((QAN)) well-founded decision to run a budget airline, Jetstar, along side its premium service. For Deutsche, it reaffirms its view that organic growth in this area is difficult. Credit Suisse sees Adam as Telstra’s ‘challenger’ brand and believes it is a significant change for Telstra and the industry.

The acquisition price was not disclosed but speculation puts it at $50-60 million for around 80-100,000 subscribers. Therefore, the acquisition for Credit Suisse, on an 80,000 subscriber basis, implies an acquisition price of 10-12 times FY12 earnings and $550-$660 per subscriber. Credit Suisse believes the deal won’t provoke concerns at the Australian Competition and Consumer Commission, given Adam only has around 1.5% market share. RBS also notes, nationally, it would not be a material reduction in competition. However, Adam could have up to 20-25% of Adelaide subscribers and that may concern the ACCC.

Adam is seen operating as Telstra’s low cost online channel but benefiting from the infrastructure and balance sheet of Telstra. Credit Suisse says it is a sound strategic move by Telstra, giving it a lower-cost channel to minimise retail market share loss as the NBN rolls out over time. Nevertheless, there is risk, as Adam needs to gain presence outside its home market and not get bogged down by its big brother’s bureaucracy. The broker expects Adam to be positioned as a mid-tier operator going head to head with iiNet and Optus, rather than challenging the lower cost providers TPG and Dodo. The reason for this, Credit Suisse maintains, is that Telstra still has the number one retail broadband business (46% market share) and it would have a lot to lose by leading broadband prices down with the Adam brand. Optus and iiNet hold 18% and 15%, respectively, of the national broadband market share. However, in the metro broadband market, the broker estimates Optus and iiNet collectively hold 45%-50% market share. This, therefore, represents a significant opportunity for Telstra to challenge.

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Telstra to rollout low cost internet

Telstra Corporation (ASX: TLS) appears to be making a play for low price internet customers, with its purchase today of budget internet provider, Adam Internet, for a reported $60 million.

Telstra plans to support Adam Internet to expand nationally, and the brand will be run as a stand-alone subsidiary of the company. Adam Internet currently has an estimated 90,000 broadband customers, and the acquisition meets Telstra’s strategy of retaining and growing customers, while building growth businesses.

The purchase came as a surprise to many, with most of the mergers and acquisitions in the IT and telecommunications sector coming from second tier companies like TPG Telecom (ASX: TPM) and iiNet Limited (ASX: IIN). Yesterday, Telstra announced a new retail alliance with Boost Mobile, a provider of pre-paid mobile products and services. Boost Mobile will market its products on the Telstra network from early next year, after Optus – owned by Singapore Telecommunications (ASX: SGT) announced that it would no longer licence services to Boost Mobile.

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Australia lagging on fixed broadband

According to a report issued by the UN Broadband Commission for Digital Development, Australia has been ranked 21st among world nations for the percentage of the population connected to the Internet, with 79 percent of the population now online.
With 21 percent of the Australian population remaining without a broadband connection, Australia placed well behind top ranked European nations such as Iceland (95% connected), Norway (94% connected) and the Netherlands (92% connected). New Zealand came in at ninth place with 86% of the population holding a broadband connection.
The UN Broadband Commission for Digital Development tracks progress towards achieving targets set by the commission in 2011 for boosting broadband affordability and uptake.
Read more here

Revised new estate plans to bolster NBN rollout

The NBN Co is upping the ante on their Greenfields fibre-optic cable roll out by installing the respective infrastructure in these areas earlier than previously planned.


It’s believed that 49 new estates across Victoria’s metropolitan and regional areas with another 42 estates in New South Wales and 20 in Queensland, will now have new fibre broadband services installed free-of-charge over the coming months and well ahead of schedule.


In Victoria alone, the revised December increase means that 4636 premises have now been touted in the NBN Co Greenfield construction plans which is well up from the initial target of 1780 premises.


Read more at Victoria’s new estates win in NBN rollout

Internode acquisition sends iiNet to third top ISP


$105 Million. That is the price tag that iiNet paid to snap up a pre-boxing day bargain and catapult the respective ISP into Australia’s third largest Internet Service Provider position.


The 190,000 customer transaction also brings the iiNet broadband customer base close to 900,000 subscribers (15.5% market share) which is only about 100,000 behind Optus who sits on 1 million.


Internode now joins an impressive list of Telecommunication acquisitions that iiNet have made in the past 18 months that includes the likes of TransACT for $60 million, Netspace for $40m and the consumer customer base of AAPT for $60m. We have at one time or another compared all of these brands at Youcompare.


This latest purchase also appears to be a very timely and strategic move. One that not only has been brought about to strengthen iiNet’s position for the inception of the NBN, moreover a move that could also fend off a possible takeover from rival Telco TPG.

NBN access price freeze for 5 years

Mark these words – NBN will freeze wholesale access prices for five years. That means retail service providers will not have to be concerned about the NBN slugging any additional costs for access to respective services until at least July 2017.

What does this mean for consumer? Well it should in turn benefit the consumer also and ease any concern in regards to any inflationary or sharp rises in costs for broadband, phone and IPTV services in the same period. However, just because the NBN has frozen prices for five years it doesn’t mean that retail service providers (E.G. Telstra, Optus, iiNet etc..,) will freeze their prices over the same duration.

Remember this article in coming years and think twice when you hear of any NBN service provider making an announcement that talks about about jacking up prices.

This means the entry level wholesale price would not rise until at least July 2017, and then increase by no more than 1 to 2 per cent per year after that, depending on inflation.

However NBN Co cannot guarantee retail service providers would not increase retail prices independently of wholesale prices.

Read more at – NBN reveals 5-year fixed price plan

NBN Co unveils Operations Facility

The Minister for Communications and Broadband, Senator Stephen Conroy, has officilally opened the doors of the NBN Co’s  new operations and demonstration facility in Melbourne’s Docklands region.


Nicknamed the ‘Nerve Centre’ the new facility will be an information hub for consumers and service providers for all things NBN and in addition, host the Network Service Operations Centre (NSOC), the National Test Facility (NTF), the Service Activation Centre (SAC) and the Discovery Centre.


Learn more about the NBN Co’s new operations and demonstrations facility at – NBN Co opens new facilities in Melbourne


Broken Hill Broadband Backbone Link Completed

Nextgen Networks has just completed construction on a new Broken Hill broadband backbone link that extends from Gawler in South Australia, through to Shepparton in Victoria and will offer improved broadband services for approximately 137,000 people residing in those areas.

The initiative is part of the Regional Backbone Blackspots Program (RBBP) with the completion announced yesterday by Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy. Mr Conroy stated that the new link would provide greater competition, better value services and faster broadband throughout the stretch of 1150kms that the link entails.

The RBBO will provide retail service providers the ability to offer better broadband services in the following towns:

Dutton East
Wigley Flat
Morcalla North
Broken Hill
Red Cliffs
Swan Hill
Mystic Park


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