Building broadband infrastructure is hard. It takes a lot of time and money and requires significant amounts of planning. Something that Google Fiber is finally admitting, while Verizon and any other provider that has tackled a large-scale FTTP project sits back and says “we could have told you that”.
I’ve been writing about National Broadband Networks – in particular both Australia’s NBN and the UK’s Openreach for a long time (over 8 years to be exact). That’s when Openreach started trialing both its FTTP and FTTC networks and when NBN rose from the ashes of Australia’s failed plan to build a National Broadband Network through a consortium of partners.
At this time, the Australian government announced that it would establish a new company that will invest up to $43 billion (AUD) over 8 years to build and operate a National Broadband Network, a wholesale-only, open access network that will (1) connect 90 percent of all Australian homes, schools and workplaces with broadband services with speeds up to 100 megabits per second; and (2) Connect all other premises in Australia with next generation wireless and satellite technologies that will deliver broadband speeds of 12 megabits per second.
In the original plan, 93% of homes were to be connected by FTTP, while 4% would be served by fixed wireless access (FWA) and 3% by satellite.
Fast forward to today and a few things have changed. First the target is to provide minimum speed targets of 25Mbps/5Mbps for 100% of premises with the expectation for the following:
86% – 50Mbps or greater
68% – 100Mbps or greater
45% – 500Mbps or greater
40% – 1Gbps or greater
The second major change is the technology mix, which has shifted to the following:
2.0-2.5M Premises or 17%-21% – FTTP
5.1-6.5M Premises or 43%-54% – FTTN/B/dp
2.5-3.2M Premises or 21%-27% – HFC
500-630K Premises or 4% – FWA
400-470K Premises or 3% – Satellite
For the record, for those customer that desire FTTP, but are located in a FTTN/B/dp area, may request FTTP through NBN’s Technology Choice program – however, this will be at their own expense.
Why this shift in strategy? A couple of reasons. The first being Time to Market – it was clear from the initial roll-out (2012-2014) that NBN would not be able to hit its deployment targets. This resulted in lower than expected take-rates and revenues. For instance, in FY2013 the FTTP goal was 1.3M premises Ready For Service (RFS). The actual number was 150,000.
Furthermore, a strategic review conducted in 2015, indicated it would take at least 3 additional years to hit its deployment targets. The result: “An unrealistic assessment by key internal and external stakeholders of the complexity and time required to complete the task”
The second key reason, is that at the time of the initial planning for NBN – technologies such as DOCSIS 3.1, VDSL2 Vectoring and G.fast did not exist (except perhaps on paper and in the lab).
For reference purposes, VDSL2 Vectoring can deliver downstream speeds of 100Mbps @400m, and faster speeds at shorter distances. Using the VDSL2 35b profile, speeds of 250Mbps are achieved at the same distance.
G.fast can deliver speeds of 500 Mbps at 100m; 200 Mbps at 200m; and 150 Mbps at 250m, while future enhancements to the standard will allow longer distances and faster speeds
Finally, the cost to implement these alternative solutions is significantly less than FTTP, while offering speeds in excess of the targets. As of today, a brownfield FTTP deployment cost more than 2x more than other technology solutions per premise.
A shift in direction accelerates deployment
By building the network to meet the current needs, while including capacity and upgrade paths to allow for future evolution in demand, has enabled NBN to make significant progress in its deployment.
At present, nearly two-thirds of the nation are either in design, construction or already able to order NBN services. During FY16, NBN doubled the number of premises Ready for Service (2.89M), doubled the number of premises activated (1.1M) and doubled the revenue to $421M.
As shown, peak build will occur in FY 18 with 3.7 premises made RFS, while peak activations will occur in FY 19 with 2.5 million premises activated.
By the end of the build, the expected penetration rate of NBN will be 68%.
Surprisingly, despite the availability of high-speed packages to end-users, 33% take a minimum speed package (12Mbps/1Mbps), while 45% use 25Mbps/5Mbps and 16% select 100Mbps/40Mbps. There are currently no 1Gbps packages available on the NBN network, despite having nearly 1.6 million premises wired for FTTP. A challenge for NBN will be to get end users to move up the speed chain to higher cost packages.
