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  • Analysis, Telecommunications - Written by on Thursday, November 8, 2012 11:53 - 69 Comments

    Rip-off: NBN business plans miss the point

    analysis The infrastructure being deployed as part of the National Broadband Network isn’t just for consumers; it will also be used extensively by businesses and non-profit organisations. But the business-focused NBN plans released so far don’t deliver on the network’s promise; being little more than more expensive versions of NBN consumer plans.

    So far, most of the discussion around real-world usage of the NBN infrastructure has focused on Australia’s consumer market. Pretty much every Internet service provider of any kind (except TPG) has released their first tranche of consumer pricing plans on the network’s fibre infrastructure; discussions about streaming video and TV in the home are ongoing; and many, many accounts of the experience of the first consumers to sign up to the network have been posted online.

    Partially in an effort to address this one-sided discussion, the National Broadband Network Company had a huge product launch this week, focused on how the network can be used for business purposes. Telcos focused on the business market, such as AAPT and Macquarie Telecom, sent representatives and issued media releases loudly proclaiming their commitment to the NBN business market, and others hoping to get into the business scene in a bigger way, such as iiNet, also attended. Small business notabled such as Flying Solo founder Robert Gerrish and Peter Strong, executive director of the Council of Small Business of Australia, were trotted out to give speeched, and it appears as though the event went well for all concerned.

    The only difficulty is … it’s hard to escape the impression that the whole event – in fact, the whole way which NBN Co and retail ISPs are communicating about the NBN for business right now – is pretty much just headline-grabbing fluff, without any substance.

    The difference between consumer and business broadband plans has always been a bit nebulous to start with. If you go to the small business pages of ISPs such as iiNet, Telstra, Optus or others, what you’ll generally find is that they are virtually the same as the consumer offerings, but with higher pricing and sometimes lower quotas and a number of small, usually unnecessary add-ons, such as static IP addresses for broadband connections (presumably so you can host a server on the other end), upgraded support (generally unnecessary, when ISPs such as iiNet already provide around the clock support), security add-ons such as better spam and virus protection (again, usually unnecessary) and upgraded telephone and web hosting offerings. Sometimes more symmetric broadband speeds (which result in faster upload speeds) are also available.

    As the operator of a small business myself (and one that requires constant, reliable broadband connectivity and web hosting to function), I’ve always found these offerings a bit anaemic. Why, after all, should I pay more for services I don’t really need, when the basic consumer-grade packages are usually more than enough? Yet, every time I do need to buy a new telecommunications service, whatever provider I am speaking to at the time will, as soon as they find out that I operate a business, attempt to shoehorn me into paying more for ‘business’ features which I probably won’t use.

    I am very aware that I’m not the only small business operator who feels this way; nor the only one who habitually chooses ‘consumer-grade’ offerings by default; even when we’re talking about offices of up to a dozen people, ‘business-grade’ offerings often get ignored. It’s a different situation when you get up to the point of several dozen staff, of course, and also when you’re operating a large enterprise – at that point, standard packages usually become obsolete and you’ll probably find yourself negotiating a customised solution with a telco account manager.

    The situation appears to have become even worse under the NBN, at least so far.

    Take iiNet’s business-focused NBN plans, for example. If you compare them with the ISP’s consumer NBN plans, what you’ll find is that there are only tiny differences – the addition of a static IP address and more free email address, for example. And yet iiNet’s business-grade NBN plans are significantly more expensive. The most basic 12Mbps business plan costs $49.95 for consumers, but $79.95 for businesses, a moderate 50Mbps plan with increased downloads costs $74.95 for consumers but $104.95 for businesses, and the top-end 100Mbps terabyte plan costs $99.95 for consumers but $129.95 for businesses. $30 extra per month, just because your broadband connection is classified as “business-grade”? What a joke. Not happy, Michael Malone.

    It’s a similar situation with Optus. The company offers stand-alone consumer NBN plans at $39.99, $59.99, $69.99 and $79.99 price points, but pretty similar packages for businesses at $59, $99 and $119 price points. Its bundled consumer data and voice plans range from $64.94 to $129, whereas its bundled business plans range from $99 to $129. And yet again, there appear to be very few business-related add-on benefits included as part of the plans … despite the increased cost.

    So what about a dedicated, business-focused telco like Commander? Unfortunately the situation is little better. The company’s NBN fibre plans released yesterday are similarly woeful, starting from $114.95 for a 50Mbps connection with a piddling 300GB of data (for a similar price in consumer-land, you’d get twice the speed and twice the quota), to a whopping $161.95 for the company’s ‘Business Fibre Plus with Enhanced Support’ option, which comes with a terabyte of quota and 100Mbps speeds.

    Commander’s website contains very little detail about how it can possibly justify charging such prices, but it does list the fact that its business NBN plans come with “improved support coverage and restore times”; “Increased ability to support multi-line voice services and telephony applications giving customers access to multiple lines within their premises” and an enhanced service level agreement.

    Now in an ADSL broadband world, you can imagine that there could have been some justification for these price increases. Businesses are more complex beasts than consumers, with more-demanding requirements, especially during business hours. Consumers can generally get by if they suffer a short-term broadband outage, and can wait a while to deal with technical support in a call centre, but businesses often don’t have these kinds of luxuries. And they also often need add-ons such as static IP addresses or hosting packages that consumers don’t.

    But as I’ve previously written, the fact is that the NBN’re fibre will deliver such a massive fundamental increase in basic broadband service delivery that most of these issues will cease to matter when it is rolled out.

