iiNet stops selling NBN satellite plans

19

nbncosatellites

news National broadband provider iiNet has withdrawn its National Broadband Network satellite plans from sale, as the rapid up-take of customers on the service has resulted in a lack of available network capacity for new sign-ups.

The National Broadband Network Company started providing wholesale access to a nation-wide satellite service from July 2011, following the signing of two deals with satellite providers Optus and IPstar, worth $200 million and $100 million respectively. However, the company is not planning to start operating its own satellites until 2015, delivering significant capacity and speed upgraded.

In a statement issued this morning, iiNet, one of Australia’s largest ISPs and one of the earliest entrants to selling NBN services, said it had been forced to withdraw all NBN Interim Satellite plans from new sale, effective immediately. The decision also means associated brands Westnet and TransACT will cease new sales of all interim NBN satellite services. Existing iiNet Group satellite customers will not be affected by this move and will remain on their current services.

iiNet CEO, Michael Malone, said that, since its introduction 18 months ago, iiNet had witnessed high, ongoing demand for NBN Interim Satellite Services.

“At its peak, we had 500 customers signing up every week for our NBN satellite services. There is clearly a significant demand for higher quality broadband in remote Australia, and we’re absolutely gutted that we’ve had to withdraw this crucial service from sale,” Malone said.

With 42,000 people already connected to the NBN Interim Satellite, transmission capacity constraints are resulting in severe service quality issues. NBN Co, according to iiNet, has ruled out providing more transmission capacity for the existing satellite, which will be replaced with a higher-capacity satellite solution in 2015.

“iiNet is committed to providing high-quality broadband, so in order to meet our own customer service objectives, we could not continue to offer a service markedly below both our own and our customer’s expectations. During occasional peak periods the service was so slow as to be almost unusable,” said Malone. “As more people are added to the network, quality will only decline further. In the absence of any action by NBN Co to increase transmission capacity, I call on the rest of the industry to respect their existing customers and also cease sale.”

iiNet will investigate opportunities to move any of the 8000 existing satellite customers to faster wireless services that are gradually being extended to remote and regional areas by the company’s mobile wholesale partner Optus.

“We recognise that the Federal and State governments are currently funding ‘uneconomic’ mobile networks in regional areas. It would be in the best interest of these isolated communities to ensure open access to this crucial infrastructure – improving services and encouraging competition,” said Malone.

“As soon as NBN Co commissions its new satellites, iiNet will immediately provide higher performance services for all qualifying customers.”

Image credit: NBN Co

19 COMMENTS

  1. “With 42,000 people already connected to the NBN Interim Satellite, transmission capacity constraints are resulting in severe service quality issues.”

    So whats Malcolm/Ziggy going to do about it?

  2. Does anyone remember when Turnbull thought that building additional Satellites was a waste of money since there was enough capacity on existing infrastructure?

    “There is enough capacity on private satellites already in orbit or scheduled for launch for the NBN to deliver broadband to the 200,000 or so premises in remote Australia without building its own”

    http://delimiter.com.au/2012/02/11/the-truth-about-nbn-cos-satellite-needs/

    Glad this thought got scrapped pretty quickly. Can’t help but feel we may be having the same discussion about the copper infrastructure in 10 years time though.

    • ‘Can’t help but feel we may be having the same discussion about the copper infrastructure in 10 years time though.’

      Actually, those of us with some idea, and perhaps a little common-sense are already quite well aware that copper couldn’t possibly provide broadband requirements reliably OR effeciently for much time at all – and will very likely be obsolete within 10 years.

      Ah, the inevitable march of progress ignores the bleating of those who try and assert “better, cheaper, faster…”

      Sadly, we will all have to pay for their bloody-mindedness!

    • Turnbull needs to learn a lesson here. He was dead against NBN Co having their own satellites. He wants to use excess capacity on private satellites, which clearly does not exist. Extra capacity is gone, due to high demand from customers wanting better services. The solution is the new satellites he didn’t want built, which wont be able to come online for a couple of years.
      So to extrapolate that to Turnbull’s approach to fixed line solution – i.e. build it when the demand is there, is more than obvious, it will be too late then. We are already seeing people on the NBN taking up higher speeds than expected. So by the time demand is already high, and potentially stressing the infrastructure available, Turnbull will start building new infrastructure. We will end up in this exact same situation, where there will be a lag and users will suffer again. The best solution is to do it right from the outset.

      • >> “Extra capacity is gone …”

        I’m not sure that is correct.
        I believe the capacity is available, but NBN Co are not interested in making it available for us to purchase. It appears that it is subsidised (remember the uniform wholesale price means that some NBN access services are subsidised by others) and, therefore, increasing capacity would mean increasing the subsidy.

        NBN Co pricing decisions are opaque, so that is an educated guess on my part.

        >”The solution is the new satellites…”

        Yes, but the interim service could be improved, while the regional community waits for that.

        • “Yes, but the interim service could be improved, while the regional community waits for that.”

          it could, just not under this government…

      • We will end up in this exact same situation, where there will be a lag and users will suffer again.

        No, we will be in a significantly worse situation, because relaxation of infrastructure competition restrictions will allow Telstra, TPG, Optus and anyone else to build FTTP ghettos while NBN Co’s profitability will be undermined by the removal of high RPU products under FTTN and significantly higher OPEX. The environment that exists today can only be revisited in three years if all elements remain unchanged.

        I really don’t understand the mindset of people who think this can just be ‘fixed’ down the track if the LNP screw it up – their plan isn’t just about screwing up bits of the network, it involves alteration of the environment to such an extent that a future Government monopoly infrastructure project like this isn’t possible. What is so hard to comprehend about this?

        • Trevor, I couldn’t agree more with you.

          The LNP are going for a “Scorched Earth” policy with their free market idiology.

          The beauty of the NBN Co model was that it allows competition at the retail level with a ubiquitous access for most Australians. It also keeps the RSP’s on their toes with their pricing and offerings. As consumers we really will be able to compare “Apples with Apples” in a way that we never could before.

          Short of a future Government nationalising the broadband industry (if we get broadband “ghetto-isation”) we will be stuck with the LNP free-market wet-dream forever.

          We WILL regret their decision for generations to come!

  3. “Can’t help but feel we may be having the same discussion about the copper infrastructure in 10 years time though.”

    In ten years time, the copper network will be at five minutes *past* midnight, and many people such as myself will be angrily saying “I told you so” to all the FTTP naysayers before burning an effigy of Malcolm Turnbull.

  4. This is an example of the number one problem with FTTN(yes I know we are talking satellite). It is building capacity for what we need now as opposed to what we will need when it is finished. FTTN is capacity for what we need now and like the satellites right it won’t cut it when it is finished.

  5. Bear in mind not a single page of the Strategic Review has been released yet… but all these clueless FTTH zealots are jumping to extreme conclusions and forecasting imminent disaster for the “future of Oztraya”.

    • As with much of the LNP strategy, the ‘strategic reviews’ are a distraction while the Government negotiates with Telstra, drafts new legislation and implements policy in the background. If there was ‘nothing to worry about’ all NBN FTTP provisional planning and ongoing construction would be proceeding apace and the ramp up would be accelerating. As it is, all futurecconstruction has been halted – only that which was in the final phase of connection is continuing. Regardless of the outcome of the strategic review, FTTP is essentially dead in the water and already probably a year or more behind as a result of all the preliminary work being canned.

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