news The nation’s largest telco late yesterday revealed it had completed the project of migrating all 18,000-odd copper telecommunications services in the South Brisbane Exchange area to the telco’s new fibre network, with the finalisation of the controversial project just around the corner.
Telstra has chosen to replace the copper connections to premises in the region as the exchange — where the copper cables terminate — is being closed in order to make way for the new Queensland Children’s Hospital in the area. The region is one of the first in Australia to receive fibre services to the home — but is not part of the Federal Government’s flagship National Broadband Network project, although the long-term plan is for the infrastructure to become part of the NBN.
However, over the past several years other major ISPs such as iiNet and Internode have expressed strenuous complaints about Telstra’s handling of the situation, with issues ranging from the company’s wholesale prices — which are claimed to be markedly higher than equivalent broadband prices on the previous copper network — to the lack of equivalent services such as the ability to stream IPTV services via multi-cast. Optus CEO Paul O’Sullivan has also added his voice to the complaints, but the ACCC has indicated that it is satisfied with Telstra’s response to the issue.
In a new post on its corporate blog late yesterday, the company’s Director of Fixed and Data Access Engineering, David Plitz, noted that after 18 months of work, Telstra had completed migrating the 18,000-odd services in the region to its new fibre to the premise network.
“The construction and migration aspects of the project have been completed ahead of schedule and we are on track to hand over the site to the Queensland Government in June this year,” Plitz wrote. “With migrations now complete, over the next five months we will be decommissioning the exchange and associated infrastructure, including the reworking of Telstra’s underground conduit network, the recovery of copper cables and the recycling of all scrap materials.”
During the progress of the rollout, Plitz wrote, Telstra trained around 120 technicians specifically on fibre to the premise technology, with 24 trainees starting “their telecommunications careers” in the South Brisbane area, and most continuing with Telstra after the finalisation of the project. Telstra laid 284km of fibre-optic cable in the project, laid 26.4km of “new conduit” and replaced or upgraded 1661 pits which give access to the cables.
“For anyone located in the South Brisbane exchange area it will be business as usual from now on as connections, disconnections and faults on the new network will be managed directly with their telecommunications service provider,” wrote Plitz.
“On behalf of Telstra I would like to thank the South Brisbane community. This has been a unique project for our team and we appreciate the co-operation the community has shown in helping us to deliver their new fibre network and connecting their new equipment. The project is moving closer to achieving the original objective of ensuring the new Queensland Children’s Hospital can be provided and completed as planned.”
opinion/analysis
Now that Telstra has finished its fibre migration in South Brisbane, one wonders when or whether the infrastructure will be transferred into NBN Co’s ownership. You may remember that the negotiations under which the pair were discussing NBN Co taking over South Brisbane’s fibre were outed in late 2011, when Telstra and NBN Co wrote a letter to the Australian Competition and Consumer Commission about the subject.
“This is likely to include the sale to NBN Co of the fibre network built by Telstra in the South Brisbane exchange serving area, as well as terms and conditions relating to the provision of fibre services in that relevant area.”
With its own live fibre installations around Australia, it seems likely that NBN Co would be able to take responsibility for South Brisbane at this point; with 1,700 staff, you’d certainly hope it would be able to. And when it does, those residents and businesses in South Brisbane should be able to get access to much better broadband pricing and services than they can currently receive under Telstra’s stewardship of the network.
Take TPG’s South Brisbane plans, for example. The company currently offers only two plans in the area – one at 8Mbps, with 100GB of on-peak and 100GB of off-peak data, for $59.98; a price for which ADSL customers normally get unlimited downloads and speeds of up to 20Mbps; and a second plan offerings speeds of 30Mbps and 150GB/150GB of quota for $69.98. Wow. Pretty crap, eh? Did I mention speeds will be shaped to 256kbps after you run out of quota?
Considering Telstra’s South Brisbane infrastructure is technically capable of speeds up to 100Mbps and TPG normally focuses on unlimited plans, you’d have to say these plans from the telco are pretty poor; and we’re betting it’s Telstra’s underlying wholesale prices which are the issue here. It’s a similar situation with the other ISPs offering services into South Brisbane. Hopefully NBN Co can come in soon and fix up this mess, which has been boiling over for more than a year now.
My interest here is how similar the network topology Telstra put in place is to the network topology NBN Co designs into an FSAM.
If there is enough difference, at such time that it does transfer to NBN Co, it will be a non-standard group of FSAMs that will be treated a little differently in the whole scheme of things.
Certainly not insurmountable by any means, but will interesting to see how much Telstra decided to play ball or not.
The hardware in the network is from the same vendor and is identical down to the NTD (which is the slightly older one used in the Tasmania rollout). And its obviously a gpon network. It terminates at the Woolongabba exchange which is a NBN POI. Can’t see any problem with a quick integration, other than whatever price Telstra wants NBNco to pay (i kindof thought it was a state asset as the government subsidized telstra as they wanted the exchange site for a hospital).
That’s good to hear – I hadn’t heard a lot of tech specs on the South Brisbane rollout. As you say, price is now the consideration.
“which is the slightly older one used in the Tasmania rollout”
Isn’t that the one that NBNCo are replacing in Tasmania?
My understanding of it is that Telstra cooked the idea up before the NBN was an actual “goer” and it was basically an end run around it having to share it’s network with other resellers like it was forced to do with the copper. So it was pretty well a straight replacement of the copper without the ACCC saddle, not really an upgrade as such (as the relatively low speeds and caps, and high price show).
There you have the difference between a Gov business willing to accept 7% return, and someone who (quite rightly) wants to receive a commercial rate of return.
It’s wrong to feel that Telstra is ripping people off, they just want a normal rate of return on their investment.
From Memory TPG has a NBN plan of 12/1 Data (unlimited) + Phone (unlimited national land calls) for $70 which blows the entry level plan they can offer in South Brisbane out of the water.