    Dedicated business customer support, for example, and detailed service level agreements, will mean very little to NBN business customers, due to the inherent higher reliability of the NBN’s fibre network. When the network never goes down and is always as fast as you need it to be … why would you need to call technical support? Who cares what the SLA is, under those circumstances? And would the provision of symmetric broadband even be a desirable option, when even basic NBN 100Mbps services come with 40Mbps upload speeds?

    And the same can be said of the other ‘features’ which ISPs are offerings businesses. Allocating a static IP, these days, should cost an ISP like iiNet literally nothing, so it can’t justify charging for it. The construction of the NBN will make it much easier for businesses to source great hosting and web-delivered applications either from service providers in Australia or overseas, and given that most businesses don’t even use their ISP-allocated email addresses, who cares whether you get ten or twenty?

    Now, there is one possible avenue which retail ISPs do have to promote specific business services under the NBN: Voice services. And indeed, if you closely examine NBN Co’s narrative around its business offerings (PDF), this is pretty much the only differentiating factor which the wholesaler has pitched thus far to businesses. The company’s ‘NBN for Business’ product, it said in September and again this week, will allow ISPs to offer businesses the ability to run up to 50 voice services over its fibre network. It will also offer extended levels of support for ISPs as part of the package.

    What NBN Co is hinting at here is the holy grail for businesses. At the moment, most businesses beyond a handful of seats currently run in-house PABX systems to deliver voice telephony services to their staff; even if that voice traffic is eventually trunked over an IP network when it leaves the business. This is necessary because of the fundamental failure of Australian ISPs to successfully launch remotely delivered voice over broadband products; with PABX-like services hosted virtually on the ISPs’ end, rather than the customers’ end. I don’t know as much of the specifics of this kind of service as I would like; but in general this is described as ‘hosted PABX’ or similar.

    If Australian ISPs can master this functionality under the NBN, and offer it delivered remotely to customers, they will have a compelling service offering on their hands; especially if they can manage to integrate it well with quality of service functionality on the NBN’s network. Certainly I know in the range of dozens of small businesses who would be interested in this kind of thing. Businesses would like to buy voice services the same way they do broadband – with very minimal equipment on their own premises – but currently they usually can’t. However, it’s precisely this kind of thing – the ability to take small and even medium business telephony off business’s hands – that none of the current crop of NBN business ISPs seems to be offering.

    I can think of a host of other NBN-related packages which small to medium businesses would also be highly interested in buying from ISPs. Anything involving backup or business continuity features, for example (made much easier in an NBN world due to much higher upload speeds) would go down well, and although we’re not a huge fan of Optus’ marketing partnership with Google Apps (why use Optus’ version, instead of going straight to Google?), we can’t help but feel as though a single, one-stop shop billing solution for a combination of telco services and software as a service platforms (collaboration, CRM, billing and so on) would go down well in small business. And of course almost every small business also uses mobile technology at this point; why aren’t we seeing bundled NBN packages with mobile?

    In all of these areas, perhaps the technology isn’t ready yet; perhaps there’s no margin; or perhaps it’s all just too experimental on the NBN network and NBN Co itself hasn’t yet gotten its business product offering to the right place yet. I’m not quite sure, although I’m sure retail ISPs are thinking about some of these issues.

    But one thing I do know very well. Especially when you consider the basic service delivery improvements which the NBN will bring, no Australian business will be attracted to NBN packages which are just more expensive versions of consumer offerings. What they do want is to be able to confidently ditch their in-house PABX platforms for outsourced equivalents that they don’t have to administer themselves, and all the better if they can bundle additional services like mobile, backup and perhaps SaaS services in as well. Now that would be an NBN business package which we could all get behind.

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    1. Geoff
      Posted 08/11/2012 at 12:49 pm | Permalink |

      Reality is that the SMB ISP market is a turd of a market to address –

      1. It is very price focussed, as your own feelings on this matter demonstrate.
      2. It carries a disproportionate support burden – SMBs tend to use the ISP support line for anything related to IT, and will scream louder than a corporate with a five nine SLA if their email goes down for 30 minutes.
      3. It carries all the geographic dispersion of the residential market, making it hard to deliver a consistent level of service.
      4. The high volume low margin nature of the business means you need to build a single all singing all dancing highly robust product because it isn’t practical to customise solutions for individual SMBs. A lot of ISPs have a very shallow product and engineer team and can’t pull something like this together.

      Interestingly, one company that has been able to put a product together like you describe is Telstra with Digital Business –

      http://www.telstra.com.au/business-enterprise/bundles/telstra-digital-business/

      This has taken them years to bring to market, has been delayed on multiple occasions and has taken thousands of man hours to bring together. Its not just because they are Telstra though, it is a very hard nut to crack.

      SMBs are tough to address, and haven’t been well served as you say. The ability of the individual ISPs to pull together a compelling, supportable and profitable product for SMBs will be one of the main determinants to who is around 5 years after the NBN is rolled out.

      • Posted 08/11/2012 at 1:34 pm | Permalink |

        “scream louder than a corporate with a five nine SLA”. You sir just made my day.

        • brutally handsome
          Posted 12/11/2012 at 7:34 am | Permalink |

          Well yes correct.

          But you would be surprise how many so called premium carrier suppliers that supply corporates are run by 2 man NOC teams supporting 10+ enterprise carrier systems , one field test, and the rest supported by on call contractors.

          I’m not talking about companies youve never heard of, im talking about the AAPTs and Uecomms and Nextgen networks.

