My name is Graham Bate
and I lead the NBN and Wireline product portfolios
here in Telstra Wholesale.
The topic for this session is NBN, MTM and you.
Look, what I'd like to do is just to share some of my perspectives
on MTM and what that means in terms of the NBN rollout.
Also then to outline some of the activities
that are going on within TW
and how we are specifically addressing
some of the key considerations that we, as an industry, have
as MTM rolls out across the industry.
I'll also be sharing with you, I hope,
some of the things that we're planning within TW
in this environment
and how we expect to be supporting customers
who are directly connecting to NBN and require POI backhaul
and perhaps also some value-added services from us.
Also those customers
who expect to be reselling wholesale access services,
whether for consumer or for business purposes,
and perhaps customers who expect to be doing a little bit of both.
Right?
In fact, for all of our customers, as we transition to NBN.
For my part, I feel like we're at an exciting time
and we're at a really key juncture as an industry.
NBN, for all of us, is a bit of an adventure.
And, uh, I have a little boy
and if I ask him what makes up a good adventure story,
he'll tell me it takes an interesting cast of characters,
of course,
but also plenty of plot twists and turns,
a test of character somewhere along the way
and, ultimately, a happy ending,
although not always the one that you might have expected at the outset.
And, uh...
..while this slide
doesn't really look like
the cover of a Tolkien novel
or perhaps a trailer
for a Bruce Willis movie,
it does nevertheless illustrate
the adventure story
that we're facing as an industry.
For our industry,
NBN is a real test of our ability
to automate and to innovate.
The NBN rollout is reaching scale,
both in terms of
the premises connected
and in terms of the rate of roll-out in the coming year or two.
To date, just over half a million premises
have now been connected to the NBN,
thanks to the effort of many of the people in this room,
and around 1.3 million premises have now been passed.
With the introduction of FTTN, FTTB and HFC,
that rate of rollout is now expected to accelerate significantly.
There's even a recent plot twist in the latest NBN corporate plan
which sees HFC now increasing from 27% to 34% of the expected rollout
and the original FTTP technology now reduced by fully one fifth
from 25% to 20% of the final roll-out.
However, for us,
the key is that by the middle of next year
over 2 million premises will be ready for service,
growing to around 5 million
by June '17.
So just to put that
in a little bit of perspective,
in a little over 18 months' time,
around 45% of the existing network
will be ready for service
and entering cease sale.
So, with a little over a million premises passed,
about half a million premises connected
in four years since NBN began,
the network will then cover 45 times as many premises
in a little over 18 months' time.
Of course, these volumes present a real resourcing challenge
for us as an industry
and NBN can no longer be considered a special project.
It needs to be done, as we are, within wholesale,
treating it very much as part of our core BAU activity.
But aside from
the simple scale of things,
the environment presents
some really significant challenges
for us as an industry.
And our task
is to meet these challenges
while making things
as straightforward and simple
as possible for our consumers.
So the first of these is what I call
a multi-carrier, multi-technology environment,
and this is something which has been a feature
of the copper network for many years.
Some of those hundred years
that Kate McKenzie was talking about this morning.
However, with NBN, customers who acquire services today
from perhaps a variety of providers -
whether stand-alone, naked or as a bundle -
will now typically be making the decision
to select a single service provider on the NBN.
And this process is something which is complicated further
by multiple access technologies.
There are a range of operational scenarios that arise
and under MTM, these differ slightly between NBN technology types.
So as an industry, our IT capability and underlying processes
need to be carefully engineered
to accommodate a wide variety of use cases.
And looking ahead,
support for effective operational churn, port and transfer capability
will also be a key requirement,
particularly as the first tranches of services
that have been connected to NBN
come out of contract
and perhaps some of those customers look to change service providers.
So here in TW,
one of the things we're doing is to work very closely with industry,
with you, our customers, and the Comms Alliance
in the development of industry codes that ensure a common framework
for this multi-carrier, multi-technology capability.
And, of course, we're also working with our customers
as they consider the implications that this has
for their systems and processes and their go-to-market strategy.
A second consideration is service activation and assurance.
As volumes of services grow,
cost -effectively delivering on customer experience expectations
through the activation process
will increasingly become a focus for us all.
And while it's early days on FTTP and fixed wireless
and volumes are relatively small,
early indications are that providing a good customer experience
at a reasonable cost
is not easy.
