The NBN is on its way, but how will you leverage it into your business? Paul Skelton reports.

Now that the 2010 Federal Election has been resolved, the rollout of the $43 billion National Broadband Network (NBN) is ramping up.

Speaking at the 2010 Connected Home Conference in Sydney, NBN Co general manager of external affairs Trent Williams offered attendees an update on the current status of the Tasmanian and mainland first release sites, as well as a glimpse of the road ahead.

“The rollout of the NBN will take approximately eight years to complete and will feature more than 10 million points of connection. This means, at volume rollout, we anticipate installing some 4,000 points of connection per day,” he says.

“This will result in a workforce of 15,000 to 20,000 full-time employees at the peak of construction.”

Already, the first release sites are well underway, with activity ramping up in the 24 second release sites. These sites were chosen because of their unique climatic, urban development and geographic factors.

In Armidale, NSW, civil works are now fully resourced, aerial work design is being approved by Country Energy and work is to commence shortly. In Townsville, Queensland, civil work has commenced an aerial work will commence in line with completion of the planning instrument. In Willunga, South Australia, there will be a full underground build with boring and civil work well advanced with work commenced building conduit to the property.

In Minnamurra/Kiama, NSW, there has been steady progress on civil work with aerial works to commence shortly. And in Brunswick, Victoria, there will also be full underground construction, the majority of which will use the existing Telstra duct network with new pipe laid in areas of high congestion.

This is a long way from where the company started on 30 June 2009, with just employees – NBN Co chief executive Mike Quigley and a PA named Karen. Trent joined the company in March 2010 as employee number five.

“We are a young company. We are growing quickly and we are tasked with a significant challenge that we are very much aware of,” Trent says.

So, how will it work? Trent explains that the NBN will provide a wholesale network with the intent of providing it at the same cost to all service providers, so it is the service provider that will set the cost to the end user, not NBN Co.

In Tasmania, a handful of service providers have released their NBN subscription costs. An example of these is shown in Table 1 (NB – these prices are subject to change).

But there are still some issues that are yet to be resolved. In particular: ONT location (indoors or outdoors), end user wiring, issues pertaining to multi-dwelling units (logistical, not practical) and service levels.

“There is a strong argument circulating that expectations for bandwidth will start to level out at about the 10Mbps mark, despite having 20-30% increase in bandwidth demand each year for the last 10 years. (See Figure 2.)

“What we’re doing is building a network that will clearly meet today’s requirements but also we’re building a network for applications, services and products that have not been invented yet. I like to think of the NBN as Thomas Edison developing his light bulb – I doubt if he had in mind dishwashers, iPads and iPhones, so we really are building capability for the future and hopefully this industry will be providing more and more benefits for end users as we proceed.

“As a business we understand that we only get one chance to do this, so we must do it right.”

Also presenting at the conference was Primus Telecom product development manager Mark Duke. Primus already has active NBN customers in Tasmania, delivering broadband services as well as voice via the ONT.

This has lead to some interesting insight into consumer behaviour toward the growing network.

“In Tasmania, almost all ONTs are installed internally. We didn’t expect that, we thought they would be external, but NBN Co asked the customers and they opted for internal installations,” Mark says.

“The reason for this is that customers are familiar with the DSL experience – they expect to have the unit in their house, a modem on their desk or somewhere else in the house.

“Further, customers want faster broadband but they also want to retain fixed services.

“Finally, while in-home wiring was offered to customers, the take-up was minimal. More than 90% of customers did not request or require wiring for their NBN connection, but this may change in the future.”

It is widely understood that the NBN will have a profound effect on the way in which this industry operates, and in order to realise the full benefits of the network, installers need to be looking at how they are going to harness its potential now.

Part of this is understanding the scope of services the NBN will offer your clients, as well as how you can convert that into sales.

Obviously a national fibre network, capable of delivering IPTV and Video on Demand (VoD) to the living room requires the support of broadcasters. SBS, for one, is looking for ways to deliver more to the end user.

“We are very excited about the prospects and opportunities the NBN will bring to the media,” says SBS national online sales manager Guy Burbidge. “It’s going to bring more channels and greater access into play.”

“We keep getting asked if it is a game changer for media companies, and I guess the answer is no, not really. What we are really talking about here is evolution rather than revolution of the industry.

“We’ve been dealing with changes on an on-going basis; we’ve already seen the positive effect of increasing broadband speeds and penetration of ADSL2+ and naked DSL and those affect what happens with audiences as well. From a broadcaster’s perspective, however, the current changes in trends in consumption patterns are quite scary through the proliferation of new media devices, such as FetchTV and the Telstra T-Box. There is no doubt, however, that the NBN must happen.”

According to a recent TNS Global Life Survey, 63% of users access the internet daily, compared to 54% for TV. Australians are now spending an average of six hours on social media per week (mostly Facebook), which actually ranks Australia as number two in the world for social media usage, behind Italy.

Further, globally it took 608 days to sell one million iPods, 74 days to sell one million iPhones, and just 28 days to sell one million iPads.

“What’s particularly challenging is the exponential uptake of new devices and platforms, particularly Google, which is now the most popular site in Australia with 12.7 million unique users in the last quarter,” Guy says.

“As a result, SBS isn’t looking at Google as a competitor, but another platform to leverage off. At the moment Google TV is an unknown quantity, as is what it will mean to traditional broadcasters. To us, the reach that Google can bring is quite a daunting prospect.

“But, this is not about the death of TV. Rather, it is about a different TV in the form of online viewing, and for this to work, in most instances 1.5Mbps will be critical.

“Further, digital rights will become critical for the success of online broadcasting. It’s not unlikely that we will see Google competing with SBS and Nine and other networks for the rights to major sporting events.”