Wireless broadband could prove a formidable opponent for the National Broadband Network (NBN) according to analyst firm, Frost & Sullivan, but industry analysts disagree.
The $43 billion NBN was announced early last month, with the Government opting to establish its own company to build the ambitious broadband infrastructure.
In a report titled, Australia’s National Broadband Network – Will the massive investment pay off?, Frost & Sullivan outlined a number of challenges that will affect the proposed national network, including the increase in fixed line users migrating to wireless broadband. This, the analyst firm conjectured, will be an impediment to consumer NBN adoption in the telecommunications sector.
“While the NBN will be viable for wider application, in terms of the telecommunications sector, I think the growth for wireless will continue and that will shave a significant amount of the NBN’s potential customer base,” Frost & Sullivan senior research manager, Phil Harpur, told ARN.
Frost & Sullivan estimates that by 2013, approximately 30 per cent of all broadband users will be reliant on wireless access services.
While Gartner enterprise mobility research director, Robin Simpson, agrees with the statistic, he expects wireless broadband users to also have fixed-line accounts.
“The challenge is the limited nature of wireless as opposed to the unlimited potential of optic fibre,” he said. “Speed is an issue since, at the moment, the fastest speed you can achieve with wireless is around 21Mbps whereas the NBN fibre infrastructure can promise at least 100Mbps if not more.
“Once customers experience this high speed, it will probably make wireless look less attractive.”
Simpson also dismissed mobile broadband as a long term competitor for fibre due to the way it delegates bandwidth.
“The shared structure of wireless means that if the technology becomes popular within one geographic area, the performance for all individuals will decrease,” he said. “But with the proposed fibre-to-the-premise structure, every customer gets their own high speed connection without having to split bandwidth with others.”
Telco analyst, Paul Budde, also contested Frost & Sullivan’s claim.
“Short term, wireless will certainly grow since the NBN is still years away,” he said. “But long term, it is like comparing apples with oranges. They both have a role to play.”
While Simpson did not see wireless as an opposition for the NBN, he anticipates the national network will promote mobile broadband consumption.
“The NBN provides a good back haul technology for wireless base stations so I won’t be surprised to see more Wi-Fi hotspots, which are expensive to set up with copper lines,” he said. “I really think we will get a growth in Wi-Fi and wireless broadband because it will be cheaper to connect base stations via the NBN.”
For a more comprehensive overview of the NBN, please visit our NBN: A timeline slideshow.