Call me a nerd but new technology can still be interesting. Here in Oz we have a monolithic telecommunications landscape almost totally dominated by Telstra, the once government owned service. Caving in to demands from the capitalists successive governments have flogged off the public asset however the nature of the Telstra monopoly hasn’t changed. The current fracas over the so-called National Broadband Network is a case in point. By weight of its natural monopoly, Telstra really are the company most likely to succeed in running the NBN at a profit, sure others can build it but, as shown by the demise of OptusVision a few years back, in Australia a monopoly is pretty hard to beat.
Telstra knows this, they have been making noises about “scorched earth tactics” and so on since Conroy had the audacity to rule them out of the tender process. Probably Conroy and others know this too but the current game is to pretend otherwise. Admitting that only Telstra can make the NBN pay might raise the somewhat difficult issue of what to do about a monopoly power with an increasingly important role in Australia’s public life. Of course the government might decide to repossess the telecommunications infrastructure in the public’s interest but when I last looked out the window there were no flying pigs.
But the real point of this little rant is the fate of a much lesser know telecommunications player called Personal Broadband Australia. PBA was until recently the provider of wireless broadband around the country. The service was about comparable to low speed ADSL but it had the advantage of not requiring a fixed line to operate. iBurst was launched 5 years ago but probably struggled to gain market share especially once 3G arrived. Still some of us went along for the ride and it wasn’t a particularly cheap seat however like all seats it was better than standing. Then last December, iBurst was suddenly no more.
Now this little story has two twists a personal one and a larger picture. My first response was to buy a prepaid 3G modem from Optus but their data charges on prepaid are pretty hefty. About a week later 3 came along with their own prepaid mobile data package which was much more affordable. Gritting my teeth and silently kicking myself for having to buy two modems, I popped into 3 and signed on. After a little debugging with a non windows operating system I was up and running again. Sweet! Or so I thought. One thing I noticed when my 3 modem was hunting around for a carrier was that it reported connecting to a Telstra tower, hmmm. The network was still in the 3 domain so I guess they were buying capacity from Telstra which would explain how they were able to flood the market with a cheap offering without actually putting any infrastructure in place to support it (see my argument above).
Then the cricket started and for anyone who is both blind and hard of hearing, 3 is a big sponsor of test cricket. One of their selling point is getting coverage of the test matches via your 3G capable phone. Alarm bells should have sounded but the penny really dropped when my shiny new 3 internet connection slowed to pre dialup speeds. Despite claims to contrary, a network pipe does have a finite capacity. Just to be sure I fired up my Optus modem and bingo I am back in the world of the internet. So the 3 service is a dud, a marketing ploy by Hutchinson, the parent company of 3 to cash in on the demand for mobile internet.
The broader picture was suddenly illuminated today when I read that the mystery buyer of the iBurst RF spectrum was none other than Telstra. The demise of PBA as profit making enterprise left two things standing, physical infrastructure and RF spectrum. The gear can probably be sold to South Africa, but the spectrum has to stay put. The consumer market would sort itself out eventually and pity those like me that plumb for the 3 offering. However the upshot is that Telstra snapped up a competing service, closed it down and probably did a deal with 3 to onsell some capacity which ultimately increases Telstra’s total market share. That’s an inkling of what we might expect to see with the NBN as Telstra takes care of its business.
