Feeds

Well, that about wraps it up for the NBN

Stop looking at South Korea, says Turnbull

Beginner's guide to SSL certificates

The opposition spokesperson for communications in Australia, Malcolm Turnbull, has delivered a damning blow to the government’s plans for a National Broadband Network (NBN), citing international data to show declining demand for services at 100 Mbps.

Since the NBN’s business plan assumes a fairly strong takeup of 100 Mbps services, a lack of demand at that speed pots the network’s underlying assumptions into the corner pocket.

In this article, Turnbull points out a worrying datum: the number of subscribers to 100 Mbps services in South Korea is actually falling, he writes. Between January 2010 and April 2011, carrier KT shed about tens of thousands of subscribers for its top speed service.

It’s a damning observation: people abandoning the kind of cheap 100 Mbps service that’s the envy of netizens around the world. If the poster-child of world fibre broadband can’t hold customers to the top speeds, what hope for the rest of the world?

And, of course, since South Korea has moved earliest and fastest on rolling out high-speed networks to its citizens, a take-up failure would be the sort of news that should send shivers down telco and policy-makers’ spines all over the world. If around $30 per month isn’t an attractive price for fast broadband, how in the world would Australians be persuaded to shell out $50 per month of our hard-earned for the same thing?

(It would be both tangential and unfair to point out that first, Australians pay over-the-odds for everything under the sun except coal; and second, that our $30 DSL broadband services sit on top of a copper line for which you have to pay either Telstra or your naked DSL provider).

Yep, data like that is a real problem.

Because it’s incomplete – and its incompleteness is its downfall. Because I’m a data geek – in another orbit, I’m an analyst specializing in telecoms – something didn’t ring true, so I decided to go looking.

South Korea doesn’t just have one fixed broadband carrier; it has three. KT, whose data Turnbull cites, along with LG U+ and SK Broadband. LG U+ offers 100 Mbps both on its hybrid fibre-coax (HFC) network and under the “optical LAN” brand, while SK Broadband identifies its services as “Fibre LAN” in its financial reports.

You can tell what’s coming, can’t you? The 100 Mbps market in South Korea isn’t declining: it’s booming. A country that also offers a fair number of wireless broadband services is still adding new fast fixed broadband users at an impressive rate.

Over the January 2010 to March / April 2011 (there are inconsistencies in the reporting dates for the three carriers), net adds for 100 Mbps services totaled nearly 850,000 new customers. LG U+ added 500,000 subscribers (Excel fact sheet here), while SK Broadband connected 420,000 new subs (here). If this information is correct, the market didn’t shrink or even flatten – overall, it grew by nearly 14 percent, with KT the underperformer of the industry, losing its customers to its competitors.

How would Turnbull – who is both intelligent and thorough – be misled?

I suspect it arises from one assumption: incumbency equals domination. It’s true in most markets, but in the high-speed fibre broadband market in South Korea, it’s not. KT is the incumbent, but in this particular segment, it’s the minnow. I can only assume that either industry structure, regulation, or aggressive competition have given South Korea a market that’s different to what you would expect.

In South Korea, the incumbent doesn’t dominate the fast broadband market: its million 100 Mbps subscribers (roughly) are more than doubled by LG U+ subs at 2.3 million, and more than trebled by SK’s 3.5 million.

Perhaps the NBN’s supporters can still look treat South Korea as a leader after all. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Sea-Me-We 5 construction starts
New sub cable to go live 2016
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
BT claims almost-gigabit connections over COPPER WIRE
Just need to bring the fibre box within 19m ...
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
Surprise: if you work from home you need the Internet
Buffer-rage sends Aussies out to experience road rage
EE buys 58 Phones 4u stores for £2.5m after picking over carcass
Operator says it will safeguard 359 jobs, plans lick of paint
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.