A friend and regular Stubborn Mule reader drew my attention to an article in the Sydney Morning Herald this week about the Australian telco Telstra. Much of the recent commentary has focused on the implications of the national broadband network (NBN) for Telstra. While the NBN certainly gets a mention here too, for me the most striking paragraph deals with the extraordinary success Telstra has been having of late in the mobile phone market:

In the December half, the group added 420,000 bundled customers — customers on bundled deals tend to be “stickier” and stay with a telco longer than those who sign on for only one service — and it added 139,000 retail fixed broadband customers. Most importantly, it added 919,000 mobile phone customers: that’s the biggest mobile phone customer growth Telstra has produced for more [sic] a decade.

Gaining almost 1 million new customers in six months is quite an achievement in a country with a population of around 22 million. My own experience may shed some anecdotal light on Telstra’s success. I switched from Virgin mobile to Telstra late last year. The main reason was network quality. Virgin use the Optus network which I found extremely unreliable, even in central parts of Sydney. Sitting in a café in Glebe with no signal and seeing the person next to me with four bars on a Telstra phone had become too much. Customer service did not come into the decision: as far as I can tell, all the providers are equally atrocious on that score. So that just left price. When I first signed up with Virgin a couple of years earlier, Telstra may have had the superior network, but charged a hefty premium for it. But since then their prices have become far more competitive, which made the decision to switch very easy. I know a number of other people who have switched for exactly the same reason.

Even so, 1 million new customers is an impressive result for such a short period of time. This prompted my source to do some further research. According to a Wikipedia article about mobile phone penetration, in 2006 Australia’s population of 20.8 million owned 19 million mobile phones*. By 2007, that figure had grown to 21.3 million while the population was up to 21.2 million and so there was more than one phone for every man woman and child in the country. I have no doubt that the number of mobile phones has continued to grow faster than the population since then.

But despite over 100% mobile phone penetration, Australia is far from being the country most in love with mobile phones. The chart below uses the Wikipedia statistics to show the top 20 countries and the statistics are intriguing and not a little mysterious.

Top 20 Countries by Mobile Phone Penetration

Montenegro is clearly in the lead with almost two phones per capita. There is a bit of a drop down to Saudi Arabia with a penetration rate of 170%. On 151%, Hong Kong comes in third and leads a closely packed group all close to the 150% mark. Continuing down the list, penetration rates fall gradually down to Chile at 113% which means that Australia does not even make it into the top 20. In fact, even New Zealand ranks higher in 23rd place, while Australia is only in 31st place.

Of course, differences in timing of both the phone and population figures mean that the Wikipedia article will not be very accurate, but the overall picture remains impressive for someone like myself who is old enough to remember a time before mobile phones. And if anyone has any theories why Montenegro has so many mobile phones, please share your theory in the comments below!

* Unfortunately the Wikipedia article cites no source for the 19 million figure. Population statistics are sourced from the Australian Bureau of Statistics.

migNow that Labor has scraped their way back into power, it looks very likely that the National Broadband Network will go ahead in some form or another. Debates on the merits of the scheme continue apace, not least on Twitter, conveniently labelled with the #nbn hashtag. One frequent twitter on this topic, @pfh007, is also a regular commenter here on the Stubborn Mule. It seems that his thoughts on “Fibre to the Home” (FTTH) can no longer be constrained to a mere 140 characters, so he has now written a guest post for the Stubborn Mule.

A friend asked me a few days ago whether I could state my position on the current NBN proposal in 140 characters or less.

Although 140 characters suits my attention span and typing speed, the FTTH NBN proposal requires a few more.

Please note I have no academic, technical or professional background in this area to give weight to my opinion. So take it for what it is – sideline commentary from my IT shed. But first an initial comment about the FTTH NBN debate.

Unlike many commentators, I do not feel that the debate has been sterile or shallow. Certainly, there has been some partisan barracking where views expressed seem to be simply based on what position a person’s political team is taking on the issue, and some commentators have let their passions get the better of their reason, but overall I have found a broad range of thoughtful and considered thinking on the issue in both the traditional and electronic media. I am confident that a full and frank debate about the FTTH NBN proposal will eventually result in a policy that will be in the interests of all Australians.

