Interview: New Optus CEO Allen Lew talks fixed/mobile integration

Optus CEO Allen Lew has revealed plans to transform his fixed business, mixing it with mobile as a key differentiator; unleash secret new products for his unique 2300MHz spectrum asset; and forge a new corporate identity around telco innovation.  Along with serious mobile network investment and a sustained customer focus, these are key elements of Lew’s grand campaign to take on Telstra and beat back challengers like iiNet and Vodafone.

optusSpeaking frankly to CommsDay in one of his first sit-down interviews since taking the reins in October, Lew – appearing confident, determined, and intimately familiar with every aspect of his company – conceded that the Number 2 telco had been “a bit inward-focused” just prior to his appointment. “For the right reasons; we wanted to make sure that our cost structure, our customer experience would be able to carry us into the next generation of the mobile internet,” he added. “[But now] the most important thing… is that Optus is back in the market.”

Lew is no stranger to the Australian telco scene. He served as MD of both Optus Mobile and Optus Consumer Business until 2006, when he headed to Singapore to become CEO of Singtel’s local operations and then of the group’s new Digital L!fe business. But his departure and return have given him a new perspective on Optus’ future.

“Two anomalies in Australia [make it] very different from [other] developed markets… number one, the home broadband speeds… are actually quite low,” he said. “The second big difference is that pay-TV penetration is very low… if you put those two things together, what I see as a real opportunity for Optus is to move from being just a pure mobile player to become a mobile and integrated multimedia player.”

Lew is banking on customers’ hunger for bundles – from fixed broadband for heavy downloads and mobile for those on the go, to TV and other content. “Consumers and even SMBs want one person that provides them everything. Different types of content, different types of high-speed access to that content…whether they’re home, on their holidays, out and about, overseas, whatever. We believe we can fulfil that role,” he said. “And if we do that well, we cut the competition down to just us vs. you-know-who! The iiNets, the Vodafones, the TPGs,  they all become out of it; it becomes a straight fight between the two of us [who] will have that credibility to do that.”

But as Lew himself acknowledges, that means building up Optus’ fixed-line credibility. “When I came back, a lot of people told me that ‘Optus is a mobile company; your fixed-line, your home strategy tends to be flip-flopping’… [but] fixed cannot be a secondary product,” he said. “Optus has to do well in mobile and fixed.  Today, our revenue and our focus is very mobile-centric; we have about A$6 billion in revenue from mobile, A$1 billion from fixed. That has to balance out a lot more.”

“We will absolutely use NBN to get into the home, where it matters. We will also use our other networks: HFC, ULL, and where it makes sense our DSL as well,” he continued. “We have to change our operations and our business model. [In fixed], it used to be the case that you’d have to do a lot of capital investment and lay a lot of infrastructure. Now, with NBN and the change in the DSL model and ULL, it becomes for us… a wholesale model, essentially. We need to streamline our model and get cost efficiencies, so that we can operate within that.”

“And to that extent, a company like Optus benefits from being part of the Singtel group, for two reasons. One, Singtel and Singapore have gone through an NBN, we’ve operated within that model… also, we benefit from the scale of Singtel. The ability to negotiate as a group with a large footprint with vendors, that gives us a competitive advantage.”

MOBILE SPEND AND 2300MHZ: Lew is also intent on challenging Telstra’s mobile dominance – and that’s likely to be a more costly competition, even once Optus hits the 90% LTE coverage it’s aiming for by April.

“Unlike the fixed space, where we’re operating on the wholesale model…because we’re very much a [mobile] infrastructure provider, unfortunately we [have to] spend the capital at the end of the day,” he said. “The harsh reality on infrastructure and building networks is that you have to spend the money. You can come up with technological innovations, you can come up with partnerships, but those will [only] help you at the fringes; you’ve got no choice but to put up those towers.”

“When we announce our full-year results… we’ll also guide the market and give the public a better indication of what we’re going to be spending in the mobile network,” Lew added. “And the things that we’ve been doing, in terms of streamlining our operations over the last 2-3 years, will now give us the headroom that we need to convince our shareholders that we can use their funds and give them the right return.  And also, the way that we’ve restructured our plans and the public has shown that they’re willing to pay for data also helps to monetise the investment.”

