Delay in Telstra EGM on NBN another reminder of Gillard’s recklessness
So we learn today that Telstra will not be holding a shareholders meeting to approve the deal with the NBN by July 1. Apparently the NBN world is not going to come to an end, although we were told last year by Julia Gillard and Stephen Conroy that unless the NBN legislation was passed by Christmas the utterly critical shareholders meeting could not be held by the equally critical date of July 1 2011.
One assumes that the delay is the consequence of Telstra’s management taking great care to ensure that its shareholders are protected in what will be a very large and very complex transaction. No doubt central to the negotiations is the very high probability that the NBN is never completed. Most people in the industry I talk to are of the view that even if the Labor Party were to stay in Government the crippling costs of the project will cause it to be abandoned, at least in the form it has been announced.
So if partial completion only of the NBN is a real risk, Telstra will be insisting that the cost of that risk is borne by the Government and one suspects that this issue is one of the reasons for the delay.
But above all else, this delay shows Telstra in stark contrast to the Government. Telstra is taking its time to make sure that the deal is properly analysed and documented and in a form which will be of advantage to its shareholders. The Government on the other hand paid scant regard to the interests of its shareholders – taxpayers – and rushed headlong into the deal without any proper analysis, let alone any consideration, of whether the objective of universal fast broadband could be achieved at a lower cost.
14 Responses to “Delay in Telstra EGM on NBN another reminder of Gillard’s recklessness”
I am so glad some careful consideration and analysis is happening to hopefully bring some sanity to this NBN. It seems such an enormous waste of money in light on world events. Imagine what could be achieved in Australia with renewable energy supplies with that sort of investment. By the time it comes around everyone will have tablets and want wireless Internet anyway.
The problem Jo, is that it’s acknowledged by everyone in the industry that wireless cannot replace fixed networks, due to unassailable physical limitations associated with spectrum availability and other factors. We would all love to go wireless, but when a single strand of fibre can carry 69000 times more data than an entire wireless cell tower, it’s obviously the more future-proof solution.
I’d suggest you read this for more information:
http://nbnmyths.wordpress.com/why-not-wireless/
Jamie, shame to see you have been sucked in by the clap trap on that website you posted. It is obviously a pro-NBN site that plays loose with the truth. A number of issues about the site:
1. Whilst I don’t say e figures on the site are wrong, they must have tried hard to find places to get such poor results. Even living in regional NSW with Next G I achieve better results then they claim;
2. Both sides are proposing using wireless only options, the only difference is the number of people that this option will apply to;
3. The debate is not about wireless v NBN, it is more about NBN v FTTN.
The best description I have heard about the NBN and it being a waste of money was from a IT professional who described it by saying “to move large amounts of traffic we are all happy to have the Pacific Hwy, but that doesn’t mean we need a 4 lane road down each street”.
FTTH should be reserved to those who need it, such as schools, hospitals & large corporates. For the rest of Australia FTTN or wireless will provide sufficient speeds. Look in Tasmania and you will see that almost everyone signing up the ISP’s on the NBN is taking a package of 12Mbps or less.
The NBN remains a complete waste of money. You should read some of the comments by Warren Buffett regarding businesses that focus on delivering goods or services more quickly (such as motor vehicle, planes & internet) and their ability to make (or rather lose) money. Remember, the Juliar Gillard Government maintains that this is not social infrastructure (like a hospital) but rather an investment (such as the CBA was) and will be making a commercial return for the tax payers of Australia. This is the only reason the NBN costs are removed from the Budget.
Jamie, further to my previous post. I have just done a Speed test on my Apple iPad which is connected to the net using MyWi on my Apple iPhone 4 and the standard Telstra Next G network. I am sitting in a motel room in Nelson Bay as I do this.
Your website claims that in Sydney, using the Telstra 42Mbs experimental network, the best result was download: 1.37 Mb/s and upload: 0.72 Mb/s. Using the same network in the Blue Mountains (possibly inside a cave) it achieved download: 0.26 Mb/s and upload: 0.06 Mb/s.
