Zuckerberg meets the telcos

What do telco executives hope to learn from Facebook’s Mark Zuckerberg?

One of the fascinations of this blog is how telecommunications executives desperately fight against the idea of their service being a basic utility.

Should you scratch a tough, hardbitten telco executive; you’ll find a sensitive soul who desperately wants to be seen as a swashbuckling media tycoon or cool startup wunderkind rather than the manager of a staid old telephone company.

Once you understand the buried desired of telco executives, it’s not surprising that Facebook founder Mark Zuckerberg was invited to give the opening keynote of the 2014 Mobile World Congress.

Sadly for the Telcos it wasn’t good news as the real life tycoon and wunderkind described how Whatsapp, the startup he acquired for $16 billion last week, is going to introduce voice services in the near future.

Having seen messaging services like Whatsapp slowly strangle the telecommunications industry golden goose that was SMS, the telcos now face lucrative voice services being further eroded by these Over The Top smartphone apps.

Which leaves them with data, the lowest margin service in the telco stable.

Far from being the bravest man in Silicon Valley, Mark Zuckerberg is the telco industry’s future. Which is why the industry’s executives want to find ways to profit from developments like machine to machine (M2M) communications and media ventures.

The worry though is most of the new telco opportunities don’t appear to anywhere near as profitable as now declining or stagnant services that have been so lucrative in the past.

Which makes Ericsson’s partnership with Facebook in developing an Innovation Lab for the internet.com initiative intruiging.

The objective of Internet.com is to make the internet more accessible to more of the world, which again threatens incumbent telco models.

Transmitting data—even a text message or a simple web page—requires bandwidth, something that’s scarce in many parts of the world. Partners will invest in tools and software to improve data compression capabilities and make data networks and services run more efficiently.

Efficient, compressed data means even less revenue for the operators so it’s no wonder they’re looking at those alternate revenue streams.

No telco executive is likely to starve in the near future, but as revenues stagnate in their established markets it’s no wonder the industry’s leaders are wondering whether it’s worthwhile hitching their fortunes to Facebook’s success.

Disrupting the smartphone market

The Tizen and Firefox smartphone systems threaten to disrupt the entire industry and ruin the plans of both Apple and Google.

It’s been a long time since we’ve had a three or four way war in the technology industry, with most sectors settling down into a two way fight between alternatives.

Mozilla’s promised $25 smartphone project threatens to open the mobile industry into a three way battle just as it appeared the market had comfortably settled down into an Android and iOS duopoly.

Now we see a three way race and possibly four if Samsung can get traction with its Tizen operating system that it’s bundling into the latest version of the Gear smartwatch.

One positive aspect of the four way battle is that three of the participants – Firefox, Tizen and Android are relatively open so compatibility between them isn’t impossible.

For Google and Apple though, this four way tussle presents a problem to their business plans.

Apple’s iOS ambitions of putting the software in smarthomes, connected cars and, possibly most lucratively of all, into retailing with iBeacon are threatened by a fragmented market and a rapidly eroding market share.

For Google, both Firefox and Tizen threaten the dominant position of their Android operating system that forms a plank in the company’s ambition to control the planet’s data and become an ‘identity service’.

Worse still for Google’s information ambitions, Firefox is working with Deutsche Telekom on a security initiative that will lock away users’ data.

So the stakes are high in the smartphone operating systems wars.

It’s early days to forecast the demise of either Android or Apple iOS, which is unlikely in the short term, but if Firefox’s operating system does take hold it will mean the smartphone industry is about to become a lot more complex.

Network neutrality and the internet of things

Yesterday’s US Supreme Court decision ruling against network neutrality is a mixed bag for the Internet of Things industry.

Yesterday’s US Supreme Court decision ruling against the Federal Communication Commission’s regulations on network neutrality is a mixed bag for the Internet of Things industry.

Network neutrality is the principle that all internet traffic is treated the same, regardless of its nature or destination.

The FCC rules meant US based Internet Service Providers weren’t allowed to discriminate between different types of services, for instance blocking Netflicks or allowing faster downloads from Amazon.