Beyond the hard yards of raw capital spend, though, Lew has an ace up his sleeve: the 98MHz of 2300MHz spectrum that Optus, uniquely, holds in the market through its earlier acquisition of Vividwireless. While the telco is already using it to boost network coverage and speed via carrier aggregation, the CEO is now hinting at other uses, perhaps even in the fixed realm.

“The [98MHz] is our differentiator and to be very, very frank, we haven’t used it in a way that has led to customers looking at it and saying ‘wow, that’s very exciting’,” he admitted. “In a sense, [spectrum] is intangible to customers – unless, and until, you take that and put it somewhere that appears in a very friendly, simple way on their smartphones. Or in their homes.”

“So we’re now rejigging our development efforts… to bring back the zest to the Optus brand by delivering some of these things,” continued Lew. “This is not just about carrier aggregation and mobile – there are other opportunities we can use the spectrum for that we are exploring, and we’re developing products that will come out with something really exciting for Australians in the second half of the year.”

We will use [it], particularly in the capital cities, to come up with something exciting for our customers that can service their fixed broadband needs in the home.”
INNOVATION AGENDA: Atop the foundations of a focus on customer experience – something he says the firm has already been working well towards – and the fixed and mobile strengths he’s targeting, Lew is also out to build a new identity into Optus: that of a true telco innovator.

“While our big competitors are all about network and the smaller guys are all about price, we believe that the whole innovation space has not been occupied by a traditional telco. We believe we can deliver on that,” he said. “In the mobile space, in the home space, there really has not been a huge amount of innovation. We’ve been depending on the handset vendors to come up with smartphones and better form factors; we’ve been depending on our infrastructure providers to give us carrier aggregation so we can go faster and faster. But what have the operating companies really done in the innovation space? We believe, with things like Optus Cash, the My Optus app and IVR-to-chat, that we are leading in that space.”

“Using innovation to engage our customers, entertain our customers, and enhance their lives is where we want to sit,” added Lew. “Now, that’s not the message going out by my marketing people! But you ask me internally where we want to position ourselves – it’s there.”

Lew’s plan is to bring out not just new products, but new ways of dealing with customers. Optus is already running a lot of its interactions through the web or through apps, and Lew for example envisions a future where the My Optus app becomes an interaction point on the level of Facebook or Whatsapp. “This is something where, again, we benefit as Optus from being part of a bigger group,” he added. “I can leverage off what Group Digital L!fe is now doing in different parts of the world, as well as leverage off their presence in places like Israel, Silicon Valley.”

“For us, now, it’s all about reinvigorating Optus the brand externally; reinvigorating what we mean to our customers; and occupying that [innovation in telco] position that no-one has occupied yet in Australia.”

Petroc Wilton


Cisco pioneer: HFC can keep pace with fibre

DOCSIS 3.0 and 3.1 will enable HFC networks to offer “equal performance” to fibre for the “forseeable future,” according to Cisco Fellow and cable access business unit CTO John Chapman – a key pioneer in the broader development of the DOCSIS standards. And that gives operators more freedom to mix access technologies in the most economic way possible, just as Australia’s NBN Co is attempting to do.

cisco

“What we do in DOCSIS is take channels [on HFC cable] that were previously TV channels, and we use them for data. We take those 6MHz or 8MHz blocks and we use them for quadrature amplitude modulation carriers, which are the same carriers that digital video uses – but instead of video bits, we put data bits down the channel,” Chapman told CommsDay. “What we figured out in DOCSIS 3.0 was that instead of just using one channel for DOCSIS, we could use multiple channels. And this is actually a technique I invented 10 years ago for DOCSIS 3.0, the bonding of multiple channels.”

“You can scale as many channels you want; technically you can go to the whole spectrum [available on the cable],” he continued, though noting the necessity to share HFC with any existing TV channels. “A state of the art cable modem today has somewhere between 16-32 channels… a 32-channel cable modem, at 8MHz [channels], will be around 1.5 – 1.6Gbps of downstream throughput…. or around 1.2Gbps for 6MHz channels.”

That’s already way ahead of the 376Mbps downstream that NBN Co CEO Bill Morrow has cited in his firm’s internal DOCSIS trials – albeit not yet using all available channels – and, indeed, of the firm’s fastest consumer FTTP offerings. But with DOCSIS 3.1 on the horizon, which Morrow has also spoken about, the speeds are set to ramp much higher within just a couple of years.