“It’s wrong to feel that Telstra is ripping people off, they just want a normal rate of return on their investment.”
It’s not wrong at all. Ask yourself why the other ISPs are not able to offer anything like the value that they offer on ADSL (consider speed/quota/features) but that Telstra can offer the same Bundles in both cases (with Telstra using their max speed (100/5 Mbps).
Stifling the competition in this way is surely “ripping off”. Their retail division can pursue whatever rate of return they feel they can achieve. It’s wrong that their are assisted to do this by the assistance of their “wholesale dealings” .
“Ask yourself why the other ISPs are not able to offer anything like the value that they offer on ADSL”
Because they do not have to pay the cost of providing nor even the full cost of maintaining the copper network infrastructure they use for ADSL.
Disclaimer, I own Telstra shares, the price of which included the cost of purchasing that copper network.
“Stifling the competition in this way is surely “ripping off”. ”
Every telco has (prior to the NBN) had the right to install their own infrastructure. Very few chose to actually do so. You even had the rediculous situation where Optus preferred to provide broadband via adsl rather than utilise their own HFC cable running past the front door because it was cheaper to use Telstra’s infrastructure than their own (until the NBN of course because they will now get PAID to swap customers to the NBN).
Disclaimer. I own Telstra shares but being biased doesn’t automatically make me wrong.
Of course, Telstra would never use its effective monopoly to rip anyone off.
There is a difference between “normal rate of return” and price gouging because you have the opportunity. Telstra has spent its relatively brief time as a privatised entity doing the latter, and arguing details with the ACCC and its competitors.
And if the Coalition gets into power, it is likely that whatever exists of the NBN will end up like this – a monopoly owner being able to charge what they like.
‘And if the Coalition gets into power, it is likely that whatever exists of the NBN will end up like this – a monopoly owner being able to charge what they like.’
Well only if the ACCC is dissolved when the Coalition get in, monopoly infrastructure whether the present Telstra copper, NBN Co FTTH or Coalition NBN Co FTTH/FTTN post 2013 election win comes under ACCC access and pricing control, there is no ‘being able to charge what they like’.
That’s the thing isn’t is…. the NBN has the NATIONAL interest at heart with a reasonable Roi. Private want more Roi and dont give a shite about national interest. And you only have to look at Telstras old velocity plans and what happened when opticom started offering plans to see what a rip off they try and be with their monopoly. Lets just say that its not even a 15% Roi they aim for, but likely double.
“It’s wrong to feel that Telstra is ripping people off, they just want a normal rate of return on their investment.” – Paul Krueger
As a person whose copper was pulled from under their feet in South Brisbane, I couldn’t possibly disagree with you more. At the end of the day I was offered less service for more money. What’s more, those wankers demanded a 12 month contract! I literally had no choice, either take it or have no internet. How could someone not feel like they were being ripped off? How would YOU feel?
@mo
Pretty angry. But I think what he was getting at is that Telstra are simply doing what is best for their shareholders. They haven’t been a “national comms provider”, in the Nationalised sense, for coming up on 2 decades now. It isn’t their job to see the country connected. It’s their job to connect and provide services to those who pay. And if the government pays them to connect people at a lower price to the customer, they do it- but the most basic job they can to maximise profit. Like any company.
Thankfully, we have the NBN coming which, while removing the copper (in 93% of cases), will allow people the choice of having the same service, but CHEAPER if they wish, just over a different medium.
Fibre? Pffft As if you would do that! Clearly truncating the copper to create FTTN is the ideal solution to remove the exchange. Telstra must be Labor fanbois brainwashed by biased media like Delimiter. What will their shareholders think when they realise 43 BILLION cents of their mum and dad shareholding value has been wasted!!
Lol :)
Telstra DID do that..!
Its a prelude to what could happen if the current NBN is “stopped/paused” or interfered with in any way. If Telstra gets the NBN in its greedy little hands, watch out..!
I’m more concerned with the fact that Telstra indiscriminately ripped up the copper and closed the exchange forcing these poor Brisbanites onto fibre without giving them a say in the matter. What they should have done is roll-out the fibre but leave the copper and the exchange so people can choose if they want to connect or not.
Also as to whether this fibre is transferred to NBNco or not I’ve come to realise it is mostly irrelevant however it certainly would be telling if Telstra wanted to keep it. One would assume they think it has some value and money CAN be made from it so I dont have to point out the obvious to all here ;-)
What they should have done is roll-out the fibre but leave the copper and the exchange so people can choose if they want to connect or not.
The exchange is being demolished to make way for a hospital. That’s the whole reason they went ahead with the upgrade in the first place.
“The exchange is being demolished to make way for a hospital.”
That’s a lame excuse. They can move the exchange. Point is you need to keep the copper to give people a choice if they dont like the faster speeds on fibre. It is imperative I’m told.
No it’s not a lame excuse it’s what actually happened, the QLD Government wanted the old exchange site for a new hospital and asked Telstra to move to a new location, the contract was between Telstra and the QLD Government, you could argue why wasn’t it between the NBN Co and the Labor Bligh Government with compensation paid to Telstra for the old site – it wasn’t.
Stop your whining. Your ill-informed input was not requested nor is it required in this debate.
Haha… I think the sarcasm was lost. Not sure how. It was a pretty clear dig at the liberal rhetoric.
“That’s a lame excuse. They can move the exchange.”
Easier said than done.
All roads lead to Rome and all cable lead back to the Exchange.
Acquiring a new location in a heavily built up area like this is nigh on impossible.
Re-routing cables to the new location is massively expensive.
A fiber solution on the other hand allowed them to move the “exchange” to wherever they want, within reason, distance is not a factor in fiber. Logically it would be moved to a major switching centre likely to become an NBN POI or at least have backhaul already in-place to a POI.
