Telstra and the Federal Government have both indicated they will be releasing plans for a “multi-technology mix” of fibre and wireless to be used across the nation, but the rollout of such a network is likely to be far more costly than the current NBN, which currently covers just a few thousand premises.
The cost of the network is estimated to be $2.5 billion over the next 10 years, and has led to speculation the Government may consider a blanket rollout of fibre to the node to address the problems with existing fibre networks.
But Telstra is likely not to be the only company in the market that will be deploying such a mix, as many smaller ISPs are also exploring a “fibre to the home” model.
Telstra has been exploring this option, which would see its existing copper network switched to fibre-to-the-node technology, and the company recently announced that it would begin a pilot trial of the technology in South Australia.
But Telco’s fibre-network rollout is not just about cost; it’s also about the network’s ability to support an unlimited amount of internet traffic, a concept that is crucial to its business model.
Telstra is already the most expensive ISP in Australia for providing fibre to premises, and this year the company’s fibre network was upgraded to offer speeds of up to 1.7 gigabits per second (Gbps), which is 10 times faster than its previous fibre network, which was upgraded by just four Gbps.
Telstel is also one of the biggest ISPs in Australia, with an average of $1.8 billion in revenue, according to its annual report for the financial year to December 2017.
However, that revenue was down from the previous financial year, when Telstra reported $1 billion in revenues, down from $1,600 million in 2017.
While Telstra may have a higher revenue than competitors like Optus and iiNet, its overall revenue has been declining over the past few years, with revenue dropping from $5.3 billion in 2016 to $4.9 billion in 2017, according the Australian Communications and Media Authority.
The company has also been struggling to attract broadband customers in Australia.
A recent report by consulting firm Deloitte found that the majority of Australian broadband customers are now using mobile devices, which means Telstra’s business model has been hit by declining revenue from mobile devices.
However, Telstra said in its annual results for the year to June 2018 that the “unmet demand for mobile broadband service” is not an excuse for the company to not invest in fibre-based networks, as it was a factor in the company being unable to increase broadband speeds in the future.
Despite these challenges, Telstel has been investing heavily in fibre to all.
In 2016 Telstra announced it would spend $10 billion on its fibre network by 2021, with the majority coming from its acquisition of Optus.
Telstra has also launched the fibre-technology initiative, which it hopes will allow the company and its customers to “build a competitive and resilient network”.
“We believe that the future is broadband.
Our network will enable the next generation of high-speed internet access,” Telstra chief executive Steve Dickson said in the 2016 results.
However, the NBN is currently only a small part of Telstra operations, and it is not yet clear if Telstra will have a strong presence in the Australian market, as the NBN has been a very slow rollout.
Telus currently has about 2.2 million premises connected to the network, with Optus at 2.4 million premises, but Telstra had to delay its rollout due to the failure of its fibre-fibres in South Africa, and as a result Telstra plans to continue its fibre deployment in South America, the Middle East, Africa, Asia, and Australia.