In the United States network neutrality has been a bone of contention between consumer groups, government regulators and ISPs for over a decade, although it hasn’t been much of an issue outside North America.

For Machine to Machine (M2M) or Internet of Things (IoT) vendors and services there is some attraction in Telcos being able to offer prioritised traffic for mission critical systems.

In applications like supply chain management and public safety, reliability of the connection is essential and something the ‘best effort’ services offered by ISPs are not well suited to.

When networks are overcapacity, say at sporting events or during disasters, being able to shed non critical traffic may be important for emergency services and the devices they may depend upon.

So for IoT and M2M services, network neutrality is not necessarily a good thing.

However there is a downside should network neutrality be overturned, the risk of vendor lock in is high and it’s quite possible to see as situation where, for instance, AT&T enter into an agreement with Google to provide the public network capabilities for Nest home automation devices.

This could see Nest customers suffering a substandard service if they choose another provider.

Internationally the attitude towards network neutrality has been that competition will sort things out, however the IT and telco industries do have a habit of trying to enforce their own monopolies on customers – something we’re currently seeing in the Apple-Google battles over smartphones and connected vehicles.

So it isn’t clear whether network neutrality isn’t a good thing for the M2M sector, however it’s something that’s going to play out as these technologies become more ubiquitous across the economy.

Today marks a moment of reinvention

Regardless of what it means for the wider industry, Microsoft’s deal with Nokia means both companies have entered fundamentally different phases of their businesses.

In announcing the company will acquire Nokia’s mobile and devices business, Microsoft said “Today marks a moment of reinvention”.

This is certainly true, with the retirement of Steve Ballmer, Microsoft officially enters the post Bill Gates era and today’s announcement is an admission from Nokia that their moment as the world’s dominant mobile phone manufacturer is over.

What’s notable about the deal is what Microsoft doesn’t get — particularly Nokia’s maps service. While Microsoft gets a license to use Nokia’s mapping services, it leaves the Finnish company with a valuable asset and possibly leaves it as the only company capable of competing with Google in that market.

For Microsoft, acquiring the expertise of Nokia’s engineers shouldn’t be understated, although integrating 32,000 Nokia employees will test Microsoft’s management as this increases their workforce by a third.

Possibly the most fascinating part of Microsoft’s announcement though is the comment in the second paragraph of their media release.

Microsoft will draw upon its overseas cash resources to fund the transaction.

US technology companies have been struggling to deal with the massive profits they have accumulated offshore as part of their tax minimalisation strategy. What we may now be seeing is a wave of foreign takeovers as American companies start to reduce their offshore cash stashes without incurring domestic tax bills.

If that’s true, Microsoft’s agreement with Nokia may well indicate we’re about to see many more takeovers around the world .

Regardless of what it means for the wider industry, both Microsoft and Nokia have entered fundamentally different phases of their businesses.

On running late

Is chronic lateness a trait shared by the entire tech industry?

Business Insider’s unathorised biography of Yahoo CEO Marissa Mayer is both enlightening and scary while giving some insight into the psyche of the tech industry.

Nicholas Carlson’s story tells the warts and all tale to date of a gifted, focused and difficult to work with lady who’s been given the opportunity to lead one of the Dot Com era’s great successes back into relevance. It’s a very good read.

Two things jump out in the story; Mayer’s desire to surround herself with talented people and her chronic lateness.

When asked why she decided to work at a scrappy startup called Google, which see saw as only having a two percent chance of success, Mayer tells her ‘Laura Beckman story’ of her school friend who chose to spend a season on the bench of her school varsity volleyball team rather than play in the juniors.

Just as Laura became a better volleyball player by training with the best team, Mayer figured she’d learn so much more from the smart folk at Google. It was a bet that paid off spectacularly.

Chronic lateness is something else Mayer picked up from Google. Anyone whose dealt with the company is used to spending time sitting around their funky reception areas or meeting rooms waiting for a way behind schedule Googler.

To be fair to Google, chronic lateness is a trait common in the tech industry – it’s a sector that struggles with the concept of sticking to a schedule.