A Pipeline of Innovation
NBN was very clear to fend off criticism of its decision to move towards a technology mix, by showing the evolution path to all of its technology choices through 2020.
For example, GPON can evolve to XGS-PON and/or NG-PON2 to offer speeds up to 10Gbps, FTTN/B/dp locations can move from VDSL2 vectoring towards G.fast, while even G.fast can evolve to support multiple enhancements, before moving towards XG-Fast. Additionally, some of these locations will be migrated towards FTTP. For its HFC networks, DOCSIS 3.0 will evolve to 3.1 and eventually towards a Distributed Access Architecture with virtual Converged Cable Access Platform (vCCAP). Carrier Channel Aggregation can be introduced into Fixed WIreless networks for speed gains, while Additional Satellite capacity and new modems up the speeds on Satellite broadband services.
Tackling the Challenge
Australia is a country with a population of 24 million with approximately 12 million premises. While a large majority of the population resides in urban areas – there remains a portion of the population that is considered very rural.
While most operators will choose not to service these “difficult to serve” locations, NBNco is actually prioritizing these unserved and underserved locations as part of its build. Per NBN, there are approximately 1.8 million premises that fall into this category, primarily located in the regional and remote areas of Australia, or small pockets of poor service in metropolitan areas.
And if you want to truly understand rural – go visit Alice Springs or take the train across the Nullarbor Plain.
Technology Partners
NBN is working with a number of technology partners for its network deployment. This includes Nokia Networks for its FTTP, FTTN, FTTB and FTTdp solutions; ARRIS for its HFC solutions; and Ericsson for its FWA solutions. For satellite, NBN launched the Sky Muster satellite, with network operations handled by Ericsson and Flight operators handled by Optus.
At present there are over 50 Retail Service Providers (RSPs) offering NBN broadband services.
Expect the Unexpected
Even as I write this blog, the criticism against NBN and its deployment plans remains rampant. Everything from “they should have continued down a FTTP path” to “its taking too long to build” are stated daily.
It should be noted that it took Verizon over a decade to pass 20 million homes with FTTP – most of them in high density areas, with overhead cable. And even with this aggressive buildout, there are many premises in metro markets such as Boston and NYC that do not and will not have access to its FiOS service.
I live in a non-FiOS Verizon market and it is pretty frustrating to be marketed services that don’t and will not exist.
Google Fiber is also learning how hard it is to go all fiber as it drastically cuts back on its roll-out plans and slows the build in its current market.
Building this new infrastructure requires significant civil engineering and design work. In addition, there must be access to power and existing infrastructure such as the associated telephony connection cabinet. Others areas of considerations include access to the location for both installation and maintenance, surveying for underground structures or obstacles; as well as the visual impact on the area – nobody wants a big telephony cabinet blocking their views. An unlike some countries such as China – with its extensive greenfield opportunities – most of the premises in Australia are considered brownfield – meaning there is no cookie cutter deployments. Each and every premise must be surveyed and engineered for connection to the network.
The lesson: expect the unexpected – because it will happen everytime. No two deployments are the same and surprises are present at every turn.
Is NBN perfect? No. Could it have built a FTTP only network? Yes – but it would have taken far longer and cost significantly more. For those without access to broadband – time is of the essence as the world quickly moves towards a digital economy.
And as we are seeing with NBN – the goal is to connect everyone – as quickly as possible, by using a variety of technologies and architectures that all offer an evolution to gigabit or greater speeds.
Kudos to NBN for taking on a challenge to offer Broadband for All. While other countries talk about it – Australia is actually doing it. If NBN can achieve its goals (and it appears they have the right team in place to make this happen) – then Australia will likely have something no other country in the world has – Broadband for All by 2020.
Full disclosure: Nokia Networks and NBN hosted a handful of analysts to gain a better understanding of the NBN network and the challenges it faces to provide broadband for all.