      • Dean
        Posted 12/11/2012 at 8:54 am | Permalink |

        As someone who’s worked in support, supporting both SMBs (1 or 2 people in the company) and large corporations (10,000+ employees) I can definitely attest to your points. For an SMB, if something goes wrong, that’s their livelihood at stake. Whereas for a larger company, if your email goes down, it affects their bottom-line for sure but everyone involved is still getting paid a salary so they’re not as inclined to see the world crashing down.

    2. Mark
      Posted 08/11/2012 at 12:53 pm | Permalink |

      At least it still beats paying $1400 a month for our current 25/25Mbps “business” plan… It will be nice in a little over a year when we can switch (for our current speed we have no other choice at the moment — competition for the win)!

      I’m totally with you on the external PABX hosting — that would be awesome.

      • Ben Zemm
        Posted 08/11/2012 at 10:46 pm | Permalink |

        And we were quoted over $2000/month for a 2/2 Mbps service. A year ago. Which still carried a transfer quota, 300GB IIRC. But that is the only thing available with faster upload than Telstra’s 8/0.3 Mbps ADSL. Gotta love “competition”.

    3. NightKhaos
      Posted 08/11/2012 at 1:08 pm | Permalink |

      There is one thing, and one thing only, that they have to say to justify the higher business plans (and of course actually provide it), and that is “Higher priority services” or “Less contention”. I’m sure the marketing department can come up with some fancy way of saying it, but it should be obvious: the plan provided has a higher back haul (CVC) provision than consumer grade plans meaning during peak times your service is less likely to suffer from contention.

      That is probably what they’re doing anyway, but of course if they don’t tell you that, it does indeed look like a rip-off. Maybe they think SMBs aren’t interested in that when look at the marketing fluff, maybe they think it’s to difficult to explain to SMB owners what that means. Maybe they think the ACCC will call foul despite the fact it’s a fundamental part of network operation (contention). *shrugs*

      • Mathew
        Posted 08/11/2012 at 10:40 pm | Permalink |

        > There is one thing, and one thing only, that they have to say to justify the higher business plans (and of course actually provide it), and that is “Higher priority services” or “Less contention”.

        The challenge with this is that the most likely choke point on the network is the PoI. Unless business customers pay for higher traffic classes (and those are very expensive) then all customers on an RSP will traversing though the same PoI choke point. It is unlikely that two separate connections to the PoI for different contention ratios would make sense.

        For budget RSPs offering high quota (especially unlimited plans) the value of higher speed plans on a congested network may be debatable.

        • Chris
          Posted 09/11/2012 at 8:09 am | Permalink |

          Hi Matthew

          The POI is not likely to be the point of contention for most ISP’s. The AVC to CVC ratio they select in the NBN will be where contention is controlled. For consumer plans NBN recommend somewhere around a 250:1 contention ratio to make pricing comparable to todays broadband.

          The business plans are likely to have much lower contention ratios on the AVC/CVC combo and they will have higher levels of support. Upgraded support isn’t about 24×7 it’s about the person you get on the other end of the phone and the guarantees about service restoration.

          In most cases the consumer plan will suit small business, lets face it most congestion happens in the evening.

          • Posted 09/11/2012 at 8:16 am | Permalink |

            @Chris

            250:1??

            Normal ADSL contention ratios are 20 or 25:1. What you’re suggesting is 10 TIMES the current contention ratios. May I ask where NBNCo. has suggested this?

            Also, the POI IS where contention happens- CVC is bought for EACH POI. Therefore, that is where the contention happens.

    4. Belinda
      Posted 08/11/2012 at 1:11 pm | Permalink |

      Not all the business plans are available yet ……

      “For businesses with greater upload bandwidth demands, NBN Co plans on releasing medium business and enterprise products in the next two years. The medium product will be released in the second half of 2013 and will offer 40Mbps symmetric upload and download speeds. The enterprise product will offer 100Mbps symmetric services.”

      http://www.zdnet.com/au/nbn-business-products-fill-the-gap-aapt-7000007006/

    5. Hubert Cumberdale
      Posted 08/11/2012 at 1:16 pm | Permalink |

      eh, I dont see what the problem is but tbh I’ve never had a business grade plan so my perspective on the issue is this. It’s all relative. We have raised the bar on home plans, that is with regards to speed and reliability, now they look just like business plans so they look less impressive now. Isn’t fibre great?

    6. Posted 08/11/2012 at 1:20 pm | Permalink |

      While I agree in principle that there seems to be a large disparity:

      When the network never goes down and is always as fast as you need it to be

      This simply isn’t true Renai. Yes, no question, fibre WILL be much more reliable. But it is FAR from infallible. And as you yourself said, small businesses, even those not based on broadband connections, cannot afford outages of ANY kind, compared to residential users.

      The fact is, as Geoff has said above, the SMB market EXPECTS support. It’s not that they want it or need it necessarily- the EXPECT it. That is why many businesses pay the extra, even knowing they may not need it. Often most small businesses HAVE no “IT Department”- it is simply the same guy who owns the business. In this respect, a small business owner would much rather pay $30 a month more for the same thing he gets at home (which, mind you is a HELL of a lot cheaper than they pay now), with the added ability of being able to ring up and say “my internet won’t work on my new Laptop” and having tech support run him through the entire setup of not only normal WiFi, but any Exchange/Google services sync and any server systems they have at work too, as a matter of course, rather than at $80 an hour for support.

      I think you need to remember Renai, you are a tech savvy and switched on bloke when it comes to all this- 80% of small businesses wouldn’t be and to have that ability to ring up and whinge, even if it’s their fault, simply by paying $30 extra a month, is a boon for most SMBs.