One of the worst examples I came across was at IBM where I arrived quarter of an hour before a conference was due to start. There was no-one there.

At the appointed time, a couple of people wandered in. Twenty minutes later I was about to leave when the organiser showed up, “no problem – a few people are running late,” he said.

The conference kicked off 45 minutes late to a full room. As people casually strolled in I realised that starting nearly an hour late was normal.

It would drive me nuts. Which is one reason among many that I’ll never get a job working with Marissa Mayer, Google or IBM.

A few weeks ago, I had to explain the chronic lateness of techies to an event organiser who was planning on using a technical speaker for closing keynote.

“Don’t do it,” I begged and went on to describe how they were likely to take 45 minutes to deliver a twenty minute locknote – assuming they showed up on time.

The event organiser decided to look for a motivational speaker instead.

Recently I had exactly this situation with a telco executive who managed to blow through their alloted twenty minutes, a ten minute Q&A and the closing thanks.

After two days the audience was gasping for a beer and keeping them from the bar for nearly an hour past the scheduled finish time on a Friday afternoon was a cruel and unusual punishment.

This was by no means the first time I’d encountered a telco executive running chronically over time having even seen one dragged from the stage by an MC when it became apparent their 15 minute presentation was going to take at least an hour.

It’s something I personally can’t understand as time is our greatest, and most precious, asset and wasting other people’s is a sign of arrogance and disrespect.

Whether Marissa Mayer can deliver returns to Yahoo!’s long suffering investors and board members remains to be seen, one hopes they haven’t set a timetable for those results.

Are apps killing the text message?

Have we seen the peak of the mobile phone SMS use?

One of the great accidental successes of our times has been the Short Messaging System – or SMS – which was designed as a control function on GSM mobile phones.

In 1993, telcos in Finland started offering SMS as a feature and Nokia began supporting the service on their phones.

Text messaging quickly became a worldwide success as mobile phone users found sending a text message was often more convenient that calling someone.

As the marginal cost for providing SMS is effectively nothing, the feature being built into equipment, the service was a goldmine for mobile phone operators. However the tide might be turning as apps take over.

This was emphasised in a submission by telco Optus to the Australian Competition and Consumer Commission on some regulatory changes governing mobile connection costs where the provider raised the point that the rate of SMS growth is slowing.

First, while SMS usage has grown significantly since 2009, the rate of this growth has slowed significantly over the last year few years. This slow-down is largely due to greatercompetition from IP-based over-the-top (OTT) messaging services.
Over The Top services is telco jargon for apps that replicate phone functions, like Skype or Viber and these are expected to start taking a chunk from telco revenues.
While Optus’ submission is somewhat self serving as they are using the claim as an argument to get more protection, it may well be that telcos are seeing the age of what was the golden goose of SMS coming to an end.
If so, it will be the death of a technology which, for a short time was a very lucrative one.

Can mobile networks build Myanmar’s economy?

Myanmar, or Burma, is emerging from being a backward economy, can mobile networks help the nation’s economic development?

Fifty years ago Myanmar, or Burma, was one of Asia’s most affluent nations, but a succession of poor governments have seen the country become one of the world’s poorest. Can mobile phone networks be part of Myanmar’s econmic recovery?

The potential economic impact of mobile communications in Myanmar is a report prepared by Deloitte Consulting for network equipment vendor Ericsson claiming that rolling out cellphone networks across the nation will create 90,000 jobs in the emerging economy.

Myanmar is starting from a low base with only 2% mobile penetration rates, compared to over 40% in Timor-Leste and Laos while the average across South-East Asia is over 100%.

Myanmar lags south east asia mobile penetration rates

To address this the Myanmar Post and Telecommunications Department is looking a splitting the existing phone monopoly into three or possibly four licenses.

Ericsson’s report looks at the economic effects of rolling out these networks and some of the opportunities for local entrepreneurs and communities.

The biggest employment effect identified in the Ericsson/Deloitte report is through the reseller networks with 50,000 of the 90,000 jobs created by new mobile services being in the sales channel.