“We could have scaled DOCSIS 3.0 to full spectrum, which is anywhere from 128 channels to 150 channels… but, because the number of channels you get depends on the silicon you’re using, we’d have needed new silicon for the next generation of 3.0,” said Chapman. “So we said… ‘if you’re going to build new chips, this is a good time to update the technology’… and that was the premise for 3.1.”

“We changed the modulation to orthogonal frequency division multiplexing, which gives us more flexibility in how we allocate spectrum; we changed the error correction to something called low-density parity-check, which gives us a very nice boost in performance and allows us to increase the modulation by one or two orders… and we put in a bunch of other troubleshooting techniques… we made it a very superior system.”

Vendors such as Broadcom, STMicroelectrics and Intel are all well progressed in developing 3.1 chipsets. “Most of them are starting off with two channel blocks… [each] with a max channel size of 192MHz. Which is equivalent to 24x8MHz, or 32x6MHz… each one of those [blocks] is good for 1.5GHz, so two of them are 3GHz. So cable modems are shipping at way more than what the market needs,” said Chapman. “I’m sure that within a couple of years, we’ll have cable modems out for full spectrum… we are on an exponential trajectory with the silicon guys [towards] full spectrum support at a very, very cost-effective price.”

“We think we can [ultimately] get 8-10Gbps out of it… if we had all the [spectrum on the] coax, it’d be 8-10Gbps – but we have to share it with digital video, and in some cases analogue video.”

Chapman is forecasting DOCSIS 3.1 field trials by 2016, with initial early deployments the same year – “there’s a lot of provisioning, and to really take advantage of 3.1 there’s a lot of software driving it” – and mainstream rollout in 2017.

And he says the costs to upgrade from 3.0 to 3.1 are fairly minimal: updated cable modems and cable modem termination systems, both of which can be deployed ahead of services becoming available (the CMTS can be updated when appropriate by replacing a plug-in board). That could all make HFC vs fibre more of an economic decision than anything else.

“Let’s assume DOCSIS 3.1 is every bit as fast, and has equal performance as, fibre. Which it does for the foreseeable future,” said Chapman. “Sometimes fibre’s cheaper; sometimes DOCSIS is cheaper; the job of the technologist and the engineer is to go ahead and make the technology work. And then the job of the businesspeople is to figure out the right one for an approach.”

“Fibre does have some advantages… if you’re going to build a new plant and you’re looking at a 20-30 year horizon, and you know you’re eventually going to go to fibre one day – put the money into fibre today,” he added.

“And fibre plants can have lower maintenance costs. [But where HFC] already exists, it’s far cheaper to maintain an existing plant than it is to start from scratch…it’s cost-prohibitive to wire up an entire country with fibre. Australia tried it, a lot of people have tried it, Verizon tried it in the US.”

“I think the answer is what Australia has learned through the school of hard knocks… a blend of the two technologies,” concluded Chapman.

“Wouldn’t it be great if you could get a network up and running for the least amount of investment possible – and then incrementally improve [it], either with DOCSIS 3.1 or fibre, and make that decision based on the… business case for each neighbourhood?”

Petroc Wilton


Change of the Telstra guard: we interview David Thodey, Andy Penn

thodey

Telstra CEO David Thodey has announced his retirement, after effectively transforming the business and doubling its value to over A$80 billion during almost six years at the helm. To replace him, Telstra’s board has tapped current CFO and international group executive Andy Penn, who will take the reins from May this year.

CommsDay group editorial director Petroc Wilton spoke with Thodey about his time in Telstra’s top seat, and with Penn to discuss the road ahead.

Communications Day: When you came into the role, Telstra’s relations with almost every corner of the market were very different from now – almost adversarial with government and wholesale customers, certainly very different with consumers, and at loggerheads with the NBN project. What were your personal thoughts at the time on transitioning away from the Sol Trujillo legacy and, almost six years on, have you achieved what you’d set out to do?

David Thodey: The short answer is yes. We’ve achieved a lot, I think, in normalising relationships with the many stakeholders that we work with. And you’re right; when I took on the role, there was quite a bit of antagonism in a number of the relationships, maybe because there was a very difficult period of policy development and the Labor government had decided to proceed with the building of an NBN in which Telstra’s role was yet to be defined.

