Analysts: NBN questions need answering

ICT analysts welcome the Federal Government's NBN decision but also raise concerns

Comments

ICT analysts have welcomed the Federal Government’s flip flop on the NBN but raised concerns its plan lacks detail.

In a surprise move, the Prime Minister, Kevin Rudd, said the Government would spend $43 billion to create a new wholesale-only fibre optic network across Australia. The government-majority owned National Broadband Network Corporation will work in partnership with the private sector over the next 7-8 years to build the network across regional and capital cities

IDC telecommunications program manager, David Cannon, said the announcement was both bold and unexpected. But he also said it left many questions unanswered around four key areas: The legislative changes that would safeguard the investment, legal issues relating to existing infrastructure return on investment, the manner in which the roll out will occur and the cost of access.

“The government is also going to need people with skills and the IP to build the network,” Cannon said. “I expect other telcos, especially Telstra, will be working to safeguard their IP and people in the short term.”

Cannon said the timeframes mentioned by the government in the initial announcement were not unrealistic, provided the legislative changes and hunt for staff progressed smoothly.

“Telcos will have to start focusing in over the top services in the long term,” Cannon said. “Cloud computing, and networking in the cloud will become a key consideration for service providers once access becomes commoditised through the NBN.”

Ovum research director, David Kennedy, said the change in direction was a sensible and realistic one. However, he had similar questions to Cannon.

When it came to the construction of the NBN, Kennedy said the enterprise created by the Government would tender out the construction of the network, avoiding the need for it to acquire its own IP and staff.

“I expect similar people will be involved that were involved in the abandoned tender process,” Kennedy said. “The key difference is that before, there was so much uncertainty around the regulatory lines, which will be resolved under a Government-controlled organisation.

“There’s much more structure to this process. While the Telstras and construction companies will still be involved, their involvement will be more like a conventional tender process.”