Some important throat clearing comments first up:

• I believe that Australia needs better broadband access.
• I agree that optical fibre is technically the superior technical solution to supplying fast high capacity broadband.

Some other important considerations:

The attempt in Australia to regulate a private monopoly of the fixed connection network was a dismal failure. It seems clear to me that the government must resume an important controlling role in the delivery of a fixed connection network to ensure that at least some regard is given to the public interest. Accordingly, it is important that the government buy back the farm (a.k.a the wholesale fixed connection network currently owned by Telstra).

Having bought back the farm, the government should immediately sell down its interest to 51%. The remaining 49% can be sold to private investors, ideally the retail suppliers who have, or should have, an interest in the provision of a high quality fixed connection network and thus actively contribute to ensuring that the fixed connection wholesale supplier is well run. One approach might be simply to leave a 49% interest with Telstra and let them sell down their share as they see fit.

The advantage of this approach is that the new wholesale fixed connection entity would immediately have a source of cashflow and the capacity to generate a commercial rate of return. Some of that cashflow could then be allocated to the improvement of the fixed connection network – more on that below. Additional investment could be raised by debt or capital investment by the shareholders. In short this entity would be making money from wholesaling access to the existing copper network.

The 51% government stake in the new wholesale organisation must remain in public hands as regulating private monopolies does not seem to be a strong point of our public administration.

While I am not entirely convinced that, given the choice, consumers over the next decade will continue to believe that a fixed connection for telephone/ internet is necessary, for reasons set out below I have assumed that every house will want and continue to require a fixed connection.

On the assumption that a fixed connection to every house remains desirable, it seems sensible that any new connections to new houses should be via an optical fibre. While I have no statistics to back me up, the cost of laying a new fibre connection as opposed to a new copper connection to a new house should be roughly similar. To the extent that optical fibre may be more expensive, the advantages of that technology would greatly exceed the difference in cost.

Households who currently have little or no access to a decent ADSL or HFC cable connection (the stuff used by Optus and Foxtel Pay TV) should be prioritised for improved connections. These connections could be initially fibre to the node (FTTN), to allow fast ADSL access, and eventually FTTH or if it is more cost effective to skip the interim FTTN step, FTTH immediately .

Fibre connections to public buildings or commercial premises should be given high priority as these users are much more likely to benefit from and be in a position to make practical use of the faster broad band connection that FTTH allows. Most of the applications for FTTH that I have read about seem most relevant to public or commercial buildings.

Households who currently have good quality ADSL or HFC connections would be given a much lower priority and may not be converted to FTTH for a long time or at least until demand clearly requires or the proposal outlined below is implemented. Assessing demand will be quite easy as, by that time, large numbers of new houses will have acccess to FTTH and word will have spread if it proves to be a compelling proposition for residential users. We will not need to speculate whether consumers will choose to improve their existing ADSL or HFC fixed connections to optical fibre.

Where sections of the existing copper network fail or prove to be more expensive to maintain than to replace they should be replaced with fibre.

Competition by private wireless networks should continue and be encouraged.

Will there be a continuing need for fixed connections to households?

Perhaps the greatest weakness of the current FTTH NBN proposal is the assumption by its proponents that a majority of households will wish to maintain a fixed connection (for telephone or internet) of any description to their home.

Increasingly many people, particularly young people, do not bother having a fixed phone connection at all. They have a mobile number and that is that.

This trend seems highly unlikely to reverse.

What does this mean for internet access via a fixed connection, arguably the only remaining persuasive reason for a fixed connection to many houses?

This year can be regarded as the year of the smart phone/smart appliance.

Although Apple iPhone had the field much to itself over the last few years, the rise of android, improvements to Nokia’s symbion and the impending arrival of Win 7 mobile seem likely to herald the storming of the mass market by smart phones.

Needless to say the market for iPads, tablets and e-readers will only further expand the demand for mobile internet access.

