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Do you need the NBN?

Trevor Nicholson isn’t much of a technology buff, but even he can appreciate the way connectivity to the national broadband network (NBN) has improved his business. Phone card purchases at his newsagency are completed faster, orders and other communications with suppliers complete sooner, the quality of his phone system has improved dramatically, and his technical support providers can log into his systems and fix any problems immediately.

Most importantly, staff are spending more time serving customers rather than waiting as data crawls over slow communications links, as it has done for years. These may sound like small improvements, but for a small operation like Nicholson’s – he runs the News and Casket Newsagency, in the sleepy suburb of Mundingburra to the south of Townsville, Queensland – small benefits add up to a business that runs smoother and more easily than ever.

“Generally we are a one-man band, so the less time you’re waiting online, the more time you have to service your customers,” Nicholson explains. “There’s a lot more efficiency in the business all around, and we’re not going to be held up waiting all the time.”

Access to the NBN – which the shop received because it is located within a first-release trial site in a suburb of Townsville – has also dramatically improved the shop’s phone service. Nicholson had already contacted a  local internet service provider to set Nicholson’s shop up with a voice over IP (VoIP) telephone service, which routes calls across the internet and eliminates the need for a separate Telstra local phone service, before he was migrated to the NBN.

With his old internet connection, the call quality had suffered due to the flaky nature of his previous internet service. “First you would hear static, and then you would get halfway through a conversation and it would drop out,” Nicholson says. “I was ready to ditch the [VoIP] phone and go back to a normal phone service. But with the NBN, the phone is clear as a bell and there are no dropouts.”

By its bootstraps

Nicholson’s small suburban shop is just a tiny part of the massive civil and technical engineering project that will, by the time it’s completed around a decade from now, have run modern communications services to every house and business in Australia.
The majority – around 93% of premises – will be serviced using fibre-optic cabling that will initially provide services at up to 100 megabits per second (Mbps) but will be expandable in the future to ten or even a hundred times that speed.

The remaining 7% of properties will be serviced with either fixed wireless services, which can deliver similar speeds to properties in less densely-populated areas outside rural town centres, or satellite services that allow internet connection speeds of up to 12Mbps to the country’s most remote properties. Keep in mind that the speed that you get is determined by the strength of the wireless signal.

The furious political debate around the $35.9 billion project – the largest civil-works project in Australia’s history – has turned it into a ferocious battleground between Labor and a more fiscally conservative opposition, which is promoting an alternative strategy based on upgrading existing infrastructure. Controversy has been doubly strong because the NBN will also be accompanied by a massive legislative reform package that will fundamentally change many competition policies.

While the project has provided no end of fodder for politicians and journalists, it has gained undeniable momentum this year as the company responsible for rolling out the project, the government-backed NBN Co, has inked billions of dollars’ worth of supply and construction contracts. On top of this, a wave of first release sites have slowly snaked their way from Tasmania to pilot sites in Townsville; Kiama Downs and Armidale, NSW; suburban Brunswick, in Melbourne’s inner north; and Willunga, SA, a rural area to the south of Adelaide.

NBN Co has broken the entire country into regions called fibre serving areas (FSAs), each of which includes approximately 3,000 homes. Each pilot site consists of one FSA, with another 14 areas recently added to the agenda and a long three-year rollout plan expected from NBN Co by Christmas. Current estimates suggest the NBN will have been rolled out past 500,000 to 1 million homes by mid 2013, when an expected federal election promises either a major disruption or a comprehensive tick of approval for the massive project.

Once NBN Co begins to roll out the NBN in the area where your business is located, you’ll get the option of having a network termination unit (NTU) – which provides you with access to the fibre network – installed on your premises for free. It’s a good idea to accept, and doing so will not obligate you to anything immediately. If you’re leasing, talk with your landlord and encourage them to take up the offer; if they change their mind later on, they’ll likely have to pay for the installation.

You can then plug your existing   network into the NTU, sign up for internet services offered through one of the participating retail service providers (RSPs), and be online at NBN speeds. Pricing is expected to be competitive, with dozens of RSPs – including all of Australia’s existing major ISPs – already signed up to offer NBN services, and customers are likely to benefit from intense price competition.

It’s important to note that not all NBN customers will want or need 100Mbps services, which are high-end plans and have been priced from $49.50 to $189.95 per month, depending on data allowances. NBN Co is also offering 12Mbps, 25Mbps and 50Mbps services in fibre areas, with early service providers offering retail pricing as low as $34.50 per month and certain to drop as more competitors enter the market.

That makes 25Mbps NBN services price-competitive with existing ADSL2+ services with 50Mbps services a mid-range option and 100Mbps services comparable with similar speed cable internet services from Telstra and Optus. However, the NBN’s higher reliability means customers will actually get the 25Mbps they pay for; many ADSL2+ customers end up getting just 1Mbps to 3Mbps of actual speed due to the vagaries of the aging Telstra copper network over which they run.