      And don’t forget, new plans will no doubt be coming out that ARE more useful- Symmetric 5/5, 40/40 and 100/100 plans at $100, $200 and (likely) $400 a month. That is HUNDREDS of dollars cheaper than now (Telstra 5/5 SDSL is $350 a month) and as you’ve already noted, but default inherently more reliable, hence the decreased price overall.

      While I think there IS a general criticism to be made of the currently “rip offish” type plans that some very bewildered and unsure SMBs will pay, assuming they get more, when normal consumer plans will be fine and cheaper, this is only first round- I’d say, RSPs are trying to use these “new” plans to offset lower initial revenue on the NBN with low numbers currently passed. That’s not good, but it’s not unexpected of the retail industry. But NBNCo. are launching several more products specifically for business over the next 3 years and while THEY can’t guarantee proper pricing, I think we’ll see much more value in future SMB NBN plans.

      • Mathew
        Posted 08/11/2012 at 10:48 pm | Permalink |

        > This simply isn’t true Renai. Yes, no question, fibre WILL be much more reliable. But it is FAR from infallible. And as you yourself said, small businesses, even those not based on broadband connections, cannot afford outages of ANY kind, compared to residential users.

        Fibre is just a susceptible as copper to a contractor with his back hoe or overhead wires being ripped down. Cut cable is the cause of the last 3 issues in my street.

        • Posted 08/11/2012 at 11:26 pm | Permalink |

          @Matthew

          Cut cables, I believe, account for LESS than 10% of faults. MOST faults on copper are from water on the line or excess corrosion, as well as RF interference on long lines in noisy areas.

          I’d say removing 90% of the inherent unreliability of a network counts as “greatly increased” wouldn’t you??

    7. SMEMatt
      Posted 08/11/2012 at 2:11 pm | Permalink |

      I is the reason why I like the way Internode have their plans structured.
      They have the addon packs for business type services, so you can take their basic plan and add business type extras to it if you need it, for a cost. Then you have the real business grade connections.
      One of the bones of contention with NBN wholesale costing involved the price to offer low contention ratios which is important for real business grade services if you are using more than web browsing and email.

    8. Paul Grenfell
      Posted 08/11/2012 at 2:22 pm | Permalink |

      Dont forget, these business plans are ubiquitous across 3 delivery mechanisms, Fibre, Wireless and Satellite.

      • Posted 08/11/2012 at 2:44 pm | Permalink |

        @Paul

        Are you sure? I don’t think so. Apart from anything, only the 12Mbps would be available over wireless and sat….and currently not over NBN interim sat.

        No, I believe these are fibre only.

        • Paul Grenfell
          Posted 08/11/2012 at 2:57 pm | Permalink |

          Sorry, i was referring to NBN wholesale.. Jumped the gun there,, i assumed from the following NBN link.
          http://www.nbnco.com.au/getting-connected/service-providers/pricing-approach.html
          “Uniform national wholesale access pricing….our pricing is harmonised across the entry level product for the three technologies used to roll out the NBN: fibre, wireless and satellite. Uniform national wholesale access pricing across all geographic areas is supported by an entry-level product tier with pricing and specifications independent of the technology platform over which it is delivered.”

          but i see we are talking FTTH.. just ignore my post

    9. NPSF3000
      Posted 08/11/2012 at 2:55 pm | Permalink |

      Rip-off… you call this journalism?

      This is exactly what we expected – same basic product with a bigger margin for the ISP and more ‘support’ + a couple of thrills. If you’re really lucky they might allocate more CVC to you.

      What’s the problem?

      If you want more fancy SLA’s, higher QoS, more CVC, dedicated Fiber etc. NBN also offers those items – but that’s [apparently] not what this release is about.

    10. Paul Grenfell
      Posted 08/11/2012 at 2:59 pm | Permalink |

      My son pays Telstra through the nose, for a 5/5 service.. i wouldnt complain Renai..

      • Posted 08/11/2012 at 3:29 pm | Permalink |

        @Paul

        Absolutely agree. The point is these plans are lightyears ahead of what we have now because of their inherent speed and reliability on fibre.

        I guess Renai’s point is he would expect specialist SMB plans, but to be fair, NBNCo. hasn’t actually launched their business products yet, so RSPs have simply ‘bolted on’ support and ‘business requirements’ like static IP and made them more expensive.

        I guess my point is, this is simply ISPs doing what they do in their normal way. It’s not indicative of an NBN world pricing scheme for business. It’s simply ISPs doing what they do- price gouging business cause they can get away with it. It really has little to do with the NBN- the NBN is just another medium they do it across. NBNCo. is not responsible for that unfortunately.

        • Grey Wind
          Posted 08/11/2012 at 3:58 pm | Permalink |

          I agree – how are NBN co or retail ISP’s supposed to differentiate though?

          Paying $500 a month for a 10/10 fibre line that cost $5k+ to get installed here. internet has never been better. id still rather pay for “business” plans on the NBN, even in their current form, which you could say is overpriced because they offer little extras.

          • Posted 08/11/2012 at 4:13 pm | Permalink |

            @Grey Wind

            Again, NBNCo. aren’t responsible for this. It is RSPs only. NBNCo. have yet to launch their TRUE Small business product- 5/5, or their medium business product, 40/40. (although, I think more Small businesses are likely to take up the 40/40 than would be thought- 5Mbps download is woeful even these days.).

            Point is, this is a RETAIL choice- RSPs have slapped the “Business” moniker on consumer plans, upped the price by 25% and called it a day for years. I’d be asking why don’t they simply recommend consumer plans to small businesses? Cause it doesn’t make them as much money, that’s why.

            None of this is NBNCo’s issue. But it does make it GLARINGLY obvious RSPs are simply price gouging businesses because they can.