Well using the current Telstra Next G network in a regional area I just recorded download: 2.4 Mb/s and upload 2.28Mb/s. This is far higher then the results on the website you refer to.
Hopefully this shows you why you should not be suckered in by the clap trap that site is claimg to be fact. They have used an experimental network not a real world network. The one they quote is currently not commercially available and therefore should not be used as a comparison.
Even connecting at the paltry speed of 2.3 Mb/s I am able to do everything I need to on my iPad including watching videos and downloading apps/music. Also, even after the NBN is rolled out, I would not see any improvement in the speed I am receiving unless the wireless network is upgraded.
One of the biggest thing the pro NBN supporters ignore is that we are becoming a more mobile community and as such the NBN will be completely useless unless every cafe, hotel, motel and other hotspot provider upgrades to providing higher speeds via their wi-fi networks. Given the additional costs involved in doing so, most will opt for the lower speeds which privide more then adequate speeds to their customers. In fact these speeds are the same as can be achieved from FTTN.
As someone who travels extensively with work, I can tell you that the wireless network is far more important for conducting business then wi-fi hotspots. The NBN will do nothing to change this that FTTN could not for 20% of the cost.
I also use the Telstra NextG network, and I have to agree with the site I referred to. The very best speed I have ever achieved is 4Mbps, but I usually get between 1 and 2. The other issue is the cost, which is double an NBN connection for 1/10th of the data allowance. For the vast majority of people, wireless will be a complementary service, not a replacement. For physical and cost reasons, it has to be that way.
Not sure what you mean about an “experimental network”. The NBN is available commercially at the speeds listed in the current Tasmanian sites. Check the iiNet and Internode NBN plans. The NextG network isn’t experimental at 42Mbps, that is the quoted commercial metro speed availability.
You say that most people in Tasmania have connected to the NBN at “12Mbps or less” This is demonstrably false. For a start, the slowest speed offered on the Tasmanian trial sites is 25Mbps, 12Mbps isn’t even available. Additionally, one of the Tasmania ISPs (Internode) has stated that they were surprised by the number of customers who were choosing the top 100Mbps option. There were so many that they were forced to upgrade their bass strait backhaul connection to cope with the demand. I can’t link here, but you can Google it.
You miss the entire point of the NBN when you say that your current connection copes with your needs. It’s not about what you currently use, it’s about what you (and most people) will need in the future. 15 years ago, we were in awe over 56k dialup modems. What will we expect in another 15 years, as we move to interactive 3D, HD video technologies for a wide variety of applications?
FTTN makes absolutely no sense. To get improvement we would need to build tens-of-thousands of nodes, run fibre to them, power them, and run new copper from the nodes to ~80% of homes (since good FTTN needs VDSL, which needs 2pr of copper). Telstra say that only 20% of homes have 2pr of operational copper installed. I’d suggest you read this:
http://www.theage.com.au/news/business/leapfrog-fttn-and-howard-goes-to-top-of-the-class/2007/05/15/1178995155898.html
Jamie, Did you notice the Telstra Speedtest rests were for a server 1200mi from the person doing the test vs <50mi for the others? Does that alone not tell you the results were rigged to give a false reading.
You say you normally achieve higher results yet you seem to place you faith in this site. Are you simply lookin for a reason to back the NBN ?
As for future proofing, wireless allows this – the NBN doesn't.
FTTN could be achieved for 95%+ of the population for less than 25% of the cost of the NBN, as per Telstra's submission to the Rudd Government. This was in line with the term of the original tender, as opposed to the Rudd Government's decision to introduce a $43B NBN with less than 24 hours planning.
Also, how do you know the cost that will apply to NBN connections? Do you have a crystal ball? Even the NBN Co has admitted that they do not know what the cost will be once the trial period ends. Analysts have indicated that to make a commercial return on it's investment, which is 100% debt funded, the NBN Co will need to receive at least $100 per month from every household in Australia. This is the wholesale price they need to achieve, not the retail price paid by h households.
The NBN was & remains a poorly thought out policy that should never be completed.
