Australia - Telecoms Services - Wholesale and Competitive Access

Attention: There is an updated edition available for this report.

The NBN, and in particular the structural separation between infrastructure and services, is changing the telecoms industry beyond recognition. A new industry structure will need to be developed based on collaboration and cooperation, rather than the destructive adversarial environment of the past.

While the open market is being established, Telstra remains dominant and with revenue derived from the deal struck with the government over NBN Co's access to its infrastructure the company has deep pockets to invest in new opportunities. It must be questioned whether the design of the NBN will lead to true wholesale competition, or will restrict competition to a handful of players which can afford to build their presence in the 121 points of interconnect? This could well prove to be a critical strategic mistake.

The ACCC has indicated that it will monitor this. The unique construction that offers backhaul competition could indeed be the facilitator in obtaining the competitive outcome needed to ensure that a dynamic system is developed which will lead to innovation.

Industry collaboration will also be needed to limit the necessity for more regulation. In a dynamic environment time is money and there is no longer room for year-long regulatory processes. Trust needs to be built up to facilitate much speedier dispute resolution, preferably preventing these disputes from arising in the first place. Some early indications are that NBN Co is willing to sit down and make changes where it makes sense to create a better wholesale and retail environment for all involved.

Key developments:

PoI (point of interconnect), CVC (Connectivity Virtual Circuit), wholesale, RSPs (retail service providers), pricing, Inabox signs deal with Total Telecom Group to migrate customers' PSTN services.

Companies mentioned in this report include:

Internode, M2, NBN Co, Nextgen, OPEL, Optus, Telstra, Inabox.

1. Synopsis
2. Wholesale reforms
2.1 Introduction of regulatory instruments
2.2 Regulatory instruments analysis
2.3 Final access determinations for fixed line telecommunications
2.4 Layer 2 bitstream on non-NBN Co networks
2.5 Difference between peering and interconnection
2.6 The thriving wholesale aggregation market
2.6.1 Inabox
3. How will competition develop in an NBN environment?
4. NBN retail competition at lower margins
5. Government is forcing the telco industry to fight Telstra dominance
6. The NBN (after the elections) and the competition issues
6.1 There is thriving competition in the telecoms market
6.2 Forty years too late
6.3 Who is going to invest in competing fixed infrastructure?
6.4 So what are the competition models from those promoting it?
6.5 Competition policy should be focused on the services, not the infrastructure
7. National Broadband Network Policies and Regulations (see separate report)
8. Wholesale Product Overview
8.1 NBN for business
8.2 1Gbps wholesale service
8.3 The FttN service
9. The NBN wholesale and PoI debate
9.1 Wholesale dominance
9.2 Backhaul competition
9.3 The business opportunities of the POIs
9.4 Connectivity Virtual Circuit (CVC)
9.5 NBN Co's multicast service
9.6 Access seekers gateways
9.7 The effect of streaming video on the NBN
10. NBN Co's multicast service
10.1 Overview of the service
10.2 Wholesale Pricing
10.3 iiNet
10.4 4K TV
11. Pricing Strategies
11.1 Wholesale Broadband Agreement
11.2 NBN Co special access undertaking (SAU)
11.3 Wholesale prices
12. Key wholesale services (copper based network)
12.1 Unconditioned Local Loop Services (ULLS)
12.2 Line sharing or spectrum sharing
12.3 Local Carriage Service (LCS)
12.4 Unbundled Bitstream (UBS)
12.5 UBS versus ULL
12.6 Naked DSL
13. NBN Utility Management service The Retail Clause
14. Do we need infrastructure-based competition?
15. Other reports
Table 1 The wholesale market in Australia - key players - 2014
Table 2 NBN pricing schedule for access virtual circuits
Table 3 NBN pricing schedule for PoI connections
Exhibit 1 - Ultra-HDTV 4K standard' for satellite TV

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