In a nutshell, new cabling is expensive, only an idiot would put in major new copper routes when they have the option of optical.
“Acquiring a new location in a heavily built up area like this is nigh on impossible.
Re-routing cables to the new location is massively expensive.”
Indeed it would have been silly to move the exchange and reroute copper given the option of fibre. I didn’t mind the fibre. No one is intrinsically attached to the copper. BUT what Telstra *should* have done was simulate ADSL over fibre or provide an equivalent access regime so that existing Internet plans and carrier-customer relationships could be continued without hiccup.
@mo
Simulating ADSL over fibre is, please take no offence, a stupid idea. Fibre is a completely different beast and trying to sell it like ADSL is pointless. You have complete freedom to sell it however you want (by speed and quota, or by either)
There is NO reason Telstra couldn’t have offered the same or very similar pricing and wholesaling to what NBNCo. are doing. Except of course it doesn’t offer them as much profit.
That’s the only reason their fibre is worse- because it makes them more profit. FTTH is FTTH (well GPON is anyway which is what Telstra have run with). The only difference is wholesale costs. That’s where Telstra have chosen to screw you guys and make their money charging higher wholesale and specifically limiting speeds by doing so. And until the NBN is complete, I doubt you’ll see a difference- I don’t think South Brisbane will be put under NBNCo. control any time soon :(
@seven_tech
I didn’t mean reproducing the actual ADSL signal over fibre (is that even possible?) but rather emulating the parameters of the connection so that the end user doesn’t notice a difference. E.g. 24/1 mbits with multi-casting and whatever pricing/quota the ISP already had. This would have allowed everything to go along as usual without end users noticing or caring, except that they no longer need line filters for their phones.
As you say, they *could* have done that. But they didn’t. Instead they used this as an opportunity to bump up prices making existing plans/contracts economically unviable. TPG told me I could either have my quota slashed or leave. The disruption gave them Telstra perfect opportunity to spruik their own Internet service. Which they did enthusiastically, I can tell you that.
Was this downright evil? Maybe not. But definitely consumer hostile.
“In a nutshell, new cabling is expensive, only an idiot would put in major new copper routes when they have the option of optical.”
Indeed. Well you’ve convinced me goresh ;-)
How do you “move an exchange” other than to demolish the old one and build a new one from scratch? You can hardly jack the thing onto a fork lift and drive it up the road with the street cables and ducts magically stretching as required.
Nonsense Brian. Obviously you’ve never seen ‘Monster Moves’, they can move a 900-ton brick building so a pissy little exchange should be a piece of cake. This would be preferable since it is essential premises keep old copper connections just in case people want to switch back to it from fibre. There are loonies out there and they NEED to be catered to as well. Don’t discriminate. Don’t be a hater. Give copper and fibre equal treatment in our society too. Love the fibre, love old copper! Peace and love!
Oh, if you saw something oin the telly, I can’t argue against such conclusive evidence as that.
All of the cables from the suburb pop up at the site where the exchange was. Even if you moved the building’s contents, you cannot get around the fact that the cables are in the wrong place. The ONLY alternative is to rerun them. The only choice is whether they use copper or fibre.
If you don’t like people being forced off copper, go tell you beloved NBN Co. You cannot criticise Telstra for doing the same thing you applaud NBN Co for doing without looking like a goose.
Brian, GPON means that the head-ends can be put into road-side cubicles and Telstra only need to then run bearers back to the Wooloongabba exchange, which I am sure were in place to feed South Brisbane to begin with.
GPON simply pushes equipment that was at the exchange like DSLAMs and POTS racks to the house in the form of NTDs. Telstra avoid the need for large battery banks, diesel generators etc — the obligation is no on the homeowner to provide un-interrupted power. At least the Optus HFC phone system provided its own power!
As others have said, why does Telstra require a phone service for you to get internet? Why no ‘naked’ fibre? This is the sort of thing that the ACCC should be looking at, as well as the woeful speeds. 100Mb/s down and only 5Mb/s up??? WTF? NBN offers 100Mb/s down and 40Mb/s up, or 25/5. Telstra are screwing the customers over.
“If you don’t like people being forced off copper, go tell you beloved NBN Co. You cannot criticise Telstra for doing the same thing you applaud NBN Co for doing without looking like a goose.”
So brian, you know I am in favor of the NBN and by default most likely do not give a shit about the copper (it’s true I dont) maybe you can add it all up now… let’s see those cogs turn (Hint: I was being facetious)
Oh yeah but thanks for this little tidbit of a quote. I will save it. See that is so true what you have said and the opposite is true too; you cant applaud (or turn a blind eye) to what Telstra is doing in Brisbane while criticising NBNco for essentially doing the same thing without ‘looking like a goose’ either.
I am not doing the reverse of your inconsitency. I am applying the same principles to both. You just do not seem to like it when Telstra gets the same concessions you give the NBN. Maybe I should criticise the NBN for the same things you and other are criticising Telstra for.
“I am not doing the reverse of your inconsitency.”
yeah, brian 1. Never said you were, will keep the quote regardless. Not for your benefit (perhaps I should have specified this) but you have to admit most of the anti-NBN crusaders are “gooses”. 2. Not being inconsistent here…
“You just do not seem to like it when Telstra gets the same concessions you give the NBN.”
Sorry that makes no sense whatsoever. Telstra can rip up all the copper they like. I’m in favor of ripping up the whole rotted out network and replacing it with fresh fibre. That is why am am in favor of the NBN. If Telstra want to expedite that for whatever reason I’m all for it. Hope that helps.
“Maybe I should criticise the NBN for the same things you and other are criticising Telstra for”
Tell me brian. What have I (seriously) criticised Telstra for here? Perhaps you still dont understand then meaning of the word facetious. As such I’m not sure what else to tell you other than to look up the word on dictionary.com.
