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NBN can sell gigabit broadband today, but no one's buying

NBN CEO Bill Morrow is being reminded today that the NBN is one of Australia's favourite political footballs.


In the minds of many, NBN equals speed. Or at least, it's meant to. When's it coming to my street? Why am I not getting full fibre? Why can't I have crazy fast broadband right the hell now?

Well, it turns out the NBN is ready to offer gigabit speeds right now, but retailers aren't selling them.

With last month's launch of Telstra's "fastest in the world" mobile hotspot and growing talk of the move toward 5G and all that comes with it (think driverless cars, connected VR, remote telehealth), Australians are understandably starting to think bigger when it comes to broadband speeds. But while we're talking the talk of bigger speeds and crazy fast connections, we're not putting our money where our mouth is.

Yesterday, NBN, the company building and wholesaling Australia's national broadband network, released its half-yearly results. And amid the talk of revenues and rollout goals, there was a great deal of fuss about comments from NBN CEO Bill Morrow that Australians wouldn't want high-speed internet access, even if they got it for free.

But what really happened?

NBN's results outline exactly what retail service providers (the ISPs selling the NBN to you, dear readers) are buying in terms of broadband speeds.

And when it comes to the speed mix, Australians (or our ISPs at least) are aiming low.

In fixed line connections, more than half of what NBN sells to ISPs is 25/5 or lower (that's 25 Mbps speeds for downloads, 5 Mbps for uploads). In fixed wireless, 83 percent of what NBN sells wholesale is 25/5, with the remaining 17 percent 12 Mbps down, 1 Mbps up.

In explaining the numbers, NBN CEO Bill Morrow also revealed that the company is ready to offer higher speeds, but retailers aren't ready to sell it.

We have roughly a million and a half homes that can have the technology to give a gigabit-per-second service capability today. We have a product that we can offer the retailers should they want to sell it. The reality is that a couple of the retailers have signed up for a trial... looking at what a gigabit per second service might look like. But they have chosen not to offer that to the consumers. And you'd need to talk to them as to why, but I will presume it's because there isn't that big of a demand out there for them to actually develop a product to sell to those end users.

But Australian resellers are not alone in steering away from gigabit plans. Morrow continued:

A gigabit per second is a lot of bandwidth. We did kind of scour the planet and go around and talk to a variety of different carriers that have gigabit per second services in the market... where consumers have taken up gigabit per second services. And we asked the question, 'Has anybody actually used that amount of bandwidth?' And the answer was unanimously no. There are not that many applications that warrant much above the products that are being sold in NBN today... If I have to pay for it to move from 100 [Mbps] up to a gigabit per second, I don't really have the application or the need for it, so why would I pay more to do that? I believe that's the market dynamic that's occurring today.

There are plenty of services and applications that can (and no doubt will) send us skyrocketing up in terms of bandwidth needs in the future. Driverless cars that can communicate with a surrounding fleet, 8K streaming, augmented reality, artificial intelligence -- there's no doubt our future will be connected.

"But we haven't seen that as of yet," said Morrow. "Because those aren't really here, where people feel 'I need to pay extra money to get that kind of service'. And even if we offered it for free, we see the evidence around the world that they wouldn't use it anyway."

Many took this last comment as a sign that NBN is out of touch with Australians or that Morrow is a luddite, or just just to whip up a typical NBN storm. But in the context of everything above, his comments were a perfectly reasonable response to what is happening in today's digital world.

NBN today said it was "disappointed" his comments were taken out of context, and that "while the NBN network does offer 1 Gbps wholesale services to retailers, to date no retailer has elected to sell these services."

Of course Australians should keep lobbying for the fastest speeds and the best possible network that taxpayer dollars can buy. And with 1.5 million premises currently ready for gigabit speeds -- 5 million by the time the NBN is finished rolling out in 2020 -- a gigabit future is very real.

But if you want that kind of speed, it's just time to start pestering your ISP.

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