The NBN Fiasco explained

There has been lots of hype over the past six months around the National Broadband Network (NBN), and Telstra in particular. To recap the scenario looks like thisthe government has pledged $4.7Billion toward the NBN project in response to the Australian public and business community need for faster broadband access. The faster access is perceived to encourage productivity by opening up much faster and richer online services etc. Although the government has pledged $4.7B it needs to be matched by an ICT player in order to deliver the project.

The NBN project was being contested between Telstra, TERRiA (Optus lead consortium with iiNet, Internode, Macquarie Telecom, & Primus Telecom), open access network player Axia Netmedia from Canada and let’s not forget TransACT and Tasmanian government and Acacia looking after their territories. Late last year Telstra dropped a bombshell by not submitting a proposal by the deadline and instead offered a counter-proposal that is non-compliant with the RFP’s 98% coverage objective. That move by Telstra was to prove catastrophic for the company and its shareholders so much so that their CEO Sol Trujillo finally said “woops” and resigned and is heading home.

So who will win the bid? I would assume that this is what will play out and remember this is my opinion. The Optus led TERRiA bid will win the bid however Telstra will be involved however will not lead the project, (thank God). Most of the fast broadband will be delivered via wireless access using 3G and WiMAX or LTE or both. The reason Telstra will be involved as the wireless access data will need to be backhauled once handed off, so the existing Fibre will have its place. The “last mile” will be wireless it has to be as wireless is the future, its inexpensive to deploy and can be rolled out quickly. The CBD and metro. areas can enjoy the choice offered however anyone anywhere in this vast land can reap the benefits of a fast online world.

4G (WiMAX, LTE etc.) will deliver speeds of 100Mb p/Sec and handle voice, video and data 3G (HSDPA etc) will deliver speeds up to 40Mb this year also. Telstra will then be broken into four groups wholesale, wireless (mobile), Fixed Line & Media and all of Australia can start enjoying lower tariffs’ as a result of fairer competition and level playing field.

The NBN announcement by Kevin Rudd is expected in April 2009.

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