Why didn’t Telstra use 4G Wireless?!??!! I’ve heard on Twitter that the future is Wireless so why did they even bother to use FTTH? WHAT A WASTE OF MONEY.
“I’ve heard on Twitter that the future is Wireless”
Only from people living in the dark ages.
“I’m more concerned with the fact that Telstra indiscriminately ripped up the copper and closed the exchange”
The land the exchange was built on was compulsarily acquired by the stae governemnt for a hospital expansion.
Telstra had no choice in the matter and I am sure they would have preferred to avoid the expense and heartache if at all possible.
Telstra was under no obligation to release the site to Queensland Health — it wasn’t resumed.
Why are the fibre acess rates so much higher than the copper access? Sounds to me like Telstra saw the opportunity to triple dip:
1. get the Queensland Government’s money for the exchange.
2. lock customers into the fibre network & restrict ISP choices
3. avoid maintenance costs with the old copper network.
Nice work if you can get it.
The ACCC looked at the deal and approved it, I assume they have access to more material to help them make that decision than you or I.
Same can be said about the NBNCo – Telstra/Optus deals…
So why do you believe the Telstra/ACCC tick of approval is ok and the NBNCo/ACCC one not?
While I understand your motivation behind trying to switch from the topic of this discussion the Sth Brisbane exchange to a off topic ‘let’s nail alain’ diversion, I don’t have any problem with the ACCC approval on the Telstra/Optus deals.
Alain you give yourself way too much credit.
It’s not about nailing you, it’s simply about trying to educate a few always negative people, and assisting them with evidence/fact (on this evidence based forum) to see clearer in relation to what many of us believe is an unhealthy obsession with hating at all costs, the NBN.
Those who for some unknown, strange reason, always talk down positive info (even inventing negativity that doesn’t exist).
Cool… so the NBNCo deal with Telstra and Optus are all bonafide, legal, rubber stamped and you don’t have a problem.
I now look forward to more positivity from you, in relation to the closure of especially Telstra’s obsolete infrastructure and migration of customers to the NBN, as you no longer have a problem with the deal(s).
Have to agree here. Whilst it is nice to hear opposition opinions, you cannot say the ACCC is right in one instance and wrong in another without calling its entire credentials into account. Rubber stamped is rubber stamped or its all bogus and the privates are bad.
“Telstra was under no obligation to release the site to Queensland Health — it wasn’t resumed.”
The fact that Telstra chose to comply with the “request” rather than fight a legal battle they were sure to lose doesn’t really have a lot of bearing on the outcome.
The exchanghe sits in a loacation the Mater Hospital NEEDS. Telstra could have fought (and most assuredly lost) damaging it’s corporate reputation in the process (Telstra fights construction of childrens hospital) OR they could negotiate a settlement that allowed them to minimise the cost to the company,it’s shareholders and it’s reputation.
Since it was for expansion of the hospital, the government had every right to compulsorily acquire the site. If Telstra released it voluntarily, then it would have been only to avoid being pushed down the colmpulsory acquisition path. In fact, I an not sure it wasn’t compulsorily acquired. Either way, Telstra would have had no choice.
The money paid by the governement would have been the compensation for seizing an asset. If the government took your house, paid you for it, and you used the money to buy a new house, I am sure you would not regard your new home as a taxpayer asset simply because you used goivernment compansation to pay for it.
I am surprised at the number of people lamenting Telstra’s use of fibre when in every other post, these same people applaud NBN CO and Labour for rolling out fibre and continually belly-ache about how old a technology copper is. Please, come up with one story and stick to it!
Telstra is no more restricting ISP choices than NBN Co. They have infrastructure with its underlying cost structure that must be recovered. They have a set of wholesale prices that ISPs must reflect through to the end prices. This is exactly the same situation with NBN Co. Even NBN Co charges 50%+ more for fibre access than the ACCC price for Telstra’s copper. Of course fibre is going to be more expensive once the introductory offers and sweetheart deals end.
If you pull out copper, you do avoid the copper maintenance costs. If you put in optical fibre, you get optical fibre’s maintenance costs instead. The way many people talk, you’d think that optical fibre was some sort of magical, maintenance-free wonder material. It’s not. Nor are the electronic boxes that hang onto the end of the cable maintenance-free. Nor are all of the support systems that are needed to manage the electronic boxes that hang onto the end of the cable maintenance-free.
Given that under the NBN deal, Telstra would have been forced to rip out the copper had it installed it, why on Earth would any company roll out new copper? Had it built a new copper network, would those who are criticising Telstra for rolling out fibre now be applauding, or heaping scorn, accusing Telstra of being short-sighted and a slave to its copper network?
Brian, federally licenced telecommunications facilities can’t be resumed. The Qld Govt had to negotiate.
http://statements.qld.gov.au/Statement/Id/71664
“Federal legislation prevents the State Government from resuming this telecommunications asset under these circumstances,” Mr Lucas said.
It seems odd that the ‘costs’ Telstra Wholesale are charging are so much higher than for copper. This is odd because they no longer have the overheads of maintaining the exchange or the grotty old copper cables. Why are ISPs being charged so much more to send data down the fibre than down a copper cable?
“Brian, federally licenced telecommunications facilities can’t be resumed. The Qld Govt had to negotiate.”
Okay, so Telstra could have said “no”? I’m sure that would have gone down well. Regardless, whether Telstra was forced it was being a good community citizen is irrelevant. The money they received was compensation for an asset handed to the government. Unless the Qld government stuffed up, the compensation would have covered the cost of the asset lost, not the cost of the replacement.
First, the copper prices are dictated by the ACCC with a view more to competition than Telstra’s cost recovery. Comparing a regulated price with one based on cost is not exacly balanced. The fibre and the equipment behind it is new. If Telstra, NBN Co, or any other carrier for that matter must build infrastructure to support resellers, then it is fair and reasonable for those resellers to pay for it.