    11. Posted 08/11/2012 at 3:37 pm | Permalink |

      A lot of the “business plans” that are out there are actually using the wholesale “consumer plans”.

      The real NBN wholesale business plans – (with different pricing structures and technical features designed for business purposes) – are a whole different kettle of fish.

      They offer the higher tier traffic classes, business appropriate SLAs, etc.

      Comparing these to the “business” plans that some ISPs are offering using the “consumer” wholesale product is like comparing donkeys with pomegranates.

      Quite different.

      The ISPs just want to sell to business, and in some instances, using the consumer product is enough, but these are not the true NBN business wholesale products.

    12. Mr.B
      Posted 08/11/2012 at 4:41 pm | Permalink |

      I find it a bit of a let down when joruno’s complain these NBN prices are high and totally neglect to mention the 10x higher prices charged by Telstra and Optus for their dedicated symmetric business plans…

    13. BBA
      Posted 08/11/2012 at 4:56 pm | Permalink |

      I have to agree with what other posters have echoed.

      There is nothing wrong with these prices, in fact, if anything they are on the cheap side. We currently have a remote site (which is in an area destined to get NBN fibre) and have a 2Mb/2Mb SHDSL service for those clients. We pay more than a factor of 10 higher than the largest business plan offered here.

      Cost of a business grade plan with speeds of 100/40 and download limit 1TB $130/month
      Saving more than $1000 and having 50 times the speed down and 20 up…well that’s priceless.

      There is no way you can be upset with these prices.

      • Posted 08/11/2012 at 5:52 pm | Permalink |

        But what is the technical difference between the business-grade and consumer-grade plans? At the moment, not much. So why should you pay more?

        • Posted 08/11/2012 at 5:58 pm | Permalink |

          @Renai

          I agree, on the CURRENT plans. But these are the RSPs issue. You could say the same on mobile or ADSL or even VDSL and FTTH where it IS already available outside the NBN.

          This is endemic of the system, not of the NBN.

        • NPSF3000
          Posted 08/11/2012 at 7:04 pm | Permalink |

          “But what is the technical difference between the business-grade and consumer-grade plans?”

          Why do you assume a technical difference is necessary or wanted?

        • Brendan
          Posted 08/11/2012 at 8:22 pm | Permalink |

          For guaranteed service levels.

          Businesses can’t afford to call tech support only to be told a tech will be out there in 4 days.

        • Posted 09/11/2012 at 7:56 am | Permalink |

          For support. Support costs money.

          I use iinet at home and for business. There is a big difference in the support level. We’re relocating offices and have a tech assigned to make sure our services and SIP trunks are migrated with no downtime.

          For the tiny difference in cost, a business plan is worth it.

        • BBA
          Posted 09/11/2012 at 9:16 am | Permalink |

          I take your point about technical differences. What I was trying to say, is that we (remote site) won’t need a special solution over an MPLS network once the NBN is available and we will probably just run a site to site VPN tunnel and be done with it. The other thing which we do get the benefit of with the business connection is communication. Any time the site drops off we are sent an email letting us know, we are also kept in the loop about planned/unplanned network outages which helps a great deal and well worth the extra dollars (at least in the case of the NBN pricing).

        • baly
          Posted 04/04/2013 at 10:23 am | Permalink |

          Hi Renai, isn’t the major difference that business grade plans have different contention ratios to consumer grade plans?

    14. Baa
      Posted 08/11/2012 at 5:05 pm | Permalink |

      When the NBN really gets moving; we’ll be seeing some really good plans for the medium and larger business customer.

      Right now; my work pays in the order of 60 dollars per megabit (and I have heard of much cheaper), with no usage quota.
      Combine that with 20 dollars per megabit CVC charge and I forsee some pretty attractive plans for very large users becoming trivially available. (In contrast installation is 10k+ and we are in the CBD!)

    15. Posted 08/11/2012 at 5:08 pm | Permalink |

      I’m a businessman who doesn’t understand intertubes.

      What? I can pay $60 more for ‘teh bizness’? Then that’s the one I want. I am teh bizness.

      That’s all this is. If you’re on a ‘business plan’ that costs less than $600 a month, you’re a sucker.

    16. Posted 08/11/2012 at 5:34 pm | Permalink |

      This article has missed the key differentiator, which only one of the comments mentioned – contention ratios.
      Just like DSL services, the connection from the premises to the access point (different places in the NBN and the DSL exchange) is uncontended – you get a direct connection. There is some sharing on the fibre to the NBN point-of-interconnect (POI), but that is carefully managed.

      The real differences comes in the Contention Ratio used in the backhaul to the connection point to the Internet. For consumer services this can be 80 or 100 to 1, which means you are sharing the bandwidth with that many users (choke point!). For low-cost providers, this can be up to 500:1.

      Businesses pay more to get 20:1, 4:1 or 1:1 depending on what they need (they pay for a guarantee that it won’t exceed 4:1 for example).
      That’s the real difference, not how quickly the phones are answered!

      • Posted 08/11/2012 at 5:51 pm | Permalink |

        There’s not much evidence (evidence, not theory) yet that contention rations will play a bit part in an NBN world. My suspicion is that the underlying technology is good enough to make it fairly irrelevant as an issue.

        • Gene W
          Posted 09/11/2012 at 1:50 am | Permalink |

          >There’s not much evidence (evidence, not theory) yet that contention rations will play a bit part in an NBN world. My suspicion is that the underlying technology is good enough to make it fairly irrelevant as an issue.

          There isn’t much “evidence” either way.