What’s striking about that prediction is how it doesn’t look at the broader effects of modernising the country’s phone network. The report’s authors do mention they believe the overall benefits could boost the Burmese economy by over 9% in a best case scenario but don’t fully delve into where they believe that growth will come from.

myanmar-gdp-effects-of-mobile-networks

It can be expected there’ll be many more indirect benefits as Myanmar’s communications networks jump into the 21st Century, the report itself has a chapter citing various benefits mobile networks have delivered to countries as diverse as Kenya, Chile and Bhutan.

Particularly interesting with Myanmar’s development will be the Chinese influence in rolling out these networks – the PRC is already the biggest foreign investor in the country having largely ignored western sanctions on the military regime and it can be expected players like Huawei and China Mobile will be well positioned in bidding for licenses and contracts.

For local entrepreneurs the complex Burmese language is a natural opportunity for app developers and programmers to develop localised versions of successful applications, the lack of English and Chinese language skills among the population – another terrible neglect by successive governments – will hamstring Myanmar’s digital media export opportunities.

Probably the biggest risk to Myanmar’s success though is the role of the military who are expected to get one of those mobile licenses.

Burma’s terrible economic performance over the last fifty years has been largely due to the incompetence, greed and corruption of various military rulers and, while their continued influence in the nation’s economy may be necessary to placate them and their cronies, the legacy of these people may act as a break on a really open economy or fair markets.

For Myanmar, the opening of cell phone networks is great opportunity. Hopefully the vested interests that have held this nation back for so long will resist the temptation to further damage the country’s prospects.

Burmese landscape image by ZaNuDa through sxc.hu.

Is Thorsten Heins the world’s bravest executive?

Blackberry CEO claims the tablet computer’s day are coming to an end – it’s a very brave call.

“In five years I don’t think there’ll be a reason to have a tablet any more,” Blackberry CEO Thorsten Heins told Bloomberg TV while showing off his company’s new Q10 handset.

Predicting the end of the tablet computer is a very brave call – particularly from a man whose company’s market share has fallen 90% since the iPhone was released – but does it have any merit?

Thorsten’s view is the smartphone is the device most people rely on. Of the three ‘screens’ we use, the mobile phone is the one we rely on the most and it will be increasingly important as mobile payments, NFC and other technologies develop.

Blackberry’s position is exactly the opposite of Microsoft’s ‘three screens’ strategy with Windows 8 where the aim is to have the same system running on phones, tablets and personal computers.

Apple and Google have chosen to modify their systems, or even have totally different ones such as iOS and OSX, to suit different sized devices.

Supporting the Blackberry view is the famous survey by the now defunct Nortel Networks in 2008 that found one third of workers would rather lose their wallet than their mobile.

When that survey was carried out five years ago, smartphones really hadn’t made much of an impact in the marketplace as Nokia and Blackberry dominated the handset industry.

Today, with smartphones from Apple and Samsung dominating, there’s no doubt the mobile phone is even more important to the typical user. So maybe Thorsten and the Blackberry team are onto something.

Even if the smartphone does turn out to be most peoples’ main computer, it’s unlikely tablets like the iPad are going to fade away as the larger format is too handy for many uses.

Like most things in life it’s a matter of choosing the right tool for the job and in many cases a tablet, or a Personal Computer, is the better device.

What is clear though, is that Blackberry has to make some big bets to survive, so Thorsten’s talking big is quite understandable. You have to give him points for chutzpah.

Disclaimer: I was given a Blackberry Z10 to trial while travelling in Tasmania. I couldn’t figure out how to use it.

Can Huawei come in from the cold?

Can the Chinese communications technology vendor come in from the cold?

Last Friday the Parliamentary Joint Committee on the National Broadband Committee met in Sydney, I’ll have a story on this in tomorrow’s Business Spectator.

An interesting exchange during the meeting was  between the committee’s chair Rob Oakeshott and Mike Quigley, the CEO of NBNCo.

Rob Oakeshott: “You have advice that either as a department or a statutory body that says there are certain companies that should not be involved with the National Broadband Network build? If so, is that advice still in place?”