The ACCC’s approach to setting monopoly prices is to cover costs and have a reasonable return. The same goes in the power industry where the poles & wires are a natural monopoly. The power companies get their revenue based on their asset base and the AER’s (part of the ACCC) determined Weighted Average Cost of Capital (WACC).
Telstra are not losing money with the copper access arrangements. They are not making full commercial returns either because they are not exposed to full commercial risk. This is where wholesale &retail differ greatly. Regulated prices are ALWAYS above cost. If they weren’t then a company would walk away from the asset.
It’s time that Australia followed NZ’s lead and insisted on structural separation of wholesale & retail functions. It is not acceptable that Telstra can insist on certain products if customers want others. It’s a bit like the only servo in a town saying you can only buy petrol if you contract to buy your bread & milk from them too (at a much higher price than the supermarket).
@Brian
Of course fibre is going to be more expensive once the introductory offers and sweetheart deals end.
What deals? Sure, if you go Skymesh you get 1 month free trial. But even their normal fibre prices after that are lower than ADSL for both 12/1 and 25/5. Do you have any evidence that these plan prices will suddenly spike in price? In fact, while there are less people on the NBN they should be MORE expensive, not less than when they get more people on it. You’re argument doesn’t appear to make sense.
And regarding Telstra and fibre- of course they’re entitled to put fibre in. The maintenance costs are about 1/5 of copper. They’d be stupid not to frankly. What people are objecting to is the fact that while like the NBN (eventually) they no longer have the choice of copper (not that you’d want it- its far inferior) their choice on the fibre, unlike the NBN, is SIGNIFICANTLY more expensive than ADSL. So for those who want a basic service, its considerably more expensive.
Telstra got a subsidy from the government to move the exchange and migrate customers to the fibre. Telstra SHOULD have passed those savings onto customers and charged reasonable wholesale costs so those who want basic services don’t pay more. Instead they pocketed the extra and charged more AS WELL. That’s why people are complaining. You don’t have that issue on the NBN.
Skymesh is offering $29.95/month deals on an access that is costing them $24/month per AVC plus more for the CVC depending on their dimensioning. Even if they underdimensioned the CVC and gave a crappy service, they would be lucky to make a profit after adding overgheads such as billing, support, and maintenance. If you think this sort of thing is sustainable, you are off with the fairies. Long term, Skymesh has one of two options – jack up the prices or go broke.
So, why would they and others do this? This addresses your second mistake. As the NBN rolls out, RSPs are going to do everything they can to get customers. There is a natural intertia that means that as long as a company doesn’t screw a customer up too much, they will stay with that company. Many of Telstra’s customers are there simply because Telstra hasn’t stuffed them up too much, not because they think Telstra is doing a wonderful job. With the NBN cutting off their copper, they are going to be forced to do something. That is a golden opportunity for RSPs to make a play for customer numbers. The nice thing for the RSPs is that this same inertia allows them to jack up their prices without losing too many customers.
So, as the NBN rolls out, the smart RSPs will be offering the sweetheart deals to capitalise on the forced change that all consumers are going to have to make. The large ones will be able to bundle content and services in an attempt to build attractive packages to grab customers. The smaller players who have nothing but internet access to offer have no option but to compete on price. Skymesh are attempting this by offering a $10 discount if you bundle your phone with your internet access. It is worth noting that there is not a lot of information about the phone service such as its rental.
“The maintenance costs are about 1/5 of copper.”
Evidence? After all, you were insistant that I provide evidence for something that is nothing more than simple mathematics.
The NBN access is 50% more expensive than ADSL ($24/month vs $16/month). How much more expensive does something need to be to qualify as “significantly” in your book?
“Telstra got a subsidy from the government to move the exchange and migrate customers to the fibre.”
No it didn’t. Telstra simply got paid compensation for a lost asset. As it had an obligation to provide services to the people of South Brisbane, it would have had little choice but to put that money towards the rebuild.
“Telstra SHOULD have passed those savings onto customers…”
I would love to see the internal Telstra documentation you obviously have that proves that the rebuild cost less than the compensation.
“…and charged reasonable wholesale costs so those who want basic services don’t pay more.”
Good point. Take it up with NBN Co who are also charging for internet access on top of the basic phone service for thjose who want only the phone.
“You don’t have that issue on the NBN.”
Actually, the NBN has exactly the same issues. You don’t seem to have an issue applying double standards.
@Brian
Skymesh is offering $29.95/month deals on an access that is costing them $24/month per AVC plus more for the CVC depending on their dimensioning.
And you’ll notice 25/5 plans are $10 a month more expensive, while only being charged $3 a month more for AVC. It’s called knowing your market- they get the cheap as chips end of the market by providing base, stuff all quota, so they don’t have to provide much CVC. Then, as they go up, they get more and more profit per tier. Also, while CVC might make up 20% of the per premises cost under 1000 premises, over 10 000 premises it makes up just 7% of the cost. So NOT dollars per premises. Tens of cents.
such as billing, support, and maintenance
That’s funny, cause everything I’ve read from people on SkyMesh say they bend over backwards to help people. Billing?? They get an invoice from NBNCo. per AVC CVC. Skymesh split that up (by database) into per customer billing. Done….wow, that was hard and uses SO much computing hardware… Support? That’s done primarily via VOIP or remote desktop. No issues there. Maintenance….what maintenance? The only thing they own is the POP switches and their servers. Both require minimal human input and work 24/7 for months at a time without needing even basic cleaning.
Long term, Skymesh has one of two options – jack up the prices or go broke.
Nope. Long term SkyMesh are expecting EXACTLY what NBNCo. are predicting- increasing use of data. They charge the same to customers, with more quota or bonus/unmetered quota for IPTV etc. and NBNCo. charges them LESS for the data throughput. They make MORE money the further up the tiers people go.