          Until there is evidence to disprove it, I’m going to believe what the theory says: budget ISPs will buy less capacity in order to cut costs, and less capacity equals greater probability of congestion.

        • Chris
          Posted 09/11/2012 at 8:18 am | Permalink |

          Sorry Renai but how do you figure this and why would you need evidence beyond whats already available in the networking world? Fiber is not new, it’s used for transmission in major systems and even there if your link is saturated it’s saturated.

          Most hardware will use some form of queuing to cope with this scenario but I believe the NBN will not be queuing packets they’ll just drop them when you exceed bandwidth rates. Dropped packets will create a sketchy experience if you are doing anything time sensitive while congestion is at its peak.

          • Posted 09/11/2012 at 8:25 am | Permalink |

            @Chris

            NBN drop packets? I doubt that- that’s an extremely sloppy way to build a network. It makes connections inherently unstable. And why would NBNCo. make Traffic Classes if they weren’t to be queued? Just to decide whose packet gets dropped first?

            No, NBNCo. will have a queing solution, that is why the Traffic Classes are there and more to come. Saturation of links, 100Mbps links for example, is not going to be an issue for a few years yet. Perhaps towards the end of building it will be, but by then, with the majority on the NBN, RSPs will have the revenue to enable them to buy enough CVC without it being an impedance on revenue.

            • Matt
              Posted 09/11/2012 at 10:04 am | Permalink |

              Dropping isn’t bad. It is better than excessive queueing at any rate. Like any telco NBNco won’t be filling buffers with traffic to avoid drops, they will strict police bulk data unless its a higher class of service.

            • ferretzor
              Posted 09/11/2012 at 4:09 pm | Permalink |

              Dropping packets is precisely how most QOS mechanisms (at IP level at least) work. Its basically all there is.

      • Posted 08/11/2012 at 5:57 pm | Permalink |

        @Tim

        I have to disagree there.

        NBNCo. has not launched a new Traffic class in FTTH yet. They have class 1 and class 4. TC1 is for voice ONLY. TC 4 is for everything else.

        So these “business” plans, are using TC4. Therefore, there IS no way to differentiate their contention ratios currently. And there is no way to do it by location, as these SMBs will be distributed ALL OVER, so you can’t guarantee a certain level of contention for them specifically, except via Traffic levels, which haven’t been launched yet.

        What Renai is talking about here is, essentially, business plans being just consumer plans, charged more, with “additional” options that aren’t really additional. In general, I agree, but it ISN’T NBN specific- the same is true on ADSL.

        This is a retail failure, not a failure of the NBN.

        • NPSF3000
          Posted 09/11/2012 at 1:32 pm | Permalink |

          “So these “business” plans, are using TC4. Therefore, there IS no way to differentiate their contention ratios currently. And there is no way to do it by location, as these SMBs will be distributed ALL OVER, so you can’t guarantee a certain level of contention for them specifically, except via Traffic levels, which haven’t been launched yet.”

          Nope, think about it logically.

          You [RSP] have bought X CVC on POI Y. You know if you exceed this CVC NBNco will start throttling your users indiscriminately. What do you do?

          Answer: Throttle your users first. If you’re approaching CVC [or other] limits start throttling non-business users.

          No idea if any of the aforementioned plans do this of course – but it’s fairly simple stuff that should be doable using existing gear without much problems.

          • Posted 09/11/2012 at 1:43 pm | Permalink |

            @NPSF

            Oh, yeah, for sure. I was meaning there’s no way to do it once it’s IN the NBN. An ISP can always throttle its’ own users- any ISP that didn’t have that functionality would be well behind the times.

            But that kind of defeats the purpose of having Traffic Classes if you don’t use them…..?

            • NPSF3000
              Posted 09/11/2012 at 1:49 pm | Permalink |

              Different tasks.

              Throttling your own CVC provides a cheap and easy way of balancing speed & quota between users. For example, between SMB and high quota residential users.

              Traffic classes on the other hand, are designed to work if NBNco themselves are overloaded – e.g. you business user shares the PON with 31 TPG unlimited users. It’s far more costly than DIY and [hopefully] provides only a marginally better service [cause you’d hope NBN have capacity].

              • Posted 09/11/2012 at 2:10 pm | Permalink |

                Mmmm, so a TC would receive priority from the OLT onwards, whereas CVC would receive priority based on POI and an ISPs own throttling technique.

                Makes sense. I’d say it’ll be a few years before we get to saturating a significant number of PON links though. Considering at 2.5Gbps and a 32 way split, each user gets 78Mbps, it’ll be at LEAST 5 maybe 10 years before the average moves to that high and by then, they may well have moved to 10GPON, removing the barrier again. No doubt there will be individual areas that are high demand, so TC will be useful for them.

                But I guess RSPs won’t be using TCs as a standard way of priority, when they can do it themselves.

                Kind of makes sense now as to why NBNCo. haven’t pushed hard to release more TCs.

                • NPSF3000
                  Posted 09/11/2012 at 2:17 pm | Permalink |

                  Last thing to remember is that GPON contention ratio is just that – GPON. IIRC there’s a lot of aggregation & potential contention on the way up to the PoI. I believe a year or two ago they said they were planning on 2TB quota’s – which while large is substantially less than 78Mbps x Month.

                  Not that this is likely to be a problem – and is easy to upgrade – just things that can make the difference between 99.9%, 99.99% and 99.999% uptime’s.

                  • Posted 09/11/2012 at 2:21 pm | Permalink |

                    Mmm and I believe NBNCo. work on 99.99%, which is pretty much gold standard for networks. Especially one of this scale.

