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2007 Australia - NGN, VoIP, FttN and FttH

This report provides high-level strategic analysis and forecasts of the NGN, FttN, FttH and VoIP and IPTV markets, as well as profiles on the key players in those markets. It identifies business opportunities, points out the hype and the pitfalls, and will be of assistance in making the right business decisions.

This report also includes:

  • Market Analysis 2007
  • Statistical overviews of the various markets
  • Overview of the major players in NGN, fibre networks, VoIP and IPTV
  • Overview of projects in NGN, fibre networks, VoIP and IPTV
  • FttH market analysis and analysis of the major FttN plans
  • Overviews and analysis of the VoIP market
  • The future of IPTV and web-based multimedia services

A huge change is taking place in telecoms infrastructure, with the traditional telephone systems being replaced by an IP-based infrastructure. This will facilitate data communications and file transfers via networked computers. IP is now adapted for voice communications (VoIP) and most corporate users are on IP networks. However the true value of IP is that it is becoming the core of the next generation public networks (NGNs), facilitating not only integrated billing and CRMs, but also affordable triple-play business models that seamlessly integrate voice, data and video. NGN projects are very complex in nature, however, and because of this their progress remains slow. For more information, see chapter 1.2, page 12.

In Australia Telstra has presented ambitious plans, both in relation to its networks and internal systems (the NGN project) and also in relation to the rollout of fibre networks. While there is a Mexican standoff between the government and Telstra on the regulatory issue, the incumbent simply can’t afford not to move towards its future. The pressure is also on Telstra, with other companies challenging it to build an alternative fibre network. For more information, see chapter 2, page 36.

Eventually the fibre network will be extended to homes and businesses, but in most situations this can be done on a demand basis. However, there is room for competition here and we have seen some cities and communities taking a leadership role. But for the time being most FttH projects are in new housing developments rather than in brownfield markets. For more information, see chapter 2.2.5, page 64.

Once NGNs are in place, there will be a major impact upon current infrastructures. Voice services will be placed under increasing pressure from VoIP; mobile communications will consolidate in mature markets but continue their spectacular growth in developing countries. Wireless broadband will also begin to challenge 3G, as it is much better suited for the delivery of mobile data, including mobile VoIP. For more information, see chapter 3, page 75.

IPTV delivers broadband to the TV and puts the viewer in control. With the arrival of the Internet, content became more important and video-based concepts were revived in order to deliver this content over the Internet. NGNs are needed for effective and efficient management of multimedia services such as IPTV. New fibre-based broadband networks are now rapidly moving into triple play business models, delivering voice, data and video services. The business model for IPTV, however, is still uncertain. Customers are more interested in the web-based broadband video applications than they are in IP-based TV. For more information, see chapter 4, page 106.

Key highlights:
NGN is a business strategy, a concept, that involves a range of technological elements, but as such is not a technology;
Telstra is showing international leadership with a strong commitment towards its own NGN;
Implementing NGNs is the most complex activity ever undertaken by the telco industry;
Delays and part implementations will be unavoidable;
Incumbent telcos are still driven by an underlying monopoly culture, this will make implementation unnecessary difficult;
NGNs can be less complex if they are aimed at a wholesale market (content providers, service providers, ISPs, corporate customers);
Without NGNs, fibre networks will not be able to manage the increased capacity and complexity of services offered over these networks;
While other telcos in Australia do have NGNs in place, their business models are still aimed at protecting their traditional voice and data products;
While NGNs would facilitate IP, IPTV, Triple Play, etc the future will be far less structured and ‘Layer 2’ open access will preferable sooner rather than later be provided;
The reality is that ‘NGN-alike’ services are already available as web-based products, without the need for network complexity;
The majority of Australia will, over the next 10-15 years, be connected to FttH;
Low density areas will be covered by wireless broadband solutions; This process will be evolutionary, fibre will be brought deeper and deeper into the network - increasing speed and quality ‘on the go’;
Most new housing development estates are now linked to FttH networks; National strategies are required to align the various plans from the Government, Telstra, G9, OPEL and others.

Data in this report is the latest available at the time of preparation and may not be for the current year.

