What nbn’s XG-FAST trials mean for Australia’s broadband future

What nbn’s XG-FAST trials mean for Australia’s broadband future

New copper data trials offer nbn new life from an ageing network

The company rolling out Australia’s National Broadband Network (NBN), nbn, has successfully clocked up speeds of 8Gbps over 30 metres of copper cable in an XG-FAST lab trial conducted with technology partner, Nokia.

According to nbn, this data transmission speed works out to be around 900 times faster than the average broadband speed of 8.5Mbps being delivered to Australians in the second the quarter of 2016, according to figures in Akamai’s State of the Internet Report.

The company said its latest trial makes it the third network operator in the global market to run lab trials of XG-FAST technology, following in the footsteps of the UK’s BT last year, and Germany’s Deutch Telekom in February.

The trial with Nokia also helps to bolster the argument behind nbn’s reliance on the country’s existing copper network for the remainder of its network rollout, which is set to be finalised by 2020.

Nokia and nbn were able to achieve peak aggregate speeds of up to 5Gbps over lengths of twisted-pair copper of up to 70 metres during the trials. This is roughly three times the average length of copper lead-in needed from pit to premises, according to the company.

The XG-FAST technology can be deployed across a range of scenarios in the field, a valuable trait in nbn’s Multi-Technology Mix network rollout model, which is aimed at making the greatest use of existing infrastructure and thus lowering overall construction costs.

According to nbn, XG-FAST can be used to deliver services to Multi-Dwelling Units in a Fibre-to-the-Building (FttB) scenario, or via a Distribution Point Unit in a Fibre-to-the-Curb (FttC)-based network – also known as Fibre-to-the-Distribution Point (FttDP).

The trial comes at a convenient time, with nbn announcing its intention to deploy FttC services to approximately 700,000 premises on the NBN, many of which would potentially be ideal candidates for XG-FAST technology deployment.

Since its inception, the NBN rollout has become a political football, with Labor’s initial Fibre-to-the-Premises (FttP) approach being viewed by many as unreservedly superior in terms of speed and service, compared to the Liberal government’s current Multi-Technology Mix approach.

XG-FAST and other similar technologies provide a way for the current model to ensure increasing speed capabilities as the rollout wears on, and represents a way to upgrade the network beyond its 2020 completion date.

Certainly, Nokia’s fixed network business group president, Federico Guillen, thinks the technology will help nbn get new life out of the existing copper network into the future.

“nbn’s flexible approach to network architecture makes it perfectly suited to future upgrades based on emerging technologies like XG-FAST, which is designed to provide high-quality, multi-gigabit broadband over short cable distances,” Guillen said.

For nbn CTO, Dennis Steiger, even though the XG-FAST technology is still in its very early stages of development, the lab trial demonstrates the potential that the technology offers the company.

“XG-FAST gives us the potential ability to deliver multi-gigabit speeds over copper lines – virtually on a par with what is currently available on Fibre-to-the-Premises – but at a lower cost and time to deploy,” Steiger said.

“While our core goal remains to connect eight million premises to the NBN by 2020, we are keeping a close eye on new technologies like XG-FAST to ensure we can meet the future bandwidth demands of Australian broadband users.”

The use of XG-FAST and similar technologies aimed at pushing ever more quantities of data through copper wire will give the copper network a new lease on life and is likely to make the use of existing copper infrastructure increasingly desirable to nbn as the rollout continues.

This could be a good thing in terms of NBN connection cost over time, according to Intelligent Business Research Services advisor and former Gartner analyst, Geoff Johnson, even if it is ultimately unlikely to deliver better broadband prices for end customers further down the track.

“It will improve the cost structure somewhat,” Johnson told ARN. “nbn will have contracts with its installers, such as Visionstream, that tend to have a declining price trend. You should get better at this stuff as you build more. And these technologies will help to drive the connection cost trend down.”

The DSL protocol – which is set to be adopted by nearly 30 million end users globally by 2021 if a new Ovum report jointly sponsored by nbn and BT is to be believed – and FttDP are complementary technologies, according to Johnson.

As such, their use – along with the future use of XG-FAST – should help to incrementally reduce the cost of construction over time. This, however, won’t necessarily translate to lower service costs for resellers and end customers.

“The problem is that you’re going to have this new cost that’s going to be spread across the whole country, and everyone’s going to be obliged through the regulated wholesale monopoly to take NBN services at that basis for internet service provider competition. And that’s expensive,” Johnson said.

According to forecasts in nbn’s 2016 corporate plan, the cost for brownfields FttP network connection is estimated at $4400 per premises, while FttN connection is slated to be approximately $2300 per premises.

Johnson said that, regardless of the advances provided by the likes of G-fast and XG-FAST, and any resulting fall in connection cost per premises, service costs are set to remain relatively high compared to many of Australia’s closest neighbours.

According to an upcoming research paper by Johnson, the NBN’s funding method and construction costs will create broadband access with far higher prices than other countries, such as New Zealand. This will, in turn, lead to lower adoption in Australia than in other regions.

“In New Zealand, the government put a subsidy in place up front, and they’re [New Zealanders] paying so little for the faster speed; they are seeing much higher take up, at about 60 per cent. Take up is lower in Australia because the price is higher and speed is nothing to write home about,” he said.

Closer to home, Johnson expects to see many Australians opt for the NBN’s lower, 25Mbps speed option rather than the higher 50Mbps or 100Mbps options simply because of the price difference. This could, in turn, throw out nbn’s long-term business plan, which requires a certain number of customers to eventually take up the faster service.

A big part of the underlying issue, according to Johnson, is the NBN’s funding model as an “off-budget,” “commercial” government enterprise, rather than an “on-budget” entity.

“Although national wholesale coverage is likely to be achieved by 2020, its funding model makes access ‘not cheap’ and not compelling,” Johnson said.

Johnson mentioned that, at some point, the NBN project’s funding model will need to change in order for it to meet its long-term targets.

“Present or future governments will need to change the funding model of NBN Co [nbn] in order to hit end-user penetration targets, but are unlikely to do so until the lack of revenue becomes extreme and its ability to be privatised is threatened. This means that access network budgeting will also remain an issue for business,” he said.

For nbn CEO, Bill Morrow, the future looks bright. The company is in talks to secure non-government finances, and usage trends going forward look set to create some wiggle room on prices for resellers.

As long as data consumption continues to grow at 30 per cent each year, the average revenue per user is expected to go up – meaning nbn resellers will eventually have a lower unit price to work with, and could potentially pass savings onto end-customers.

“The cost per megabit per second actually comes down as usage goes up. This is part of our dimension-based pricing discount structure that we implemented recently,” Morrow said in August.

“Retailers can therefore push more data and make it more affordable to end users because they will have a lower unit price as they go forward. We know that the network can handle far more consumption that exists today without changing anything on the speed levels.

“[Consumers] have room to purchase up, to have higher speeds, to be able to accommodate the growth that we have in this plan out to 2020," he said.

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