    17. Guest
      Posted 08/11/2012 at 5:42 pm | Permalink |

      business must be slow this week. not a particularly good article. sounds like hes been ‘ripped off’ by someones business plans recently

    18. Soth
      Posted 08/11/2012 at 6:34 pm | Permalink |

      My experience working with small business plans (from 1 to 5 users) any complaints we had were answered straight away, even physical line complaints they had someone out that day to check it out, any down time we had (rare but it did happen, storms etc..) we always got rebated in the following month bill.

      • Aaron
        Posted 08/11/2012 at 7:56 pm | Permalink |

        I think it depends on the company. My AAPT business line to home had awesome support the couple of times I needed to call. Phone answered by a knowledgable person within first couple of rings, and follow ups later to confirm everything was fine. Connection was always full speed. During this time people were bitching all over Whingpool about horrible support/speeds for consumer lines.

        In comparison, the ISP I worked at dumped all incoming calls into the same call centre, so waiting times were the same for all incoming calls. The only real difference was that business calls would be pretty much immediately forwarded to higher level support, but at times they may have been waiting 20+ min for someone to answer the phone.

        The earlier comment about small business complaining more than large businesses is definitely the truth. It always seemed the the people paying the least were always the first on the phone and immediately screaming at staff and blaming them for everything (e.g. One moron was pinging another site constantly, and called the NoC at 2am because a packet was lost…. wtf). Countless calls from ‘professional’ stock traders on the cheapest plans screaming about how we are costing them money because they have been capped.

    19. Max
      Posted 08/11/2012 at 11:42 pm | Permalink |

      I agree with the article questioning the differences between NBN Residential and Business plans. The same applies to the DSL market. There is really no technical difference between in a DSL Home and Business apart from value adds like priority support, static ip, reverse DNS etc.

      NBN Business plans that have been released by companies aren’t anything like current symmetrical (MetroE/Midband) services offered by Telstra, Optus, PIPE, Vocus, Nextgen etc and cannot really be compared, apart from the headline advertised link speed. Beyond that they’re very different. NBN Business plans aren’t point-to-point L2 services (yet), they have to compete for CVC (unlike P2P services which typically have no contention) and there is no ability to provide multi-site advanced services like MPLS.

      I suspect we’ll see “corporate” services from NBN, like the current symmetrical style plans, released at some point in the next 24-48 months.

    20. Goresh
      Posted 09/11/2012 at 6:19 am | Permalink |

      Generally businesses use a much higher proportion of their data allowance each period.
      As a private customer with 5 “heavy” internet users, I still average about 70mb/month.

      Still, if you don’t need any business “extras” and you don’t tell them you are a business, what can they do?

    21. raymond
      Posted 09/11/2012 at 8:38 am | Permalink |

      this is not an NBN issue, its an ISP issue, the headline is deliberately provocative and misleading, disingenuous of whoever put it there, i thought you lot were better than this, obviously not, maybe delimiter has hired a news limited editor?

      btw, strange point about a business connection not needing a static ip address – or is the author so blinkered that because their “business” is so small that they dont need one then no one else could possibly ever need that.

      are these plans called smb plans or business plans hmm?

    22. Sathias
      Posted 09/11/2012 at 9:54 am | Permalink |

      Playing a bit of Devil’s Advocate here, but is this all that different to software which charges a different price (or being free) depending on whether its for home use or business use? As a provider, supplying a service to a business is inherently more risky because if there is a technical issue, you may be liable for lost income, whereas for home use this is not the case.

      I can certainly see the converse argument, but it is hardly new that people are asked to pay more when they are using a product or resource for making money.

    23. Shane
      Posted 09/11/2012 at 10:05 am | Permalink |

      And here I was naively hoping that the NBN would dissolve all this consumer\business bulls**t that ISP’s use to gouge the hell out of every business owner in this country.

      The truth is that the ISP’s simply cannot help themselves. Their greed has been accepted for too long and is too ingrained into their culture.

      We’re just about to open 2 new sites in Sydney which will be connected via AAPT into our existing IPVPN that reaches out to all our sites – and back to our datacentre. Pretty standard approach that many businesses, with a wide geographical footprint utilise.

      The 10mb\10mb service will cost us around $1100 per month which when you know that if it wasn’t a business address, and 500m up the road, a house can be connected to Bigpond’s 25mb cable service for under $100 a month – and have 200Gb of bandwidth (our total amount, company wide) all to itself, so any numpty can see that ISP’s here take Australian businesses for a ride.

      It’s a complete joke, yet we continually let ISP’s strap handle bars to our backs and let them scream yehaah!!! all the way to the bank.

      Sure, there are tight SLA’s with business services, but if the internet connection for an office is down for a few days – who cares? Most staff can just work from home these days and that should be the default plan between the business and their IT department. No point sitting around in a ‘dark’ office for 2 days while a DSL service is restored these days…

      Anyway, I really hoped that the NBN would make the split between consumer and business products obselete so it’s disappointing to see ISP’s continue with this outdated approach. So far also – in my opinion – the pricing is at least 30-40% higher than was I was anticipating.

      So based on speed and bandwidth alone, i’m not convinced. ISP’s will have to do something special to convince me to switch to it.

      • Soth
        Posted 09/11/2012 at 10:39 am | Permalink |

        Imagine if Banks where ISPs *shivers* :(

      • Posted 09/11/2012 at 11:13 am | Permalink |

        @Shane

        These are NOT proper business plans. These are consumer plans, called business plans by the RSPs. NBNCo. have yet to launch their business products for fibre.