Mike Quigley: “Well chair, we work very closely with the appropriate government agencies in this area, obviously there are things we can and things we can’t say, but we have a very close working relationship with those entities and we obviously take their advice on things we should and shouldn’t do.”

“Their advice is still in place and we’re following it.”

I’m going to be in Melbourne tomorrow attending the Australian Davos Committee’s China Forum where, among other luminaries, the Prime Minister and various key people in the Australian-Chinese relationship will be talking.

The company in question is Chinese communications vendor Huawei and their banning from Australian contracts adds an interesting dimension to the discussion on trade relations between the two countries.

Australia has followed the US lead in blocking the Chinese communication hardware company from key contracts like the NBN on security grounds and it’s hard to see how this doesn’t test the patience of the PRC.

We’ll see how this issue plays out as it’s one that seems to be largely overlooked when we discuss trade ties and relationships with Chinese companies.

Door to door blues

How short term management thinking caught energy suppliers and telecommunications providers short.

The news that energy companies have decided to drop direct door to door selling in the face of prosecution is the latest example of poor thought out performance metrics and managers unsuccessfully trying to shift risks out of their business.

Electricity and gas distributors Energy Australia and AGL embarked on a door-to-door sales campaign to gain more customers. Like most modern corporations, they don’t do this stuff themselves and engaged outsourcing companies who in turn took on commission salespeople to do the ground level selling selling.

It didn’t work well and in face of complaints, both companies had to back away from their campaigns after suffering legal and reputational damage.

The sad thing this has happened before, at the time of telecoms deregulation in the 1990s telcos did the same thing to grow their market share. Door to door sales teams fanned out across the suburbs to sign households up to telephone plans.

In one example, a company hired dozens of backpackers, bussed them to outlying suburbs and sent them out on the streets to sign up as many households as possible.

Initially the campaigns were a success with providers reporting increased signups, greater market share, fat executive bonuses and happy commission earning salespeople.

Then the complaints began.

Customers discovered they’d been lied to, or in some cases falsely signed up, as hungry salespeople did everything they could to get a commission.

At first the telcos thought they could throw the problem over the fence so they blamed the contractors. Eventually the damage became so great the telcos had to back down on their door to door selling as problems multiplied and consumer protection agencies expressed their irritation.

At the heart of the problems with this type of door to door selling is the mismatch of incentives – for managers, contractors and the teams going door to door in the suburbs.

Door to Door Blues

At the coalface are the salesteams trudging around suburbs. In the 1990s telco boom they were largely made up of backpackers whose interests were to sign up as many customers as possible in order to fund the next stage of their travels.

Often, the telco or its contractor would only discover a sign up was the family dog or toddler long after the traveller was sunning themselves at Koh Phi Phi.

Using Indian students as the energy contractors were doing largely fixed some of the worst excesses of the 1990s but it didn’t address all of the problems

Management misalignment

Driving the rush for sign ups are usually poorly designed  management Key Perfomance Indicators – a dumb set of executive benchmarks rewards poor  behaviour and creates unforeseen risks. Particularly when those KPIs are focused on short term metrics.

Very quickly the risks in the short term focus become apparent and managers back off from these programs.

In this case it appears Energy Australia’s managers heeded the early warnings and backed off before the problem became too great, unlike the telcos who let the sales teams run rampant before reigning them.

What’s saddening about Energy Australia’s and AGL’s problems is they were totally forseeable and those who warned of the risks in a door-to-door customers acquisition strategy – and there were almost certainly some in these organisations – were overuled by enthusiastic executives aiming to bust their sales and market share metrics.

Sometimes we are condemned to repeat history repeatedly in business.

Dealing with the data explosion

Supply the mobile base stations for data hungry customers is one of the great challenges for telcos. How they resolve this will create some unusual alliances.

“Last year’s mobile data traffic was nearly twelve times the size of the entire global Internet in 2000.”

That little factoid from Cisco’s 2013 Virtual Networking Index illustrates how the business world is evolving as various wireless, fibre and satellite communications technologies are delivering faster access to businesses and households.