With the introduction of multi-technology mix,
providing a consistent activation and assurance experience on NBN
becomes more complex.
It depends on the status of RFS regions, underlying technology,
the customer premises environment
and ultimately, the customer experience that you wish to create.
And these all become considerations through the migration,
as well as for new services connecting onto the NBN.
And when the September edition of the Choice magazine
can devote two entire articles to the experience
that a retail consumer will have connecting to the NBN
and how to address those,
you know that it's really becoming mainstream.
So here at TW,
as many of you will be aware,
we are enhancing our legacy products
to ease that transition,
and a good example of that
is our broadband aggregation
capability for DSL.
We're also working very hard
to keep our customers informed.
Just last week, we published the latest version
of our Manage Disconnection handbook.
I think we're up to version 6 now.
And we'll soon be communicating more information
on multi-dwelling unit common areas.
The team will soon be sharing further insight
into the operational arrangements for activation and assurance
and the transfer of copper lines to the NBN and FTTN areas.
And of course, we also continue to maintain our focus on automation,
B2B functionality and system availability,
building on our experience
of automating millions of transactions a year
in the copper environment.
And we still have work to do in many of these areas.
And those of you who attended the IT workshops earlier today
will have seen some of our activities in those spaces as well.
Of course, a third area that is of particular concern
to many of us in the room
is that of capacity and bandwidth growth,
and we've heard some commentary on this already today.
While the growth in broadband take-up
has slowed significantly across the industry,
we're all grappling with the rising demand for media-rich content
as well software downloads and cloud services,
much of it originating from over-the-top providers.
The success of brands like Netflix, Presto, Stan and others
is making delivering a quality broadband service
that much more important to our customers.
While the number of broadband customers has remained flat
over the last three years,
the penetration of tablets has increased nearly threefold,
the take-up of internet-capable TVs has doubled,
and amongst the 18-to-24 demographic,
consumption of broadcast TV has dropped
to around 60% of their video consumption in total.
So that is to say that the average 18- to 24-year-old
is now spending 31 hours a month watching online video,
or pre-recorded content - TV content -
and this is in addition to the time spent on social media.
So it's perhaps no surprise that in recent times
we've seen the download volumes grow by around 60% per annum.
We even see it reflected in the NBN Co's own financial results,
with around 25% of revenues coming from CVC and NNI charges alone.
And this is still the case
even following a recent price reduction back in February.
And while...
I also know that NBN Co are expecting further consultation
on this topic in November.
So there are certainly challenges in delivering this broadband content,
but not just in terms of the commercials of it
but also we are perhaps used to
delivering business-critical services,
but we're now delivering consumer broadband services
that are not business-critical but perhaps Game-of-Thrones-critical,
and that is perhaps a higher standard
to which we need to hold ourselves.
But, of course, there's also a positive side to this too.
There are very few industries
where there is such persistent increasing demand
for the products that we offer
and where the purposes to which they are being put
touch so many aspects of our customers' lives.
However, this clearly presents challenges for us
in terms of bundling and pricing constructs
and cost-effectively delivering
the necessary scalability and performance.
So here in TW, we've been pleased to reflect
the movement in NBN Co CVC pricing to-date
in our Broadband and Broadband Plus products.
But perhaps more importantly, we're investing in backhaul capability.
For those who wish to connect directly to NBN,
we're investing in capacity and capability
to provide flexible connectivity to NBN POI sites
and for our resale products,
it takes the form of investing in capacity in our Layer 3 network -
a network that has now been connected to all 121 POIs
in just the last few weeks.
The fourth area of interest and concern
for all of us in the industry
is how we deal with business services,
and perhaps the way is now beginning to become a little clearer
as to how these will then migrate to NBN.
To-date, after all, most copper-based business services
have been classified as temporary special services
and so have been exempt from disconnection.
But this may be beginning to change
with the release recently by NBN of the first in a series of papers
that sets out their support for these business-grade services
on NBN -
the first dealing with wholesale BDSL.
At this stage, NBN has only set this out for FTTP, B and N solutions
and notably not for HFC.
However, once an equivalent product has been put forward by NBN Co,
this would set the ball rolling for disconnection of BDSL services also.
So if this happened now, disconnection of BDSL services
would then start, at the latest, 36 months from now, or in late 2018.
And to give it a sense of dimension,
this would involve all of the BDSL services
in the roughly 45% of the network we expect to be ready for service
by mid-2017.
