AAPT, ISP Q&A Series

The ISP Q&A Series is a look at the opportunities Australian ISPs have for resellers. It also profiles their views on some of the more contentious issues affecting the industry. In the seventh part of this ARN series, AAPT chief operations officer (COO), David Yuile, talks about the wholesale market, his outlook for the industry and why Australia Post doesn't open your mail.

You can also view the responses from:

1. What is your company's background?

AAPT is Australia's third largest telecommunications company and one of only three providers to own and operate a national fibre network, enabling us to provide homes and businesses in Australia with world-class scaleable data solutions over an advanced communications infrastructure at very competitive rates.

We have an extensive DSLAM and mid-band Ethernet footprint and large-scale peering and caching arrangements. Approximately 85 per cent of our business customers and 81 per cent of our residential customers reside within our footprint.

Earlier this month, we announced plans to increase the capacity of its transmission links between Brisbane, Sydney, Melbourne, Newcastle and Canberra ten-fold within six months. The next step in our tier one network expansion program, which saw the completion of a $30 million core IP network and MPLS edge earlier this year.

We’ve recently released a suite of new Ethernet products into the wholesale and retail business markets via 100 plus exchanges, with the capability to service more than 150,000 businesses nationally. In a first for Australian businesses, AAPT’s Ethernet product suite offers Ethernet with speeds up to 10 gigabits per second and end-to-end performance guarantees.

AAPT is a wholly owned subsidiary of the Telecom New Zealand Group.

2. Please explain the opportunities you have for resellers.

AAPT is a tier one carrier, offering Australian wholesalers real choice. At the heart of our success is our wholesale business, which counts major international carriers such as BT and AT&T among its top customers. We’re the only provider which will not compete with our resellers at the retail level.

AAPT was also one of the first in the industry to offer advanced services over an IP/MPLS terabit service router platform.

Our new Ethernet suite represents our focus on developing innovative products across a reliable, robust and secure national network – coupled with the simple, straight forward service customers expect.

3. What additional opportunities do you see for resellers who want to use your products?

AAPT is committed to becoming the carrier of choice in the in reseller market, providing a broad suite of Ethernet, IP and Ethernet virtual private networks (VPN) and advanced voice over IP (VoIP) products and services for wholesalers with the surety of a consistent, reliable and straight forward customer experience.

We’re currently seeing explosive growth in data and IP traffic. We’re Australia’s leading provider of mid-band Ethernet, having partnered with industry-leader, Hatteras Networks, for the past three years. Our Ethernet platform has been tried and certified by some of the biggest players in the world, including British Telecom and AT&T.

For us, it’s all about offering a deeper, more transparent view of our network so resellers can better manage their customers through a range of business-to-business tools and portal technology.

A mantra we often refer to internally is, “if we’re easy to use, we’ll be easy to choose” – that’s our goal. We leverage Alcatel-Lucent’s Service Aware Manager (SAM) platform, simplifying and automating our provisioning and service assurance processes for our customers.

We’ll also launch a range of infrastructure-as-a-service (IaaS) offers to compliment our existing MPLS offerings with services such as content caching and acceleration.

4. What are some of the challenges they should be aware of?

The reseller market is a tough game. We strongly believe our point of difference is our commitment not to compete with our resellers in the retail space, and the service we provide.

5. What is your prediction for the ISP market in the next 12 months - do you forecast any big changes?

We expect to see further consolidation in the marketplace. IPTV will undoubtedly start to emerge in many shapes and forms, but will still be nascent and video traffic will continue to dominate the growth trends.

Naked DSL in its current form will be significantly stunted, due to the change in economics from the Australian Competion and Consumer Commission’s (ACCC) recent draft indicative regulation for ULL.

6. What is your stance on ISP content filtering?

This is clearly a very complex issue. We work consistently with the Department of Broadband, Communications and the Digital Economy (DCBDE) on a range of industry issues and we’ve met specifically to discuss this topic. We’re absolutely supportive of protecting consumers. However, our main concern is that this protection should be implemented in a very simple, straight forward way, determined by the Government as we don’t see ourselves as a policeman.

7. If content filtering were to block World of Warcraft, how much customer bandwidth traffic will you lose?

While we vigilantly monitor overall traffic flows, we’re a transit network, thus we’re unaware of the nature and make-up of the content and information our customers use. This is also tied up in privacy and other related issues.

8. What impact to you foresee the NBN having on your company?

We believe there are serious long term wholesale opportunities to emerge from the NBN build. We’re extremely well placed to integrate another network. We’ve made a significant investment in our Infonova platform, which we believe is a best-of-breed, future “Retail Co” reseller platform.

The platform currently leverages our own and third party networks and we’d welcome an opportunity to integrate additional networks.

Having said that, in the short term we’ll continue investing in fibre and DSLAMs to support our customer growth. We’ll adapt as the environment necessitates.

We also welcome a subsidised backhaul model, given the increase in ‘addressable’ market this would deliver. There’s no denying the role for the government to be involved in providing infrastructure in non-economic areas, as well as deploying fibre to educational institutes and hospitals.

9. Do you believe ISPs should be held legally accountable for what their customers share over the Internet?

Absolutely not. As stated before, we’re a transit network and in our view, this would be the start of a “slippery slope”. For example, we’re not responsible for conversations people have on their telephones or indeed Australia Post isn’t responsible for the content of the mail it delivers.

We’ll continue to work with law enforcement agencies and comply with legislation as required.

10. What are some of the key focuses for your company over the next year?

Over the past 24 months we’ve completely transformed AAPT’s business model, and we have a clear strategy in place to continue growing our business to our strengths: selling a refined set of products of services on our network footprint and providing a seamless customer experience.

Our core focus, and the philosophy we rally our people around, is about making life simpler for our customers. In delivering that ethos, one of the major initiatives for the next year is the simplification of many of our back-end systems to make ordering, provisioning and billing much simpler.

We’ll continue investing in our network expansion program. Increasing the capacity of our major transmission links is a critical element in delivering the highest levels of network redundancy and efficiency for our customers.

We’ll continue increasing our transmission capacity and growing our mid-band Ethernet and DSLAM footprint.

On the regulatory front, we’ve called for equal access and pricing, stronger regulatory control and a mandated ‘fast-churn’ process as critical enablers to competition and more choice for consumers.

We believe comprehensive regulatory changes must be enacted this year to ensure a robust competitive market capable of delivering freedom of choice for customers to change providers and lower prices for businesses and consumers.

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