1.1 Market analyses
1.1.1 Analysis of Telstra’s NGN progress
1.1.2 NGN in action
1.1.3 It’s worthwhile fighting for open networks
1.1.4 ACCC needs to facilitate NGN industry workgroup
1.1.5 Market Analysis - mid-2006
1.1.6 Internet economy requires NGNs - now
1.1.7 IP Developments
1.1.8 Convergence, Telecoms and IT
1.2 NGN & IP
1.2.1 Next Generation Networks (NGN)
1.2.2 IP - enhanced services
1.2.3 IP wholesale opportunities
1.2.4 Corporate Market
1.2.5 Virtual Private LAN Service (VPLS)
1.2.6 Tips for successful video over IP
1.3 Market overview
1.3.1 The NGN market in 2007
1.4 Statistics overview
1.4.1 Statistical information
1.5 Major players in the market
1.5.1 Brief historic overview
1.5.2 Telstra leading the charge
1.5.3 Telstra
1.5.4 Optus
1.5.5 Commander
1.5.6 Macquarie Telecom
1.5.7 Soul (SP Telemedia)
1.5.8 Nextgen networks
1.5.9 iiNet
1.5.10 Primus
1.5.11 PowerTel
1.5.12 Internode
1.5.13 TransACT
2.1 Telstra and competitors
2.1.1 National approach to fibre
2.1.2 Telstra’s initial FttN Plan
2.1.3 Consequent developments and analysis
2.1.4 G9 - Optus-led industry initiative
2.1.5 Telstra’s FttH in new housing developments
2.1.6 AARNet
2.2 FttH market
2.2.1 Analysis
2.2.2 Market overview
2.2.3 Costing models
2.2.4 Forecasting FttH
2.2.5 Ftth projects
3.1 Statistical overview
3.1.1 VoIP Boom delayed forecasts
3.1.2 ISPs providing VoIP services
3.1.3 Australian businesses not enthusiastically embracing VoIP - June 2007
3.1.4 VoIP will not be effective without upgraded broadband
3.1.5 The ACCC on VoIP
3.1.6 ISPs push into voice market
3.1.7 Switch to VoIP - survey 2006
3.1.8 Survey reveals businesses are unprepared for VoIP security threats
3.1.9 VoIP good growth but no money
3.1.10 VoIP can slash phone bills by $500
3.1.11 Managed network services
3.1.12 Business distribution of Australian VoIP market
3.2 Market overview
3.2.1 Mexican Standoff necessitates revised VoIP forecast
3.2.2 The future of VoIP lies in videoconferencing
3.2.3 IT and telecoms no happy convergence
3.2.4 Regulatory issues
3.3 Market and industry analysis
3.3.1 Click-to-talk
3.3.2 VoIP quality deteriorating, but who cares? We do!
3.3.3 Is there a strategy behind Telstra’s bucket plan?
3.3.4 VoIP over-hyped
3.3.5 VoIP - a case of evolution, rather than revolution
3.3.6 Major battleground: SME market
3.4 Services and projects
3.4.1 AAPT
3.4.2 AT&T
3.4.3 BigAir - business-grade VoIP
3.4.4 Broadband Phone
3.4.5 Country Energy - VoIP over BPL
3.4.6 Convenos Meeting Center
3.4.7 engin - broadband telephony
3.4.8 Freshtel
3.4.9 gotalk
3.4.10 iiNet (iiNetphone)
3.4.11 ISPhone
3.4.12 iVox carrier-grade VoIP wholesaler
3.4.13 Kmoo
3.4.14 MyNetPhone
3.4.15 Neighbourhood Cable
3.4.17 Optus
3.4.18 Personal Broadband Australia (PBA)
3.4.19 Pipe Networks - VoIP peering
3.4.20 PowerTel
3.4.21 Primus Telecom
3.4.22 Soul (SP Telemedia)
3.4.23 Skype
3.4.24 TalkNet
3.4.25 Telstra initiatives
3.4.26 Unwired and Freshtel - wireless VoIP
4.1 From IPTV to multimedia events
4.2 IPTV: Australia ain’t America
4.3 Are you ready for the video explosion?
4.4 Broadband TV - first financial results
4.5 Regulations
4.5.1 IPTV and Unbundled Local Loop (ULL)
4.5.2 IPTV content regulations?
4.5.3 Video streaming regulation
4.6 Movies downloading
4.6.1 Starting with Video-on-Demand (VoD)
4.6.2 Primary target markets - statistics
4.7 IPTV developments
4.7.1 Introduction
4.7.2 Demand forecasts
4.8 Tips for successful video over IP
4.9 Key players

List of Exhibits

Exhibit 1 - Verizon versus Skype
Exhibit 2 - The role of voice
Exhibit 3 - ITU definition of Next Generation Network
Exhibit 4 - IP-based enhanced services
Exhibit 5 - VPN Comparisons - Key Differentiators
Exhibit 6 - Overview of key players
Exhibit 7 - Telstra’s NGN planned implementation time-line
Exhibit 8 - Key suppliers to the Telstra systems and infrastructure overhaul
Exhibit 9 - Nextgen’s VPLS network
Exhibit 10 - TransACT network FttC coverage - 2007
Exhibit 11 - Facts and figures of the Telstra’s FttN roll-out
Exhibit 12 - Fibre-to-the-Node (FttN)
Exhibit 13 - FttN Group of competitive carriers
Exhibit 14 - Cooperation scenarios
Exhibit 15 - Access Prices G9
Exhibit 16 - Fibre Broadband Proposal
Exhibit 17 - Alcatel’s BPON platform
Exhibit 18 - Benefits of FttH in new development projects
Exhibit 19 - FttH Prerequisites
Exhibit 20 - FttH costings per home connected
Exhibit 21 - Residential Broadband (BB) growth predictions - next ten years
Exhibit 22 - Infrastructure blueprint
Exhibit 23 - GrangeNet consortium members and role
Exhibit 24 - VoIP issues
Exhibit 25 - BuddeComm VoIP quality survey
Exhibit 26 - engin Ltd at a glance
Exhibit 27 - Westpac one of the largest VoIP rollouts
Exhibit 28 - IPTV Applications

List of Tables

Table 1 - Total capital expenditure by operator - 1998 - 2000; 2004 - 2006
Table 2 - Total capital expenditure by operator - 2006 - 2007
Table 3 - Telstra IT Transformation - cash capital expenditure - 12 months to June 2007
Table 4 - Telstra specialised data revenue and annual change - 2006 - 2007
Table 5 - Optus - cash CAPEX by operating division and annual change - 2006 - 2007
Table 6 - Skype users Australia - 2004 - 2008
Table 7 - Paid VoIP users Australia - 2004 - 2010
Table 8 - Number of voice service providers in Australia by type of provider - June 2007
Table 9 - ISPs providing VoIP as part of bundled service offers by size of ISP - Sep 2006
Table 10 - Main business distribution Australian VoIP market - July 2006
Table 11 - engin VoIP customer base - 2005 - 2007
Table 12 - engin - operating revenue - 2005 - 2006
Table 13 - engin - net profit (loss) - 2006
Table 14 - Unwired/Freshtel pricing

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