Why is broadband so cheap in australia?!?!

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#468928 13-May-2011 21:53

hamish225: Hello, so im wondering why its so cheap in Australia, they're on the same cable as us to america and all?

http://optus.com.au/store/phone/broadband_home_phone

yes i seen that add here its seem very cheap

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#470287 17-May-2011 21:50

International bandwidth costs between NZ and AUS are very similar. The Southern Cross Cable company (owned by Verizon/TNZ/Singtel) charges the same for AUS>US circuits as it does for NZ>US circuits. Granted we do have a fair few more submarine cables (I think NZ only has like one or maybe two?)

I'd say domestic IP costs are much higher in NZ than here in australia... here we have heaps of backhaul providers to telephone exchanges (Telstra, SingTel/Optus, Amnet, TPG/PIPE, AAPT/Telecom NZ, Agile, iiNet, Adam, and it goes on). I haven't seen such competition in NZ?

Our incumbent is also moving in the right direction under guidance from a great CEO. For example, compare http://go.bigpond.com/broadband/?ref=Net-Head-Int-Plans- with Telecom's broadband plans... that's a big difference. These speeds: http://speedtest.net/result/1287769394.png set me back about $148AUDpm from Telstra including unlimited local/national/mobile calls and 200GB of data. I can't even get more than 80GB of data from Telecom!

We're also incredibly lucky in that Telstra has not moved towards "cabinetisation" or FTTN like Telecom NZ. Cabinets are very bad because often there's either no room for providers to install their own equipment (forcing people back to the incumbent either through wholesale or retail) or it's not really feasible for equipment to be installed (particularly with thousands of cabinets).

So yes... there's complicated explanations but i'd say it comes down to two things:

1) NZ unbundled the local loop too late.
2) Cabinets are bad.

Ragnor

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#470340 17-May-2011 23:08

Southern cross only sells capacity directly in large units eg: STM-16, only three ISP's are large enough to purchase directly from SXC and even these spin buying international transit out into separate divisions/units that sell to other smaller ISP's to mitigate the cost.

Telecom (Global Gateway), Telstraclear (Reach) and Orcon (Odyssey Networks)

Telecom our largest ISP is small by Australian standards.

Economy of scale is a huge factor imo.

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#470366 18-May-2011 06:20

matts231: 2) Cabinets are bad.

Huh? Cabinets are fantastic and I doubt you'll find many people sharing your viewpoint.

How else are ADSL distance limitations going to be overcome? Moving people's houses closer to the exchange?

wjw

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#470427 18-May-2011 11:01

sbiddle:
matts231: 2) Cabinets are bad.

Huh? Cabinets are fantastic and I doubt you'll find many people sharing your viewpoint.

How else are ADSL distance limitations going to be overcome? Moving people's houses closer to the exchange?

Cabinets are bad from a commercial sense.

old3eyes

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#470460 18-May-2011 12:32

wjw:
sbiddle:
matts231: 2) Cabinets are bad.

Huh? Cabinets are fantastic and I doubt you'll find many people sharing your viewpoint.

How else are ADSL distance limitations going to be overcome? Moving people's houses closer to the exchange?

Cabinets are bad from a commercial sense.

For who??

Regards,

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#470465 18-May-2011 12:38

old3eyes:
wjw:
sbiddle:
matts231: 2) Cabinets are bad.

Huh? Cabinets are fantastic and I doubt you'll find many people sharing your viewpoint.

How else are ADSL distance limitations going to be overcome? Moving people's houses closer to the exchange?

Cabinets are bad from a commercial sense.

For who??

Probably for those ISPs who did not see the large signs saying "CABINETISATION IS COMING" and decided to unbundle exchanges...