The nice thing for the RSPs is that this same inertia allows them to jack up their prices without losing too many customers.
Nope. Not on the NBN where changing is as easy as “you suck….ring ring….new service please….”1 hour later, done. ISPs bank on the fact that it’s a pain in the neck to change ADSL provders. And EXPECIALLY phone providers. Neither are an issue anymore on the NBN.
Skymesh are attempting this by offering a $10 discount if you bundle your phone with your internet access. It is worth noting that there is not a lot of information about the phone service such as its rental.
It’s called VOIP. Iinet have been doing it for a decade. I’ve been using it for 8 of those years. Works perfectly and gives me double the quota and $5 off a month. Costs SkyMesh (iinet in my case) diddly squat to provide it. It’s basically all profit.
Evidence? After all, you were insistant that I provide evidence for something that is nothing more than simple mathematics.
Firstly, apologies, I was getting my costs mixed up. Maintenance is about 1/3-1/2. POWER costs are about 1/5.
http://www.telmarc.com/List_By_Date/2006%2009%2001%20FTTH%20Capital%2001.pdf
Fiber plant- (backhaul)The fiber maintenance costs are about 0.5% of total fiber plant capital per year.
Fiber Electronics- (OLT’s) The costs are about 3%-4% of the installed base annually.
Significantly lower than copper.
http://www.awt.be/contenu/tel/res/FTTH-Business-Guide-v1.pdf
Has some good figures too, including the possibility of a 3-5 fold decrease in power consumption. Power consumption drops from 24w per premises (average) on copper to 7w per premises (average) on FTTH. Over 9 million customers, that’s 15.3MW. That’s MILLIONS of dollars a day.
The NBN access is 50% more expensive than ADSL ($24/month vs $16/month). How much more expensive does something need to be to qualify as “significantly” in your book?
That is ENTIRELY misleading- only 650 000 customer use ULL (naked ADSL)- look it up on ABS. The other 6 Million customers on ADSL have line rental charged. Which puts that WAY above the NBN in costs (over $30)
No it didn’t. Telstra simply got paid compensation for a lost asset. As it had an obligation to provide services to the people of South Brisbane, it would have had little choice but to put that money towards the rebuild.
And you don’t think the government didn’t expect Telstra to do so? They’re required BY LAW to provide a voice service. They certainly weren’t going to do that via NextG and copper would’ve been stupid. It was, essentially, a subsidy to provide them with upgraded landline technology as the government needed the land the copper infrastructure was based around. And you don’t think Telstra saves thousands of dollars a day on maintenance as WELL thanks to that??
I would love to see the internal Telstra documentation you obviously have that proves that the rebuild cost less than the compensation.
What rebuild?? They simply rolled out fibre, just like NBNCo. are doing. There was no “rebuild”. All the infrastructure was still in place- pits, pipes and ducts- the physical location of the Termination equipment just changed. And it’s a HELL of a lot smaller than the exchange now- another saving to Telstra. And don’t start on “oh, it all runs to a central location, so they would’ve had to have ripped everything up” In an area like South Brisbane there would’ve been ducts EVERYWHERE. It’s just a matter of designing the system around them. Fibre takes up less physical room than copper too in ducts.
Good point. Take it up with NBN Co who are also charging for internet access on top of the basic phone service for those who want only the phone.
I’m sorry, you must’ve missed the part that the government requires there be a “standard phone” service, just like Telstra Homeline Budget, for the same cost -$22.95, for those who want it. The rest get significantly reduced internet and phone costs ESPECIALLY when bundled together using VOIP. No longer will people be paying Telstra $150 a month for phone calls.
Actually, the NBN has exactly the same issues. You don’t seem to have an issue applying double standards.
Really? So ALL those RSP fibre plans out there that are CHEAPER (by dollars, not cents) than an equivalent ADSL service are fictional, are they? Iinet? Internode? SkyMesh? iPrimus? ALL have cheaper 12 and most 25Mbps than the equivalent ADSL package. AND you don’t have to get stuck with line rental if you don’t happen to be lucky enough to live in the 3 million premises covered by 3rd Party DSLAMs. While Telstra are charging MORE for an equivalent service on fibre compared, even to their OWN ADSL services. Yeah….NBNCo. has the issue….
@Brian
“Telstra is no more restricting ISP choices than NBN Co.”
While some of your post is agreeable, some of it is defintely not. But let’s just look at a simple question. Why do you think that Telstra is able to offer the same Bundle plans in South Brisbane at 100/5Mbps at the same costs as they offer them for ADSL in copper-fed suburbs? Why do you think it is that none of the other ISPs are able to go close to matching the price/value of their general ADSL plans to what they offer for their South Brisbane (Telstra Fibre) plans?
TW South Brisbane Exchange FAB-L2IG pricing is not a secret:
http://www.telstrawholesale.com.au/download/document/cra48-fab.pdf
Of course on top of the tail pricing (Part C1) you need to add the GigE or STM1 access charges as well as the VLAN/AGVC per Meg charging ($33.65/meg ACCC declared).
Regards,
Douglas.
Actually Renai it wouldn’t surprise the South Brisbane Exchange is actually specifically EXCLUDED from the NBNCo. takeover requirements until the NBN is complete.
It would makes sense for Telstra to have made that a condition of the deal- gives them a few extra millions over the coming decade.
This is only speculation. I’ve really no idea.
So what is the take up rate of FTTH in South Brisbane then?
Don’t tell me its close to 100% as I know people don’t want FTTH and its a white elephant.
Seriously though, I do feel sorry for people who have to pay the ridiculous amounts of money every month for Telstra’s FTTH.
“So what is the take up rate of FTTH in South Brisbane then?
Don’t tell me its close to 100% as I know people don’t want FTTH and its a white elephant.”
You make it sound like it was an option. Clearly you aren’t a resident. Anyone who didn’t connect to FTTH is either without internet now or they are making do with a wireless or mobile service.