Although the limitations of wireless broadband are obvious to the old hands of fixed broadband (myself included) it is dangerous to assume that young people whose primary experience of the internet is framed by their smart phone gadget will see things the same way.

It may be that for most of their needs their smart phone will be perfectly fine and they will see no more need for a fixed broadband connection than they do for a fixed telephone connection.

Simply put – they may settlle for second best wireless connection because second best suits what they want from the internet.

They may wish for improved wireless broadband but it is not safe to assume that they will have a need for a fixed broadband connection simply because it is technically superior.

Mobility may trump speed and capacity.

At the present time, in the midst of explosive growth in consumer demand for mobile connections, the proponents of a FTTH NBN network are simply failing to articulate a persuasive case as to why the community should spend a large amount of money replacing the existing copper and HFC cable connections to the millions of households who currently have access to adequate broadband connections using those technologies.

To the extent that it is possible to gauge consumer interest in the FTTH NBN, it is clear that there will be insufficient consumer demand for its high speed fixed connections unless the consumer is denied the current fixed connection alternatives available to many of them – copper and HFC cable.

The most compelling argument in favour of a FTTH NBN

I have read much about the exciting ways the capacity and speed of FTTH broadband can be applied, but few of them are convincing as mainstream applications for residential users.

I appreciate that this may simply reflect the limits of my imagination and the imaginations of the current crop of futurists vibing the brave new world of FTTH, so I will keep an open mind that someone will come up with something in due course.

I believe there is only one application that makes a compelling case for a FTTH fixed connection network. Broadcast TV and video on demand including Pay TV and IP TV.

If radio tramission of all television was to cease when an area is fully supplied with FTTH and all free to air TV was supplied via the FTTH then many, if not all, households would demand a connection and a device that would allow them to feed the TV signal into their TV set.

Not only would this create a genuine need for FTTH but it would allow the considerable amount of valuable radio spectrum currently used by the analogue and digitial television broadcasts to be reused for other purposes including possibly 3G and 4G wireless.

There seems little justification for continuing to use valuable radio spectrum for the purpose of delivering SD and HD video programming which could be delivered simply and effectively by an optical fibre.

It is better that as much radio spectrum as possible is available for the provision of mobile internet access particularly as it is likely that mobile internet access will be favoured by many if not most consumers.

The auction of that spectrum to telcos and other wireless internet providers would go someway to defray the cost of the FTTH roll out, particularly those sections of the FTTH network where a universal service obligation may be the only reason for construction.

The availability and universal coverage of the FTTH would also allow multiple existing and new pay TV providers to use the cable as their main method of service delivery – especially to areas not currently supplied by existing technologies.

Summary

In short the proposal is as follows:

• Have the government buy back a 51% interest in the wholesale fixed network – buy back the copper (this new wholesale fixed connection supplier would generate an immediate return from the existing copper fixed telephone and ADSL connections)
• Fixed connections to new housing to be optical fibre
• Existing houses with no access to HFC networks or ADSL to be provided with FTTN (or possibly FTTH)
• Prioritise optical fibre connections to public buildings and commercial premises
• No change to FTTH for existing houses with HFC or decent ADSL until it is clear that there is consumer demand to do so
• All existing free to air TV to be supplied via the optical fibre to build community acceptance for non-broadcast supply of TV
• As engineering and technical resources (including labour) allow progressively convert TV broadcast regions to FTTH and when connections are complete and operating turn off the broadcast TV signal
• Auction the broadcast TV digital and analogue spectrum for alternate uses – say 3G and 4G wireless

The irony inherent in the proposal set out above is that while the FTTH connection could be used for ‘internet access’ as we currently understand it, the primary objective of the FTTH would be to facilitate the provision of increasing amounts of wireless internet access to mobile devices by removing TV (analogue and digital) from the radio spectrum.

Furthermore, it also suggests that the proponents of a FTTH NBN might be better served by promoting the capacity of the FTTH to deliver TV, pay TV and other forms of video entertainment that the consumers value highly as this would allow improved wireless connections to deliver the lion’s share of the internet access that most consumers are likely to want in the future.