So yes, we spent a lot of time trying to understand what was in the best interests of those shareholders, how to work with government and other stakeholders. And I think, over the period, we’ve built a level of trust and understanding of each others’ positions; not to say that we’re always in agreement, but at least we can sit down and have a frank and open discussion about the considerations. And that’s reflected in nearly all the stakeholders we deal with now, all sides of politics – remembering that the job of the CEO of Telstra is… looking after the interests of shareholders, but within the social and national fabric in which we work.

CD: I guess it’s a challenge, when you move towards a more trust-based or more conciliatory role, to not be seen by those shareholders as giving more away. Obviously at this point Telstra’s results have vindicated your approach – but was it initially difficult to get support, whether at board or executive level or from shareholders, for your new tactics?

DT: I would not consider it conciliatory, because that was not what we set out to achieve. What we set out to achieve was an open, frank and transparent dialogue, and to build trust. Because that’s how you get to the best outcome.

Yes, it does require some compromises along the way, but you try to focus on the big issues. And those, for us, were that we were in a regulated industry where the government had the right to change policy, but our job was to represent the best interests of shareholders. And that’s the balance we had to take. It was the combined position of the board and management that we [should think] carefully about these issues – and, very importantly, how we could better serve the customers, and make a difference to them. That helped us in all the negotiations we had to go through.

CD: That’s a very convenient segue, because… perhaps the clearest element of your strategy, from a very early point, was that hugely increased focus on the consumer [which at that point] not a lot of the industry was really talking about. What drove that thinking for you in the first place?

DT: As with all things, it’s a combination of your experience, where you’ve worked and what you’ve seen work. I’ve always had a very strong conviction, both from my time at IBM and when I ran the mobiles division and then… the enterprise division at Telstra, that if you focus on the customer and serving the customer, that makes the organisation look externally; it creates the right culture; and you create value for your customers.

The question, in a company like Telstra, is can you really do that at scale, and really make a difference; can you surprise, can you deliver good, consistent service? And it needs both cultural change and process change; it needs a whole different way of the system working. We had that strong conviction, we started at the job, and we put many different processes in place – segment by segment and product by product.

And it has created value; we also did a lot of financial modelling on it, to say ‘if we were able to do that, what would be the financial implications?’ It [wasn’t] just an altruistic objective, it was about creating shareholder value – and we’re pleased to see that it has made a difference. But we believe it’s a fundamental tenet of our strategy for the company.

CD: Something you’ve emphasised more recently, since perhaps the start of last year, is the importance of embracing innovation – both within Telstra and in the broader economy. Are you confident that initiative will continue within the company – and how do you see Australia, more generally, faring now?

DT: I do strongly believe that innovation is at the heart of good business – and innovation is not just big lightbulb moments, but is in everything you do. How you write a piece in the media, how I write a process, how I create product or serve customers; you can be innovative in everything you do. I believe that human beings are fundamentally creative beings, and if you can tap into that innovation both at a business level, an individual level and a national level, it creates value…. I think it’s critically important for all companies, and for a nation like Australia.

I think we’ve embedded a number of principles in the company around innovation, and we’ve put a number of processes in place to facilitate [it]. It still has a long way to go, but I think the seeds have been planted and we’re starting to get some momentum in that area.

CD: You mentioned that closing the NBN deal – both versions of it – was one of your most significant challenges. With the second iteration of the deal now done… can you share some personal reflections on what that process was like from the inside?

DT: What characterised the NBN deal was its complexity, and the large number of stakeholders that we had to consider through the process. We had to consider the political [elements], the regulatory environment, the role of the Department of Communications and all their responsibilities, our shareholders, the industry, the technology… and NBN Co, a state-owned enterprise. And the Australian Competition and Consumer Commission played a role there, as did the Australian Communications and Media Authority. So trying to pull all that together… and craft a solution that would create value for our shareholders, or at least protect value, as well as meeting all the other stakeholder criteria, was at any one time an incredibly complicated process to go through. [It] resulted in two and a half years of work, and contracts that stood probably a metre high.

There were good moments and bad moments as we went through that; times when we felt we were making progress, and times when we felt there wasn’t a solution, that we had to come back and be creative and innovative in finding ways through it. That’s what made it so satisfying to complete in the end – but also so challenging.