@Jeremy2
Which was exactly his point I believe.
The NBN will be the same 18 months after FSAM switch on- you either go on the NBN or wireless for you!
Hence why it WON’T be a white elephant.
@seven_tech
Even if I read his post again, I still don’t take it as anything other than anti-NBN / anti-FTTH. He says FTTH is a white elephant and you say it is not.
I actually have no idea what either of you are trying to convey then. Do I need to have been reading many of your other posts to understand your context?
@Jeremy
I think you’ve read it too literally- his sentence:
Don’t tell me its close to 100% as I know people don’t want FTTH and its a white elephant.
Was said in sarcasm. As in we DO want FTTH and of course it’s close to 100%.
@seven_tech
ok then, I still don’t read it that way but am not up with the stance of posters here. So thanks for the clarification.
As a resident of South Brisbane Exchange (former) area, my opinion is that the fibre is brilliant. Usually up around the 100/5 advertised speeds. But I really want this FTTH network to transfer to the NBN so that the competitors don’t have Telstra hands around their throats and so there is genuine price and feature competition. Imagine a world where the pitiful upload channel of 5Mbps is able to by 40Mbps and therefore not anywhere near the threat of stifling the download speed because the upload speed saturates.
A guy at work is unfortunate enough to be in a new housing estate in Sydney that gets Telstra velocity broadband. Beside the insane pricing for internet acces, he HAS to have a phone line as well. Will Telstra ever stop gouging customers?
When ever I hear someone following Bullturns line of private companies building the infrastructure I just highlight what Telstra velocity customers are getting and the awakening of what a LNp NoBN could be like starts to dawn on them
I’m a long time resident of South Brisbane, and I’m currently investigating my options for Internet, and options for moving house.
http://www.nbnco.com.au/rollout/rollout-map.html?icid=pub:hme:rollout:hro:img right now says that the South Brisbane area is classified as “Construction commences within three years”. If the current Telstra fibre infrastructure in South Brisbane is indeed NBN compatible, it’s sold to NBN Co. as has been planned, and considering that the South Brisbane fibre goes to an NBN POI, I would guess that “construction” might be over really quickly.
Assuming that “construction” takes the same 12 months that it has been taking elsewhere, that might be a four year wait for NBN Co. to “fix up this mess”. On the other hand, I would guess that since there is a “Construction commences within one year” classification, those in the three year classification can’t be expecting construction to commence any time in the next 12 months. So the best that might happen, purely theoretically, is “construction commences” in 13 months time, and is finished the same day. NBN construction in this case might just involve some paper work and pushing a few buttons.
So, my best guess is that South Brisbane gets NBN anywhere between 13 months and four years. However, the federal election in September might change all that. At the end of this year it might be entirely possible that no one else is getting FTTP, and South Brisbane’s Telstra fibre is as good as it gets. That sounds really bad, even for us South Brisbanites.
My conclusion – I’ll wait a year and investigate things again, but for now I’m staying right here. Though I may change ISPs. Switching to NBN will be cheaper AND faster at the prices I’m seeing at the moment, but there’s no NBN in South Brisbane.
I’m not sure where you really get (up to) 4 years from. For my address, the website says “we will commence construction in your area from Nov 2013 in phases with last construction scheduled to commence in Mar 2015”. Then again, I don’t understand how the last construction would be March 2015 because unlike a normal area where they have to do all the fibre infrastucture installation, this entire exchange area is already converted to FTTH.
My Telstra contract expires in Sept 2013 so I would be looking at the other RSP options then (NBN speeds, prices and features). I expect that Telstra will magically offer some better deal at that time to try to retain the abductees that they have now courtesy of the competitor exclusion tactics that they have used here.
The four years figure is my upper limit, based on “Construction commences within three years” plus the typical 12 months taken for construction figures that have been quoted in lots of places. So it’s the most pessimistic limit of “within three years” meaning “exactly three years”, plus somehow the construction ACTUALLY taking a full 12 months like it has every where else. Obviously my 13 month figure is the most optimistic lower limit, as I explained, with no actual construction needed. So that’s my spread, most optimistic to most pessimistic.
It looks like the web site is also giving you pessimistic figures, likely to cover their arses. But starting in November 2013 is “construction commences within one year”, which is not what the NBN Co web site said when I asked it moments before I typed my first post. It said “three years” for me. Just going with the best info I had. shrugs
It’s entirely likely to be somewhere in between. There is the possibility that the South Brisbane fibre is not up to the NBN standards, that NBN Co might take months to investigate it during the “construction” phase to figure out if it’s up to scratch, followed by 12 months of building NBN standard fibre (might be where your “last construction scheduled to commence in Mar 2015” might be coming from), and that the contract between NBN Co and Telstra involves a firm commitment to the sale that an incoming Liberal federal government can’t prevent.
My “wait until next year and check again” stance still covers the case of NBN Co starting construction in November, so I’m doing the right thing either way.
I just looked again at the NBN rollout map, and it’s now telling me that South Brisbane area is “Construction commences within one year”. The details match what Jeremy2 posted above. We have been upgraded since I last looked. B-)
Dunno why we got different results when looking 15 minutes apart, though perhaps I was unlucky and they updated just after I looked?
I enquired to the droids at NBN about my address and received :
“With regards to the address that you have provided , construction to commence within three years – we will commence construction in your area from November 2013 in phases with last construction scheduled to commence in March 2015. It is estimated that the average time from construction beginning to NBN services being available is 12 months. ”
That sounds like an answer for any area rather than one the is already fibre converted and just needs NBNisation.
It’s a Federal election year isn’t it? Maybe I’ll approach my Federal member to get a better and considered answer. Hmm…. who should I choose …. Graham Perrett or Kevin Rudd?