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#470467 18-May-2011 12:42

old3eyes: I saw an ad on SBS last nite for TPG. 200Gig for $59.. Must be a catch somewhere..

no catch. my friend's on it ... also rated top isp for those on a budget somewhere sometime last year (sorry got no link)

Ragnor

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#470479 18-May-2011 13:02

My line rate increased from 4Mbit to 16Mbit while paying the same amount for Internet, I fail to see how that is bad!

There are still a heck of a lot of people connected directly to exchanges eg: within 1-2km.

Orcon have said LLU is still worth doing despite cabinets, you would guess this is because it lowers the cost of providing the service to those customers. Instead of paying Telecom wholesale for a ADSL port they are paying nothing to themselves and cover the cost of the investment in the gear.

It also gives the ISP more control. Orcon use 6dB noise margin on their equipment which gives a much higher line rate than the 12dB Telecom wholesale use, they claim higher minimum backhaul rates vs Telecom wholesale too.

Sub Loop unbundling (put gear in cabinets) is tricker because it requires scale, there is space and pricing has been regulated by the ComCom.

Each cabinet typically serves a few hundred customers there is a minmum number of customers needed in order to make investing in DSL gear to go in a cabinet worthwhile.

Telecom spent a truckload of money deploying FTTN (fibre to the node) and cabinets, it's not surprising the cost set by the ComCom to have gear in a cabinet and serve customers from there is higher than in an exchange.

I suspect the cost of SLLU will come down over time and at some point some cabinets will become cost effective for a consortium to install alternative DSL gear in.

Zeon

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#470487 18-May-2011 13:17

The problem with cabinets is that its impossible to cut out Telecom wholesale as there is nobody who has enough market share to make it worthwhile putting equipment in cabinets. It almost defeats the point of LLU as its the structural separation and regulation of Telecom Wholesale that has led to the current market conditions.

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Ragnor

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#470496 18-May-2011 13:31

There is nothing stop a large ISP building their own competing national network apart from cost.

Telecom spent something like $1.4 billion on the current program

We haven't seen anyone else stump up the cash to build fibre to every node, put cabinets in each suburb.

This kind of infrastructure is a natural monopoly, you only want it built once and you get the lowest price by having one provider who's regulated.

Remember the cabinetisation program is the direct result of the government giving Telecom a separation obligation of achieving >10Mbit to 80% of customers.

LLU and Sub Loop unbundling is regulated by the ComCom, so the question is do you think they have set a fair price for access and backhaul...remembering how much cabinetisation has cost?

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#470498 18-May-2011 13:38

And with any natural monopoly you want it in the hands of the government or at least heavily controlled by them

Most problems are the result of previous solutions...

All comment's I make are my own personal opinion and do not in any way, shape or form reflect the views of current or former employers unless specifically stated

DonGould

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#470500 18-May-2011 13:40

The question really should be "What do we need to do in .nz to get the same value as can be got in .au?"

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Ragnor

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#470501 18-May-2011 13:43

DonGould: The question really should be "What do we need to do in .nz to get the same value as can be got in .au?"

Increase population by x5 to 22million?
Go back in time to early 2000's and start LLU earlier?
Go back in time to the early 80's and separate Telecom before selling it, don't sell the the part that has the exchange building and ducts and sell the rest?

Really the scarce hard to replicate natural monopoly part imo... is the the exchange buildings/locations (and cabinets now too) and in theory the ducts between them

Ideally we'd have large accessible ducts between every cabinet and exchange and for regional/national backhaul that anyone can apply and pay some reaonable co-location to put fibre into.

Beccara

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#470506 18-May-2011 13:49

Or find some way of moving NZ physically to just off the US coast.

But on a serious note it's about getting the content that bulk of people want on-shore, CDN's nodes sitting in NZ somewhere for Google,Apple,MS, etc. We have Akamai nodes in NZ but Limelight nodes are in AU, Google cache's are in AU, MS own CDN is in AU. So either we need someone to fork out the cash to get the nodes in NZ with a decent INT pipe behind them or we need someone to offer $10/mbit to Sydney so we can access them all dirt cheap

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