Costs delay feed to rural areas

By RICHARD WOOD

Satellite companies and their local partners are ready to supply two-way internet to rural schools and communities.

But the high cost of terminal equipment and the Government's requirement for high speed in both directions is holding up deployment.

Satellite operator Optus is trailing a satellite-based high-speed two-way internet service to meet the Government's needs.

The company already claims New Zealand customers for its two-way internet offering with a slow uplink speed of 77.6 Kilobits per second (Kbps) and a downlink of 200 or 400Kbps.

Country manager Tony Hill said Optus was already supplying schools in New South Wales and Victoria off the satellite it would use here. Data would be bounced off the satellite to the Optus hub in Sydney and onto the internet from there.

Hill is wary of the Government's region by region tendering proposal, saying interconnection between different regional operators could be a problem. He would prefer a national solution.

"You want to be able to go direct without too many links in the chain," he said. "The main issues will be interoperability, different levels of service and different pricing structures."

The cost of end-user satellite equipment is a significant obstacle to the spread of satellite services.

Hill said regular data costs were similar to Telecom's wire-based Jetstream fast internet services.

But the upfront cost of end-user equipment was about $7000, compared to about $300 for Jetsream.

Optus was working with wholesale partners, who would provide variations on charging by using financing options, Hill said. But, because of the cost, two-way internet's most likely usage would be where Jetstream was not available.

But cost is expected to drop over time. TVNZ Satellite Services technology manager Doug Stevens said terminal equipment for two-way internet was getting down to $4000.

And one way to cut costs was for a community to share the uplink, using a technology such as broadband fixed wireless to link locally.

Stevens said some of the satellites servicing New Zealand were more suitable for two-way high-speed internet services than others. Newer satellites were more powerful and specifically designed for internet access, so they required smaller and less expensive dishes.

Early next year, he said, Shinawatra, a Thai company, was due to put up a satellite dedicated to providing two-way internet.

The Herald reported last week that Dutch-based New Skies Satellites will reposition a relatively modern satellite, suitable for two-way internet, over the Pacific in August. It is keen to be involved in supplying to rural schools and communities and expects telcos or ISPs will retail its services.

Philip McIntosh of internet provider ihug, a supplier of one-way internet satellite services, said ihug was ready to move to two-way.

Cost, not technology, was the issue but, with Government interest, ihug could look at such a service, which would involve upgrading ihug satellite dishes.

TelstraClear also is keen to offer two-way satellite services.

But, spokesperson Muneeb Bhatti said it would have to offer extra services.

"Only offering an internet connection alone was not enough of a revenue net."