        They will be:

        5/5- $100 a month
        40/40- $200 a month
        100/100- Unknown as yet (guess at $450 a month)

        That’s the AVC charge. Then there would be Traffic class CVC the RSP would have to pay for that POI to guarantee a certain amount of business traffic at all times.

        I’d guess at retail prices for business of $250, $500 and $800 respectively (depending on quota required of course). So that means, even on 100/100, you’d be paying less than now. That of course would be relative to your SLA as well- if you needed 99.999% uptime, compared to 99.99% (which is what the NBN fibre as a whole is based on) you’d be paying more obviously.

        I agree these plans are a rip-off, but they aren’t business plans- they’re just consumer plans with “Business” slapped on the front and “support” added. But it’s no different to what ISPs have been doing on ADSL. They make extra money by conning the gullible SMB owner into products they may very well never need (like full support or Static IP). Some may, but I’d say many won’t.

    24. Matti
      Posted 09/11/2012 at 10:36 am | Permalink |

      Renai, there are many hosted PBX solutions on the market than can and will be delivered over any decent IP connection yes even the NBN. Telstra, Optus etc etc all have offerings. DO your research mate.

    25. Posted 09/11/2012 at 2:55 pm | Permalink |

      Hey Renai
      Really appreciate all the hard work you put in on Delimiter.

      As others have pointed out there are a few virtual IP PBX & SIP offerings on the market. Telstra’s has been on the market for almost 10 years now – aka Telstra IP Telephony (TIPT).

      A great feature of these services is that the support better quality calling (HD voice, and video) if the end points support these features; dial a number and if the other end has a compatible device then you get a much better experience. This is the same if you call within your network; or between networks supported by the same service provider.

      But in an NBN Australia there is no plan to support this between customers on different RSPs. If you are a business using Telstra and call a business on Optus, then you get PSTN quality regardless of the intelligence at both ends.

      While everyone is excited about upgrading the access network it’s sad that no one is thinking about upgrading the intelligence that links us all together (the phone system).

      There are moves overseas to move beyond PSTN. Check out the Voice Communication Exchange Committee:

      http://vcxc.org/index.html

      And also AT&Ts plans to move beyond PSTN:

      http://gigaom.com/2012/11/08/the-end-of-landlines-no-phone-numbers-and-no-international-calling-charges/

    26. bob
      Posted 12/11/2012 at 2:10 am | Permalink |

      All the SLA’s in the world won’t help if you FTTP connection gets wiped out when someone takes out the power pole they are connected to.

      • Posted 12/11/2012 at 6:39 am | Permalink |

        @Bob

        Actually, if a business is that concerned about having no downtime, they have the opportunity to buy their own redundancy in the form of a second GPON or even PTP link from a separate FDH. This would mean 2 geographically unique connections and if one goes down, you still have the connection.

        This is eminently possible in the NBN with all their spare fibre design- it would cost on $2000-$3000 with the NBN in, compared to the $20000-$30000 now, minimum.

        • bob
          Posted 13/11/2012 at 5:01 pm | Permalink |

          notbad.jpg

    27. Dean
      Posted 12/11/2012 at 9:02 am | Permalink |

      Of all the “business-grade” features, I’ve only ever seen a need for a static IP address.

      Currently, I’m with Internode and they have a “Power Pack” which is $10/mo for a static IP address, free uploads and faster excess shaping. I think I prefer this model, actually, where you buy the basic service and then pay extra for the features you want. So if you want a better contention ratio, that’s $10/mo extra. If you want a static IP address, that’s $5/mo, etc. I think that would be a better model than a nebulous “business plan” where you’re not really sure what the extra is for.

      Actually, it kind of annoys me that ISPs charge for static IP addresses, since an IP address is free and they pretty much have to have a 1:1 relationship between IP addresses and customers anyway (maybe not so much back in the days of dial-up). But that’s a rant for another day :)

    28. Clive
      Posted 13/11/2012 at 4:38 am | Permalink |

      Exetel don’t offer NBN business plans like they do for their business ADSL. http://www.exetel.com.au/bga-uptime-sla.php

      They do offer business phone plans that would happily sit ontop of NBN http://www.exetel.com.au/smb-voice-main.php

    29. Jade
      Posted 28/05/2013 at 12:59 pm | Permalink |

      The best plan I have used for the NBN currently is Optus, I have been seeing some great results from them on my home network – https://www.optus.com.au/shop/broadband/nbn/plans
      My work has been using Macquarie Telecom and has been seeing some good results sure they are on the higher side of the market but a good business option: http://www.macquarietelecom.com/corporate/data-voice/nbn for bigger business.

    30. Bob
      Posted 19/06/2013 at 6:43 pm | Permalink |

      Taking up on the original point of the thread ….there are companies out there having a go at putting NBN and Business Phone services together. I have bee speaking to telstra for about 3 months trying to get Digital Business Plans explained. No one ..and I mean No one at the 2 Telstra Business Centres I have visited on 4 occasions have any idea how to price or explain how Telstra Digital Business works. Its so complicated its ridiculous. Same with the NBN…no one really understood how to make the order. I then happened to mention this to an IT person I have used from time to time and he gave me a contact. I rang them and had a price for a NBN Phone system in 20 minutes with up front and ongoing charges and system features clearly explained. Why cant Telstra do this? We signed with Telaustralia on a NBN 25/5 plan with 50gb of data $65 a month. 9 Cisco handsets and switch cost us under $3000 and the NBN was delivered and activated approx 3 weeks after we ordered it. http://telaustralia.com.au We really anted to stick with telstra …we have been with them for 7 years and have all mobiles with them…but we couldn’t get an answer.




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