@Jeremy2
I think you’re being a little unfair to NBNCo. You need to understand how their network is put together. The network is built out from POIs. POIs cover anywhere between 75 000 and 160 000 premises in general. They are usually located in Telstra’s Exchanges as part of the Telstra deal. However, neither POIs NOR the FANs beyond them (covering between 10 000 and 38 000 premises) overlap directly on CURRENT Exchange areas.
What I’m saying is- your area, the South Brisbane Exchange makes up ONE part of a POI in Brisbane. That POI may or may not be finished yet (You can check out if it is on NBNCo’s latest POI update 3 days ago on their site) but WILL be by 2015, as that’s when all will be done. And South Brisbane exchange will NOT be covered by a single FAN. Therefore, to NBNCo, though you have fibre, you are just any other part of the network. But in your case, when they GET to your FAN, your area is likely to be switched on BEFORE the other areas as PART of a FAN (FSAM) as it is already fibred.
I’d just be thankful that, even IF it’s expensive, you already have FTTH. At least you’re lucky enough to be guaranteed it no matter the Election outcome.
So we have both had both answers. Think I’ll just leave it at “anybodys guess” and check again next year.
I have the new FTTP in Highgate Hill, but as I am with Optus I remain on the ADSL package I have been on for years. I must still be on copper aswell as noone has connected my fibre past my external house wall. Optus claims they dont know about any new FTTP in South Brisbane. As my optus ADSL is good I havent changed provider. Does anyone know if or when Optus will offer me the ability to connect with them? Their service division certainly doesnt. Other friends on South Brisbane are in an apartment with the new FTTP connection and tell me it still takes an eon to download movies from Itunes, never mind streaming. Any ideas?
@Verity
Telstra fibre in South Brisbane is specifically excluded from being included in the NBN fibre network, so they can offer wholesale at whatever prices they want. Several RSPs do offer Telstra fibre plans. I believe Internode is one:
http://www.internode.on.net/residential/fibre_to_the_home/south_brisbane/
Optus do not as far as I know. Telstra only provide 30/1Mbps and 100/5 solutions though, so uploads are appalling, but downloads should be pretty decent. In saying that, I don’t know their contention ratios etc. so that may be why your friends connection is bad, because they are sharing with so many other people and their connection speed drops in busy times.
Telstra fibre is not competitive. Fortunately, the NBN will HOPEFULLY force Telstra to drop their prices and provide better service in these areas. Because NBNCo. are unlikely to want to buy South Brisbane out.
However, in saying ALL that, you mustn’t be on the South Brisbane exchange. The South Brisbane exchange is ONLY fibre now (because the old copper exchange was demolished for the hospital) as of about 6 months ago and if you have copper, that means you’re on a separate exchange.
http://www.zdnet.com/au/telstra-completes-south-brisbane-exchange-copper-to-fibre-migration-7000010305/
So your friends are on the South Brisbane exchange. But you are not, because Optus do not offer copper broadband in the South Brisbane exchange. ALL homes in that exchange have fibre run to them if they want a service. You do not, therefore, you are not on that exchange.
“Because NBNCo. are unlikely to want to buy South Brisbane out.”
What is your basis for saying that? It makes sense that they would want to. It’s a way for them to pick up a large exchange area and add to their completed numbers quickly.
If I search on my South Brisbane Area address at the NBN site, it returns :
Area information
This is the NBN rollout activity in your area. Different stages of the NBN rollout can be in progress in your postcode at the same time.
Fibre | Construction to commence within one year – we will commence construction in your area from Nov 2013 in phases with last construction scheduled to commence in Mar 2016*.
It is estimated that the average time from construction beginning to NBN services being available is 12 months.
I am not sure it’s up to spec. Last I heard they didn’t handle multicast. Can someone confirm that?
That’s not an indication of buying them out. That’s an indication of migration, like any other copper area as Telstra want to move away from the high CAPEX and OPEX of landline provisioning. And its not clear WHAT will happen in South Brisbane. It is specifically excluded from the NBN Companies Act for migration. So we won’t know what’s gonna happen until close to when it does. NBNCo. will likely have to do a fair amount of work to homogenise South Brisbane into the NBN.
Its very unclear what will happen in South Brisbane at the moment. But what is clear is if Verify is on copper is that she ISN’T on the South Brisbane exchange.
I suspect I might have a possible answer for both of verity’s mysteries.
Highgate Hill is definately on Telstra South Brisbane Fibre, that’s where I am, and I got it. It was one of the first areas converted to Fibre in South Brisbane, and close to the centre. I don’t think it’s likely that anyone in this suburb is still on copper. However, when I churned from my old ISP some time after getting my Fibre, I discovered that the old ISP still thought I was on Naked ADSL2+. My old IPS does not have Fibre plans. Telsra, being Telstra, insisted that I needed a phone number, and the new ISP wanted to know what that phone number is before they could churn me. It was Naked ADSL, so I had no idea what my phone number was, since it was without phone service. I called my old ISP, and they told me that I was still on Naked ADSL2+, and they had no idea what my phone number is. I KNOW I’m on fibre, I saw Telstra put it in.
It’s entirely likely that like my old ISP, verity violet’s ISP still has them on record as being on ADSL, even if they have actually been switched to Fibre.
As for the speed issue, when I was still on my old IPS, that thought I was still on ADSL2+, I was still getting the exact same actual speeds I was getting from when I really was still on ADSL. Now that I’m on my new ISP in South Brisbane, an ISP that knows I’m on Fibre since that’s the plan I picked, I’m getting actual Fibre speeds, approximatly three times the old speed I had.
The old ISP did not have the infrastructure for Fibre, somewhere between me and them, my speeds where throttled to the ADSL2+ speeds that they can handle, that their records showed I was still supposed to be getting. Verity’s friends may be on an ISP that’s not suppyling them with full speed, like I was.
And yes, Internode does proper Fibre in South Brisbane, they are my new ISP.
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