NBN implementation study won't be anything new: Analysts

The implementation study undertaken by McKinsey and KPMG won't reveal anything the NBN Co or general public don't already know, according to analysts.

It will, however, be an important step in the roll out of the National Broadband Network (NBN).

"Depending on what the study finds, and the type of information that it provides, I would dare say that with the type of analytical focus that the NBN has received over the last year, there wouldn't be anything in that report that we pretty much don't know already," IDC analyst David Cannon told Computerworld Australia.

Though the exact findings of the implementation study are not yet known, Cannon said it will provide "slightly more detail" on key NBN points, including Telstra's potential role in the network and the cost of rolling out fibre to the home.

Communications minister, Senator Stephen Conroy, revealed that the implementation study, worth $25 million, will be released before the Federal Budget on May 11.

The study, which is purported to provide advice on the NBN’s operating and governance arrangements, has attracted criticism over its relevance and timing.

While the study is yet to be released to the public, the NBN Co has already announced mainland trial sites and a third stage of funding for the Tasmanian arm of the network.

Market Clarity analyst Richard Chirgwin said the study could feasibly provide new information depending on its content. Chirgwin said that the trial sites will "refer what is gathered in experience from what was analysed in the implementation study. From that point of view, having sites implemented by NBN Co does not therefore invalidate the implementation study".

One of the questions surrounding the implementation study is its relevance to the NBN Co's business model, and the company's dealings with Telstra.

"Regardless of what the report says, the NBN Co business model is reliant on getting Telstra's subscribers onto that network," Cannon said. "The initial view from the Government that they were happy to run an NBN network and a PSTN network in tandem definitely would mean that the NBN Co would have a high level of difficulty justifying the business case going forward."

Cannon said it may confirm current estimates it would cost between $1500-2000 per house for a fibre connection. "I'd assume that they'll also talk about the cost benefits of being able to roll it out with Telstra."

However, the study still needs to prove whether users require the bandwidth capacity promised by the network, he added.

"The general public's need for broadband speeds beyond ADSL2+ really isn't there unless you have application that demand that type of capacity," Cannon said. "IPTV was probably the low hanging fruit application to require that type of capacity.

"But the whole thing rests on timeframe, so in the five to ten year timeframe that NBN Co is talking about, you could sit there and say that those types of capacity requirements will be required. At the same, it wouldn't be beyond existing DSLAM providers to be able to offer a next generation of DSLAM capability driving that extra punch. Certainly by bonding multiple copper lines together you can certainly exceed what ADSL2+ is doing today.

The release of the study will be “extremely important” because it will allow people outside the Government and outside the Department of Broadband, Communications and the Digital Economy to assess the worth of the study, Chirgwin said.

"If the study provides enough information for us to do so, then it will also allow us to analyse the business cases underlying the NBN, and it will allow NBN Co, if it’s a good study, to test those assumptions against both the study and against what it finds out from its [trial sites]."


Copyright © 2010 IDG Communications, Inc.

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