Mobile data growth isn’t slowing; Cisco estimate global mobile data traffic was estimated at 885 petabytes a month and Cisco estimate it will grow fourteen fold over the next five years.

Speaking at the Australian Cisco Live Conference, Dr. Robert Pepper, Cisco Vice President of Global Technology Policy and Kevin Bloch, Chief Techincal Officer of  Cisco Australia and New Zealand, walked the local media through some of the Asia-Pacific results of Virtual Networking Index.

Dealing with these sort of data loads is going to challenge Telcos who were hit badly by the introduction of the smartphone and the demands it put on their cellphone networks.

A way to deal with the data load are heterogeneous networks, or HetNets, where phones automatically switch from the telcos’ cellphone systems to local wireless networks without the caller noticing.

The challenge with that is what’s in it for the private property owners whose networks the telcos will need to access for the HetNets to work.

One of the solutions in Dr Pepper’s opinion is to give business owners access to the rich data the telcos will be gathering on the customers using the HetNets.

This Big Data idea ties into PayPal’s view of future commerce and shows just how powerful pulling together disparate strands of information is going to be for businesses in the near future.

But many landlords and wireless network owners are going to want more than just access to the some of the telco data — we can also be sure that the phone companies are going to be careful about what customer data they share with their partners.

It may well be that we’ll see telcos providing free high capacity fibre connections and wireless networks into shopping malls, football stadiums, hotels and other high traffic locations so they can capture high value smartphone users.

One thing is for sure and that’s fibre connections are necessary to carry the data load.

Anyone who thinks the future of broadband lies in wireless networks has to understand that the connections to the base stations doesn’t magically happen — high speed fibre is essential to carry the signals.

Getting both the fibre and the wireless base stations is going to be one of the challenges for telcos and their data hungry customers over the next decade.

Paul travelled to the Cisco Live event in Melbourne courtesy of Cisco Systems.

One street, five networks – the madness of rethinking the NBN

One suburban street shows the madness of changing the NBN fibre to the premises policy.

In Technology Spectator today I write about how Australia is risking repeating the mistakes the colonies made with railway gauges on much more grand scale with telecommunications technologies.

With talk of re scoping the National Broadband Network project, despite being four years into a ten year undertaking, it’s important to understand just how foolish this would be an what a mess it will create.

To illustrate this, I’ve gone for a walk along a Sydney street on the Lower North Shore. This suburb is less than 5km from the city’s central business district.

The pillar at the end of the street

At the end of this typical suburban street is a little gray, well guarded but battered pillar. This box is important as it contains the connections to the local telephone network and its replacement will house the distribution equipment for a fibre network regardless of what type is installed.

 

Interestingly, just the presence of the pillar and the associated manholes nearby indicates there is already fibre in the neighbourhood, one aspect in the NBN debate that’s overlooked is that optical fibre is standard for telco backhaul and distribution networks.

The only reason fibre hasn’t already been rolled out to homes and businesses is the sunk cost of the copper cables. When it’s necessary to replace an entire copper system as in New York after Hurricane Sandy or in South Brisbane after the local phone exchange was sold, then fibre is what telcos will install as its cheaper to maintain.

Plain old telephone lines

Walking down the street we find the first example are those who are going to be stuck with the old copper network under a fibre to the node solution.

an old telephone pole shows the poor standard of Aussie comms

What’s notable about that pole is its shocking state – in itself it illustrates just how Australia’s telecommunications networks have been allowed to run down with the underinvestment of the last twenty years.

There’s a very chance the householders connected to those phone lines won’t be able to sustain a reliable  ADSL or FTTN connection because of the state of the wires.

Remember, this pole isn’t in some remote part of rural Australia, should you be brave enough to climb it you’d have a wonderful view of the Sydney Harbour Bridge, North Sydney and the city. Its state illustrates that underinvestment is just as much a problem in the suburbs as it is in the bush.

