iiNet: NBN still 12 months from a 'tipping point'
- 30 January, 2013 22:00
While the National Broadband Network (NBN) has now passed more than 72,000 premises, Greg Bader, chief business officer at iiNet, says the network is still at least 12 months away from reaching a "tipping point".
He told Computerworld Australia the network is not yet widespread enough for it to be top-of-mind for a lot of people.
"The NBN's got some pretty aggressive timelines they need to meet -- or ambitious is probably a better word -- but I'd suggest we're probably 12 months out [from the tipping point]. Certainly in pockets it's obviously going to be a lot quicker than that, but widely as a community, I think we're probably 12 months out," he says.
"Over the next 12 to 18 months we will reach that tipping point where enough people are having to think about it and enough providers are in there offering services."
This tipping point could be even further for businesses taking up the NBN.
While residential NBN plans have been on the market for some time, business plans on the NBN are relatively recent, with NBN Co announcing 'enhancements' to its business offering in September last year.
iiNet has also boasted it has more customers connected to its fibre-to-the-home (FTTH) network than NBN Co has connected to the NBN.
However, change could be in the air.
Yesterday iiNet announced its first major business agreement with the Department of Police and Emergency Management in Tasmania as the preferred supplier for the NBN to provide a managed service connection for police stations in the state.
The upgrade for the Department of Police and Emergency Management to the NBN will be rolled out over three years, with the organisation the first state police and emergency department to sign up for an NBN connection.
The move to the NBN will allow Tasmanian police stations to retire old hardware and will help police increase data entry speeds and allow greater volumes of data to be transferred.
"The reaction from our officers has been very positive and that's probably based on the quantum of the change that they've experienced over a fairly short period of time," Todd Crawford, deputy director, the Department of Police and Emergency Management, said.
"Some of these stations, Deloraine for example, has moved over the course of two to three years from a 512/128 link to a 50/20Mbps NBN link over a pretty short period of time, so it's people who are used to pretty slow speeds."
Other business agreements for the NBN could also be signed this year, with iiNet currently in discussions with other government agencies to roll out the NBN in Tasmania and other states.
Business agreements for the NBN currently only make up 5 per cent of iiNet's NBN business, but Bader says this will begin to change once the NBN rollout reaches more areas.
In Tasmania in particular, which will be the first state fully connected state in Australia, he says as the NBN infiltrates more areas which have businesses and government agencies, the business side of the NBN will pick up.
"I think in two years' time there'll be fairly significant changes to the way things operate," Bader says. "For example, we've seen the explosion of hosted or cloud-based solutions. Once everybody has ubiquitous, high-speed, high quality connectivity, those things will become more readily consumable."
Bader says there are different challenges of rolling out the NBN to businesses. For example, one of the most crucial aspects is when the time is right for a business to make the switch.
"No one is going to put a lot of effort into it if one of your locations is available for the NBN, but the other 99 per cent aren't. [However], there will come a tipping point for all organisations that they'll need to consider the NBN and consider the NBN from a simple business-value proposition point-of-view," he says.
While the Department of Police and Emergency Management is now making the transition to the NBN, Bader says other organisations will begin to make the switch over the next year or two.
Marketing the NBN left up to RSPs?
In October last year the federal government announced it would inject $20 million into a marketing campaign to dispel misconceptions about the NBN.
However, NBN Co has been criticised for a lack of marketing about the network in states such as Tasmania.
Andrew Connor, spokesperson for Digital Tasmania, has previously said while there is some awareness of the network in the state, there is still some scepticism about the NBN due to the federal opposition spreading "misinformation" about the cost of the network and delays.
"Overwhelmingly we do support the NBN, but obviously the sales jobs can be improved and at times Digital Tasmania feels like it's doing the sales job for the NBN down here. It feels like we're doing the job of promoting the NBN in Tasmania or setting the record straight," Connor says.
Bader says RSPs have been partially responsible for selling the NBN to customers, particularly to business customers.
"Some of the trials that are happening around the country at the moment on high-definition video for psychiatric counselling and if you look at the ageing population wanting to keep people in their homes ... it's ludicrous the opportunity that we as a country have," he says.
"That sort of stuff I don't think is being ... successfully sold by the federal government and NBN [Co] as to what the future holds."
However, he says it is partially the responsibility of RSPs to sell the network to their customers.
"We're competitive businesses fighting for customers, so in a normal market that takes care of itself. The NBN, for right or wrong, has been politicised, as you would always expect it to be," he says.
"If we could have afforded to just say 'we're doing this because it's the equivalent of the 21st century road', I think people would have gotten on with it. And the fact that it's not something that we can turn on overnight -- there's a lot of reasons outside of people's control as to why this message has got diluted. But honestly I do think we will see that change."
While NBN Co has been holding seminars and education sessions on the NBN around Australia, iiNet has also been running NBN workshops in Tasmania for government and small business customers.
"A small business owner is understandably concerned about any change. They're worried about potential impacts to their business and our job is to just educate and walk them through [the changes] so it's a completely painless procedure," he says.
The NBN to push innovation
Despite the challenges associated with getting people on-board with the NBN, Bader says he is a big supporter of the network and the opportunities it will bring.
For example, he said the NBN will have a significant impact on education at the university level -- he says the NBN will mean students are no longer geographically bound to a university in their local area and could, theoretically, gain a distance education from universities like Harvard.
"That's an example where they're going to have fundamental change. That's what's exciting ... I think there's going to be a whole raft of innovators that pop out of this over the next few years," he says.
"For providers like ourselves, the world is going to get interesting as we differentiate in the levels of services that apply over-the-top, whether it be Microsoft Exchange or Linked from a business customer point-of-view.
"That's where the real differentiation is going to come. It's going to take a while, unfortunately, because of the build program, but we'll get there and we'll end up with a pretty interesting and pretty exciting future."
Yesterday, the CSIRO announced a $40 million program, the Digital Productivity and Services Flagship, which aims to lift Australia's productivity through research in four key areas -- government; commercial; health; and smart infrastructure -- and how to optimise Australia's use of the NBN.
Bader also believes the NBN will be key to Australia's economic growth and likens the NBN to other infrastructure in Australia, such as roads and sewerage networks.
"It's a backbone infrastructure that will fuel our economy for years and years to come," he says.
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