So clearly, this will be an ongoing focus for all of us,
especially as the latest product roadmap from NBN Co indicates
that they are planning on publishing similar papers
over the coming 12 months for the other special services.
And here in TW, we're working very hard to expand our roadmap
to support NBN access for business services.
We're also taking the opportunity
to ensure that these products that we develop
are well-suited to current market requirements -
in other words, fewer products,
but endowed with more modern capabilities.
So I'd now like to just provide a bit more background
on how these activities are going to be reflected
in a forward-looking roadmap.
Um, my legal team require me to say
that some of these development plans
are indicative and subject to change
and what's presented today
is a reflection of our current thinking,
but you get the idea.
At TW, clearly, we are committed
to integrating new NBN capability
as it becomes available
and we are aiming to launch
our FTTB and FTTN products
later this month.
This has been an exciting development
for me, personally,
but it's also a very easy product to launch
and that's simply because
most things stay the same.
Compared to our FTTP product,
a few things necessarily change
such as battery backup,
support for analogue voice
and the definition of speed ranges.
However, most other aspects
of the product remain the same,
with the same simple plug-and-play CPE set-up,
the same choice of installation options,
consistent business processes,
the same authentication and addressing
and the same sort of bundle options
and pricing elements
as we have for FTTP.
I'd also particularly like to thank
those of you in the audience
who've been kind enough to help us
in the initial trials
and testing of these products.
Your input and feedback certainly
makes these products better.
Next, we expect to be having
a HFC product available
around the middle of next year.
We have just baselined
our own solution design,
which, for us, is a key milestone
in commencing the detailed design and build.
As with FTTN and B, there will be some operational differences
due to the underlying technology,
but we are committed to the same principles of remaining...
..of maintaining, where possible,
a consistent experience for our customers.
We're also continuing to evaluate
the long-term satellite product from NBN Co
and, clearly, this is a product
that we see as having only a specialised market application,
at least in terms of volumes of services,
as it will cover only 3% of the network.
A key consideration for us
is also that we believe the current NBN Co product definition
restricts long-term satellite to a fairly basic broadband-only market,
including predetermined usage caps at a per-SIO level,
prioritisation of certain applications
and pricing models that see the price per gigabyte increasing
on high-usage plans.
However, we'd welcome your views
on whether this product is relevant and useful in your market.
We're also rounding out our NBN offerings
to support business services.
Our first focus area is in business voice
where we're developing a multi-line business voice capability
to present as a SIP trunk.
This product will be available via a number of access types,
including NBN,
and key to this capability will be the flexibility
to acquire this product either as a stand-alone service
or as a clip-on or bundle with a data service.
We aim to be testing this capability with customers
later this financial year.
And we're also exploring ethernet access integration into NBN
for support of business services,
and the technical considerations around product capability for this
are similar to some of those I've outlined for our consumer products,
and we're working through these considerations now.
But we expect to have this product in market in around 18 months.
And finally, in the backhaul space,
traffic is expected to grow substantially
in the next year or so,
driven by the volume of connected users
and the increased average peak user speed.
We're developing several capabilities
to give flexible transport and connectivity to NBN POI sites.
We've recently launched a 100GB wavelength product
and along with this, we've launched an option
to provide proactive monitoring to give you greater peace of mind.
We're also seeing demand for aggregation services
both nationally and at a state level,
so we're looking at extending
our ethernet backhaul VPLS capability into NBN POIs as well.
So at TW,
you can see how our roadmap is embracing the multi-technology mix,
aiming to deliver consistent products
that support the anticipated growth
and connections in bandwidth over the next few years.
NBN is a real-life adventure story for us.
It really tests our capability to automate and innovate
in an environment where we need to constantly integrate new capability
as it becomes available on the NBN.
This is an environment where our products are becoming
a larger and larger part of people's personal and business lives.
However, at Telstra Wholesale, we know that for us to be successful,
we depend on your success,
and this depends not just on what we do, but on how we do it.
So our focus remains on delivering consistent product
with the flexibility you need,
supporting the current and future needs of your customers.
We also continue to invest in the underpinning operational capability
to support your business,
so you can target your intended market with confidence.
Just as your customers expect you to be more responsive
and deliver higher quality and be faster to market than ever before,
we know that you expect the same things of us.
So this is an adventure story where if collectively we get it right,
I'm hopeful that we can write our own happy ending.
(APPLAUSE)