KEY POINTS:
Australian Prime Minister John Howard has given the green light for a multibillion dollar rural broadband initiative that will involve nearly A$1 billion in Government funding.
The main details are:
- Opel, a joint venture of telecoms operator Optus and rural service provider Elders gets A$958 million ($NZ1.08 billion)from the Australian Government's Broadband Connect Infrastructure, chipping in A$900 million of its own cash (that's not a bad incentive, basically slightly better than a dollar for dollar subsidy from the Government)
- Opel builds a wireless network in rural areas to extend broadband reach to 99 per cent of the population - 12Mbps (megabits per second) by the middle of 2009 (that's a fairly ambitious target for wireless but good on them for setting the bar high).
- According to early reports coming out of Australia, Opel will consist of 1361 wireless broadband sites providing fixed wireless coverage to hundreds of thousands of homes and businesses.
- Opel will use ADSL2+ technology in 321 of Telstra's exchanges to reach customers via fixed copper-line connections. (That's a major wireless implementation, I hope the technology is robust).
- An expert panel will now consider competitive tenders for building a fibre network in the main cities. (This where the real competitive action will be - everyone wants a slice of the Government cash that will be chipped in here. Extend AAPT through the G9 consortium to be involved in the bidding).
- Legislation will be introduced to protect the Australian Government's A$2 billion pool of capital to provide ongoing income to be channeled into telecoms services. (Good idea, the interest alone would fund several projects a year).
Howard has dropped a reasonable spoiler to lessen the impact of the opposition Labor Party's proposed national fibre plan. But Opel is heavily reliant on fixed wireless broadband technology.
If we've learnt anything from the experience of our own rural wireless broadband operator Kordia, it's that the equipment and installation associated with any rural broadband service have to be attractive enough to encourage farmers and rural communities to sign up.
Part of making it attractive is giving them a decent telephony option, allowing them to snip their line with Telstra once and for all.
It will be interesting to see exactly what technology Opel uses - down to the equipment that will sit in rural homes and businesses.
A plug and play, easy to use, set-up is crucial to Opel's success.
There will be many people in Australia who see this a "quick fix" to Australia's rural broadband woes.
It certainly won't help the economics for players like Unwired and isn't nearly as ambitious (or expensive) as rival plans to push fibre further out to the regions.
But at least wireless is quick to roll out - Optus can probably just put equipment on its existing cell towers to get coverage up fairly quickly. The next juicy tender is for fibre in the cities.
All of this is making the New Zealand Government's broadband plans look pretty anaemic.
When is it going to bite the bullet too and present some serious cash and investor incentives to get a partially public-funded network off the ground?
