6. 6www.superloop.com
NBN Economics
Circuit Pricing Competitive-v-NBN
Circuit Type Cost per Mbps/month
International $5-$10
Intercapital (Bri-Syd-Can-Mel) <$1 ($2-$5 Adel, Per)
Inter Exchange Dark Fibre (10,000Mbps) $0.15 - $0.30
NBN CVC $17.50
7. 7www.superloop.com
NBN Economics
“I estimate that in todays world migrating ULL
customers to the NBN World would more than
halve TPG, iiNet, Optus and M2’s residential
retail profit margins.”
9. 9www.superloop.com
NBN Economics
“Estimate that unless there is a significant and
continual reduction in CVC charges then the
NBN will be the most expensive broadband
network in the developed world”
10. 10www.superloop.com
NBN Economics Example #2 - MetroE
Metro Ethernet Pricing
Circuit Speed Wholesale
Carriers
NBN
100Mbps $450 $2,000
1Gbps $800 $18,000
Dark Fibre $1,000 N/A
12. 12www.superloop.com
NBN Economics Example #3 - OTT/Video
Globally, IP video traffic is expected to be 79% of all consumer Internet
traffic (both business and consumer) by 2018, up from 66% in 2013.
***The companies referenced above are for illustrative purposes only and are not currently customers of Superloop.
Internet video to TV grew 35% in 2013 and is forecast to increase 4-fold by 2018.
Consumer Video on Demand (VoD) traffic is expected to double by 2018.
Source: The Zettabyte Era: Trends and Analysis, Cisco VNI, 2013
13. 13www.superloop.com
NBN Economics - Example #3 “OTT”
Format Total Capacity (exc
backhaul)
CVC Charges
SD 2.7Tbps $47,250,000
HD 7Tbps $122,500,000
UHD 17Tbps $297,500,000
Here’s what a million screens represents to the NBN
16. SUPERLOOP LIMITED 16
AUSTRALIA WILL BECOME THE MOST EXPENSIVE
BROADBAND IN THE DEVELOPED WORLD
● CVC Charge/Congestion Tax - Galactically stupid pricing
● 121 PoI Tax
● NBN Monopoly - no natural competitor/no price tension
● NBN Monopoly further enshrined as Government looks to “sell” and
maximise return through protection guarantees (Telstra float anyone?)
● Cost of international capacity will remain cheaper than cost of CVC costs
● Compounded as ULL/SS/xDSL services get turned over - TPG greatest
affected
23. SUPERLOOP LIMITED 23
2.6PB WITH AN AVERAGE UTILISATION OF 75% =
● 2,600,000GB (1Mbps = 10G/day)
● 260,000Mbps
● 260,000Mbps/0.75
● Peak = 350Gbps
● 350Gbps>iiNet’s international traffic last year (pre-Netflix affect)
24. SUPERLOOP LIMITED 24
TELSTRA LEARNING FOR TPG AND VODA (AND NBN CO.)
● 4G network ran at 350Gbps nationally without problem
● 5G with increased spectral efficiency and the right spectrum should produce
500Gbps to 1Tbps+ of access
● FttB locations doubling up a pico cell/wifi hand-off sites could possibly handle
2Tbps+ of access connectivity
25. SUPERLOOP LIMITED 25
WHAT DOES THIS TRANSLATE TO?
● 2Tbps * $17.50 = $35m/month or $420M per annum in annual CVC savings
● 1Tbps = 1,000,000 users download 1Mbps concurrently or 300G per month
● 2Tbps = 2,000,000 users on a 500GB plan with an average 60% utilisation
● 2Tbps = 10,000,000 users on a 100GB plan with an average utilisation of
60%
● 10,000,000 users @ $40/month = $4B in revenue
● Vodafone today has around 5m subs with average $70 ARPU for $3.5B in
revenue. Just saying...
29. SUPERLOOP LIMITED 29
“I estimate that in today’s world migrating ULL
customers to the NBN World would more than
halve TPG, iiNet, Optus and M2’s residential
retail profit margins.”
NBN Economics
38. NBN can be fast and affordable
1) Write off $20-30B as social infrastructure (highways, bridges)
2) Drop CVC and AGVC charges dramatically
3) Offer low $ (<$20) plans (eg. 5/5) to avoid mobile canabilisation
4) Get a more synchronous speed plan such as a 10/10
5) Liberate the network and thus the tax-payer and consumers
39. Simple to fix...
1) Government will be unelectable if they don’t sort this by
the end of 2017
1) The NBN will start to be over-run by wireless including
5G if they don’t sort this by the end of 2018.
1) The NBN was supposed to be “fast and affordable”.
Because...
40. Simple to fix...
1) Stop assisting the distortion of the market
1) Protect the consumers interest
1) Step out of the way of wireless unless you want to see
Australia drop any further (already 50th in speed and
74th in affordability and dropping like a stone)
And the ACCC needs to do it’s job...
43. NBN RESOLVED (OR CLOSE TO)
1) NBN Co. write-off of ~50% occurs upon a change in
government
2) NBN Co. sold to Infrastructure company with protections
3) Protections will maximise price for Gov. and pain for industry
4) NBN Co. will look a bit different with wholesale wireless taking
a greater position in the overall product mix
45. TPG #2 Telecommunications Company
1) Launch “Jio” style wireless internet service
2) Unlimited ~$30/month
3) Massive canabilisation of Telstra, Optus and lesser extent
Voda
4) Share Price > $10 buys Vodafone Australia
5) On way to becoming #1 in Australia
47. Telstra De-merges
1) Splits out wholesale/infrastructure assets to new NBN Co.
owner
2) Focuses on retail and enterprise services
3) Share price less < $3
49. mmWave AND WIRELESS
EVERYWHERE
1) mmWave last mile with MIMO + software controllers re-writes
the book on last mile access
2) Line of site technology will work in non-line of sight applications
3) 1Gbps+ wireless access tech costs less and less think ~$1k
access
node for basic and $3k-$5k for “magic” end point.