If you love it so much I will gladly make a deal with you that I will give you $1B for every $1B it comes under budget if you agree to do the same for every $1B it runs over budget.
For some reason when using a NextG wireless connection it usually gives your location as the centre of Australia no matter where you actually are in Australia. I’m in Sydney, but if I choose the Sydney server it says I’m >1200miles away, which obviously isn’t the case.
I didn’t say I normally achieve higher results. I usually get 1-2Mbps. Either way it’s moot. Even 5Mbps is a pitiful connection speed, and nowhere near high enough to support future needs in a world where 100Mbps is rapidly becoming the standard. Even the USA has set the objective for 70% of their homes to get 100Mbps fixed services within 10 years.
I don’t know where you get your information, but the final wholesale prices for the NBN have been set. They announced the pricing last year. Monthly wholesale prices are: $24/month for 12Mbps down/1Mbps up, $27 for 25/5, $30 for 25/10, $34 for 50/20, $38 for 100/40, $70 for 250/100, $100 for 500/200 and $150 for 1000/400.
The final retail prices have not yet been set by ISPs, because they haven’t had to do it yet. They will be the wholesale price, plus a retail margin. With the mainland sites coming online in the next couple of months, you’ll see the final retail pricing. But to put it in perspective, the ISPs paid a flat rate of $300 for 12 months in the tassie sites, an average of about $25/month, and wholesale ADSL1 costs about $26/month from Telstra.
I thought it was common knowledge that Telstra stood to make more cash from android mobiles and whatnot.
We have no choice but to abandon US style business models for telecommunication and look to a model that fits within the Australian context. Unfortunately this means massive expenditure by Gov’ts or the only people with high quality service will be in the major Capital cities. I am not particularly happy with this scenario but it is the scenario we are confronted with and I think that a national broadband plan utilizing fibre will bring a dynamic change in the way Australians use telecommunication services and will bring about products over the next few decades that have not even been thought of yet. This kind of dynamic Australia is one I want to be a part of. What I do not want to be a part of is Liberal Party conservatism that thinks attack is the only form of debate.
Excellent post Timothy. You are spot on.
Considering that there are two parties to these complex negotiations (ie Telstra and NBN Co), doesn’t it stand to reason that the delay in reaching an agreement comes down to BOTH parties ensuring they get the best outcome for their “shareholders”?
I’m sure if NBN Co were happy to “be reckless”, then negotiations could have been completed long ago, to the detriment of Australian taxpayers.
I certainly hope Malcolm, that by the time of the next election, your party has a considerably better policy than “12Mbps is enough”. NBN or not, that is backward thinking that needs to be vastly improved if we are to remain competitive with the hundred of other nations rolling out fibreoptic networks.
[...] Turnbull said in a blog post that it could be assumed that the delay was the consequence of Telstra’s management taking “great care” to ensure that its shareholders were protected in what would be “a very large and very complex transaction”. [...]
@Jamie
“NBN or not, that is backward thinking that needs to be vastly improved if we are to remain competitive with the hundred of other nations rolling out fibreoptic networks.”
Could you please tell me which countries are rolling out FTTH networks on a national basis (90% of the country) that are NOT densely populated Asian countries or island nations
Because I definitely can’t find it
I don’t have an issue with FTTH being rolled out where it needs to be or where there is high demand, but that is very different to what is basically “everywhere”.
We are not rolling out fibre to “90% of the country” we are doing it to “93% of the population”. They are two very different statements. The 93% is basically urban areas, so using a total population density for all of Australia as a comparison is ridiculous.
The OECD average is currently 16% Fibre-To-The-Home (FTTH) availability.
Australia currently has a pitiful <0.4% penetration. We are ranked 24th out of the 31 OECD countries for fibre availability.
Fibre networks that are currently being installed in (or already have been):
Austria
China
Denmark
Finland
France
Hong Kong
Iceland
Italy
Japan
Netherlands
Peru
Singapore
South Korea
Spain
USA (Verizon Fios passes 15 million premises – more than the NBN)