NBN will fail without thriving reseller channel

The Federal Government’s $43 billion National Broadband Network (NBN) will be a failure without a thriving reseller channel, according to telecommunications carrier, Nextgen Networks.

Today, the broadband infrastructure landscape is dominated by Telstra and Optus. Companies that want to join the Internet game procure services through wholesale agreements with DSLAMs installed at remote exchanges dictated by the selected infrastructure owner. The bitstreams provided are usually ‘best effort’ Internet-grade and resellers have no control over service quality.

While this may not be an issue for residential customers, it is an unsuitable model for business users, Nextgen managing director, Phil Sykes, said.

The NBN’s proposed fibre-to-the-premise (FTTP) structure and open access nature allows opt-in service providers and value-added resellers to deliver content directly to clients anywhere in Australia. As a result, Sykes claimed Ethernet switches would supplant DSLAMs, giving providers complete control over service quality to implement different grades of service, depending on a customer’s specification.

This opened up opportunities for niche providers to flourish, he said.

“IT resellers have the biggest opportunity as they have the applications and the business solutions that will make a big difference in the SMB market,” Sykes said. “In the business marketplace, services providers can begin to net together multiple business locations across a completely fibre network into a private network solution. On top of that, they can start selling office applications from storage to computer resources, as in a cloud computing model and security services.”

Sykes also predicted a gradual decrease in bundled services that dominate the broadband sector. He argued the NBN would displace bundle packages, such as telephony and broadband, which are usually offered by infrastructure owners.

“I think it is going to level the playing field and cause organisations that currently bundle to have a far weaker position going forward,” he said. “We might see a gradual unbundling as more owners of content or applications, in the case of resellers, are seen to be operating independently. Residential and business end users might have two or three relations with different virtual suppliers over the NBN network.”

With the NBN slated to take seven to eight years to complete, Sykes said it was still early days to gauge its progress so far. But he was heartened by the Government’s recent regional blackspot program, which Nextgen has submitted a tender to.

“We are hoping there will be action as per the Government’s timetable towards making a decision on it by the end of this month,” he said. “If that can be initiated quickly, we would definitely be able to do the work very soon.”

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