Using the Pay-TV network

One the alternatives being touted is using the Pay TV network cables – know as Hybre Fiber Coaxial, or HFC – to carry the broadband signal.

poor quality HFC Pay TV cable connection

Here’s an example of the Foxtel installations and the poor work quality stands out immediately. The connection on the left is notable for its rain catching properties which doesn’t bode well for what’s happening to the coax cables in the duct lurking beneath the footpath.

As an aside, the sort of poor quality workmanship found in the cable rollout is another risk to the NBN as it appears NBNCo is repeating Foxtel’s mistake of screwing the installation contractors into the ground on their rates. The result is really low quality work which won’t stand the test of time.

Making HFC even less useful is the fact that most Australian properties can’t connect to it.

In one of the best of examples of the drooling incompetence of Australia’s political ‘elite’, the 1990s Keating government managed to engineer a situation where the two cable companies rolled out their networks to the same places – 30% of the country got two networks while the rest received nothing.

The real problem though with the HFC network is that most Australians who can get it haven’t bothered – take up rates in the areas cable is available struggle to hit 50%. So an Abbot government would actually have to pay to connect households to a service they’ve never wanted.

Probably the cruellest part of all with the HFC proposal is the coax network itself is approaching the end of its life and most will be replaced with fibre within a decade. So we’re not saving a cent, just kicking costs down the road.

Apartment living

Even if you lived in that thirty percent of the country that did get pay-TV cable along their street, you were out of luck if you lived in an apartment or townhouse as few strata committees were interested in paying Foxtel install cables and Optus was never interested in MDUs – Multi Dwelling Units in telco-speak.

townhouses-connected-to-telco

A little way down the street from the houses photographed above are a group of town houses. Under the current NBN plans, this complex will get fibre. Under the coalition’s it will be stuck with copper.

The worst case scenario is a “fibre to the basement” solution where the fibre is run into the building’s distribution frame and then it’s up to the owners to make the connection using the existing copper phone lines.

In many cases it will never happen as strata managers and committees would keep putting it off, or they’d choose the lowest cost option which would exacerbate the poor work of the overworked NBN contractors.

Tower living

Next door to those townhouses is an eight story apartment block. These people risk being the biggest losers in the new telco environment.

apartment-tower

The problem for tower block dwellers is the low quality of the buildings and the lack of space for fibre telco risers. Under the fibre to the premises proposal some of these blocks are going to pose serious challenges to NBNCo.

Should the fibre to the basement proposal go ahead, many of the notoriously penny pinching owners corporations won’t complete the installation.

It’s highly likely that many Australian apartment dwellers are going to find themselves on wireless or LTE (mobile phone) connections for the foreseeable future as both the telco policies and poor building standards are going to deny them access to high speed fibre. This is going to have financial consequences for many landlords.

The risk for businesses

Most Australian businesses which occupy office buildings or industrial estates and they are going to be affected in the same way as apartment dwellers. The solution proposed by the coalition is that they should pay for their own fibre connections. Some will, many won’t and we’ll end up with another set of connections in our commercial districts.

One street, five networks

So just on one suburban street we could have people connecting through the old copper network, the HFC pay TV network, fibre to the basement, wireless and direct fibre for those who can afford it.

This is madness.

What’s even greater madness is that we’re four years into the National Broadband Network project and we’re talking about changing the scope for what’s been billed as one of the biggest infrastructure projects in Australian history.

Praying the luck continues

The Technology Spectator starts off with a comparison to the railway gauge madness of the 1850s. There’s an interesting parallel today.

Two weeks ago, the Australian Financial Review reported that millions had been spent on lawyers and consultant fees on Sydney’s North Western railway yet no work has been done.

On the same day, Business Insider published a story on the extensions to New York’s Long Island Railroad.

Around the world governments from New York to Nairobi are getting on with building infrastructure. In the meantime Australia struggles with building tram lines.

When we do decide to build a major project we get four years into it and decide to change our minds.

The nation dodged a bullet despite having made bad choices with roads and railways in the nineteenth and twentieth Centuries. Australia prospered despite those poor decisions.

If we can’t get telecommunications right then we better hope the luck continues through the 21st Century.