This premise, of giving customers the bandwidth they’ve paid for, has become a rallying cry for many who have been disenchanted with the quality of the Telstra phone network that has for years carried all ADSL services.

Tasmania, as the first state to receive NBN services, knows this particularly well. “We’ve got some sectors of the Tasmanian community that have the NBN, and there are really good stories coming out of it,” says Robert Mallett, executive officer of the Tasmanian Small Business Council.

“Tasmania has the most decentralised population of any state or territory, and a lot of areas just haven’t been able to get broadband at all; if nothing else, fibre will provide some certainty to those places – that no matter where they are, they can push the button and instantly get online.”

Benefits

From Hobart to Broome and Margaret River to Port Douglas, business owners have one simple question about the NBN: how will it help me?

The answer, of course, depends on the nature of your individual business – but massive cost savings will be the most obvious improvement for many.

For example, Brunswick-based Glow Networks, which sells high-quality videoconferencing services for businesses, expects to save over $1,400 per month after shifting to an NBN service from a Telstra SHDSL (symmetric high-speed DSL) communications service that was costing it $1,500 per month to get 10Mbps download and 10Mbps upload speeds to the business.

For around $100 per month, the NBN gives Glow Networks ten times the download and four times the upload speeds of its SHDSL service. That’s critical for high-definition videoconferencing, which relies on being able to send large amounts of data quickly and is all but impossible over the ADSL services currently used by most companies to get online.

“I have never been luckier in my life than to have been living and working in the part of Brunswick chosen for the NBN rollout,” says Sam Dawe, director at Glow Networks. “Even at four times the price, we’d still be saving a massive amount of money on the NBN compared to our previous Telstra services. The service is like night and day, and the bandwidth we have now offers the most natural videoconferencing experience possible.”

HD videoconferencing has been regularly singled out in discussions about the NBN’s benefits, since it enables geographically-distant board members, directors, and suppliers to collaborate with better quality and smoother video than is possible using Skype and similar services.

A number of Brunswick-area businesses already use Glow’s high-definition videoconferencing services for regular contact with colleagues and suppliers in other areas. One local distributor even uses it to regularly conference with head-office staff in Tokyo. Dawe expects his customer base to grow rapidly as the NBN pushes into new areas, and enables him to add new services like secure voice calls and various fax services.
The NBN offers similar promise to other business owners whose livelihood depends on good internet connectivity, and they have unsurprisingly been in the vanguard when it comes to embracing the project.

For example, entrepreneur Raj Menon, who runs Adelaide technology product distributor PC Range, moved to rural Willunga as soon as he heard it would be an early release site for the NBN.

That put him within cooee of Edwin Van Ree, a Willunga-based consultant whose business, Vanree Software Consultancy, runs customer websites and applications, and supports their IT systems over the internet.

Van Ree, whose customer base extends as far away as Beijing, previously relied on two ADSL Internet services, to ensure he had enough bandwidth to service his customers’ needs. Because he lives near a Telstra exchange, he was fortunate enough to get good download speeds; however, limited upload speeds of just 1Mbps were a real problem – and that problem has gone away now that Van Ree has switched to a 100Mbps NBN connection from Internode that has boosted his upload capacity to 40Mbps.

“The most important part of our business is just to look after our customers the best we can,” he explains. “We help them do everything that is related to IT, and our monitoring service supports their businesses even internationally. When you go with the NBN, you can do more things at the same time. We’ll also be using it to   introduce new services for customers that would have been difficult to offer in the past.”

One new service that has proved popular in NBN early-release sites has been the provision of internet access itself. Nicholson, for example, has allowed his internet provider to set up an antenna on top of his newsagent and to tap into his NBN connection to sell high-speed services to other people in the area. This approach generates new revenue, while others have used their NBN presence to draw attention – and customers.

“The fact that we’re part of this trial has been really exciting,” says Lesley Bakker, owner of Willunga-based copy-and-print shop Office & Image.

As well as dramatically speeding the transfer of large files to her in-house designer and improving the reliability of business management options, the NBN has allowed Bakker to offer high-speed services to customers in the area – and pursue new opportunities in marketing, production, and more. Instead of talking to clients on the phone, for example, the NBN will allow the designer to videoconference with them to discuss and work on projects together, online.

All that’s necessary is for more people and businesses to come online, which will happen as the NBN early-release sites move into their commercial phase and network effects kick in. “There hasn’t been a massive business value at this point but I know the floodgates are about to open,” Bakker says.

“It has made things so much easier for our printing business and, as things really start happening and more people come online, there will be lots and lots of potential out there. This will help all of those businesses that have struggled with the Internet in the past. It’s all about being ahead of the game, and being there when those opportunities actually arise.” 

 

Image Credit: NBN Co.

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