For remote houses that cannot be connected with FTTH – satellite delivery of free to air TV and Pay TV should be available.

Last year I bought a Kindle e-book reader and wrote about its strengths and weaknesses. With the release of Apple’s iPad last month, people keep asking me whether I wish I had waited for that instead. The short answer is, no, but now a fellow gadget-aficionado, Tony (aka @thewordpressguy) has drawn my attention to another new device, the TEGA tablet, and has asked me for an opinion*. I am yet to get my hands on either device, but I won’t let that stop me expressing a view!

The history of tablet computers is showing every sign of repeating the pattern of mp3 players. The first mp3 player pre-dated the iPod by about 5 years, but it was not until Apple entered the market that they really began to take off. Two key factors behind Apple’s success were design and the iTunes store. Having owned a Creative Nomad Jukebox and an iRiver H340 before getting an iPod, I experienced first-hand how much better the user-interface of the iPod was than everything that came before (even if it lagged at times in its technical specifications). The iTunes store was even more important. While early-adopting enthusiasts like me may have had the motivation and patience to convert all of my CDs to mp3 format, this would not be true of most people. The iTunes store provided a simple and reasonably-priced way for people to get content onto their iPods. The rest is history.

Just like iPods, tablets have been around for some time before Apple entered the fray. The term was popularised by Microsoft in 2001, but tablets were around in one form or another well before that (you could even include Apple’s less than successful Newton). Just like the iPod, the iPad is no doubt a superbly-designed piece of hardware, with an intelligent user-interface (I am extrapolating from my experience with the iPhone as well as taking into account the plethora of articles I have read about the iPad). Combine that with the App store, which is to the iPad and iPhone what the iTunes store was to the iPod, and the success of the iPad looks assured.

While the iPod came to dominate the mp3 player market, the iPad may stimulate the emergence of a broader range of alternative tablets, much as the Google Android phone is showing signs of being a serious alternative to the iPhone. Based on Tony’s assessment of the TEGA, it could well be an early example of this phenomenon. While it does not offer Apple design, it does have a few other things instead, such as USB, card-reader ports (rather than having to rely on external adapters as the iPad does) and a built in 3G modem which allows you to pop in your own sim card (so no more 3G dongles). What may hold even greater appeal for some is that it is operating-system agnostic: while most people would buy it with Windows 7 installed, it will also ship with Linux.

The release of the TEGA is an interesting development and I am sure there will be more iPad alternatives to come, but that brings me back to the original question. Do I have Kindle-regret? Would an iPad, a TEGA or something else be better?

I do not. The Kindle certainly has its shortcomings, some of which I discussed in my original review, but here’s what it gives me that the alternatives do not:

• electronic-ink display – while the page-turning flicker may be annoying to some, I continue to find it a very easy medium to read, particularly in bright light
• battery life – with 3G turned off (except for when I am making a purchase), I get two weeks or more between charges. The iPad offers an impressive 10 hours, so the gap is closing, but the Kindle retains the lead for now. Clocking in at only 2.5 hours, the TEGA remains a laggard on this score and it cannot be a serious contender until this improves.
• price –  compared to prices of portable computers only a few years ago, with prices starting at US$499 the iPad looks cheap. But at US$259, the Kindle is a lot cheaper. Of course, it cannot do what the iPad can do, but if you are after an e-book reader (as I was) that may not matter. The TEGA is closer to US$1,000 (A$1,187.98) and at that price looks expensive.
• continuous partial attention – on a computer I cannot help flicking from email to twitter to following links, so perhaps I suffer from a touch of CPA. What this means is that a single-purpose device like the Kindle is ideal for me and offers a better, less-interrupted reading experience. It may seem absurd to some to want to impose restrictions on a device, but in this case it is an advantage for me.

As a bit of a gadget-obsessive, I may well succumb to the lure of an iPad one day (perhaps 2.0), or indeed a descendant of the TEGA or something similar. For now though, I will happily continue reading on the Kindle.

* In the interest of full disclosure, I should point out that if enough fellow-bloggers post on the topic of the TEGA, Tony will have the option of purchasing a heavily-discounted unit.