CD: Andy, you’ve said that you’ll be continuing the strategy that David put in place, and prioritising a smooth transition. That’s obviously what you’d expect, especially with a business in very healthy shape, but when might we expect you to start putting your own mark on Telstra?

Andy Penn: As you say, it’s what you’d expect because of how the company’s performing – but also because I’ve been very integrally involved with David and the senior team in developing the strategy over the last three years. So my focus is very much on delivering against that strategy; my mark will come through in the execution and the delivery. The great thing is in taking over from David that he’s left a wonderful legacy, a wonderful platform for growth. I think we have a very clear path forwards.

CD: You also mentioned a passion for Asia, and that’s clearly been identified as a key plank of the Telstra strategy for some time. Now that you’re in the top seat, will that accelerate Telstra’s progress into Asia or change the way it expands there? What are your key short-term priorities there, in what is a very disparate market?

AP: We’ve already stepped up significantly our level of engagement in Asia… we’ve doubled the level of corporate development resources we have in the region, there’s the partnership we have with PT Telkom in Indonesia, we announced the acquisition of Pacnet before Christmas. So I don’t know if [my appointment] means we’ll accelerate from today; we’ve already accelerated!

I think the opportunities in Asia are very interesting, very exciting because I see a sort of confluence of factors. On the one hand, you continue to have young and rapidly growing populations and economies, with a middle class getting larger. On the other hand, you’ve got the evolution of technology, leading to more interesting ways of using connected devices and the penetration of smartphones generally… there’s more technology available, at a time when more people can afford it. Those two things are just going to accelerate the growth in the region, and I think there’s lots of different ways we can participate in that opportunity.

But we’re certainly not going to lose sight of the fact that we’ve got a very significant, successful and important business here in Australia. We have a strong team in Asia as well; I will need to allocate my time accordingly and get the balance right between making sure we continue to grow and focus on the customer here, but also looking for opportunities to grow internationally.

And it’s not just Asia, either; we made a number of acquisitions [elsewhere] recently, really looking to where some of the capabilities are that are going to be relevant for us and the industry in the longer term. Such as the investments we’ve made in intelligent video in America and Europe, and the investments we’ve made in eHealth… the IP that’s relevant to the industry and relevant to our aspirations is globally distributed, and that’s where we need to look.

CD: And what are the key challenges, or areas of focus, that you see in the domestic market?

AP: I think there are really two areas. Firstly, our strategic network differentiation is really important; we believe that what customers want is high-quality, fast, accessible network available where they want it to be available. So that’s been a core platform of our strategy on the mobile side, and increasingly so on the fixed side; the rollout of the Wi-Fi network is instrumental in that regard. So we’ll be continuing to invest very strongly in that level of network differentiation.

The other side: if we think about how customers use the network today, increasingly, it’s more than just voice and SMS. They’re downloading media, watching content on mobile devices. So the more we can actually bundle and provide the services which customers want to experience on our network with the core network performance, that will be really important as well. Triple play on our fixed broadband service, for example… has been very successful last year.

Petroc Wilton


EXCLUSIVE: Megaport goes global, appoints Microsoft exec as CEO

Megaport, the flexible network interconnection specialist founded by Bevan Slattery, has unveiled plans for a massive global expansion blitz just over a year after launching in Australia.

The firm is aiming to hit 25 key markets in the US, Europe and Asia within eighteen months – targeting break-even for each within a year – and has brought on Denver Maddux, a Microsoft and Limelight veteran, to lead the charge as CEO. Slattery himself will remain on board as executive chairman.

Shortly after its mid-2013 launch, Megaport pushed deep into Asia in response to growing demand for scalable cloud interconnectivity services. Singapore and Hong Kong were two of its first expansion areas, with a Japanese deployment also on the cards. But the company has now committed to an accelerated growth plan that will see it service more than two dozen key markets.

“In some of those, we have some services that we’re already working through contracts on… to acquire the appropriate level of commercial services we might need to launch the business; some are tied to partnerships that we’re working on [with] either multinational or regional players,” Maddux told CommsDay.

“Most of the licensing and contracting that we’ve done so far has been focused on the Asian markets, and we’re working on what we need to get done in North America and Europe right now.”

“Those markets will follow a lot of the common internet infrastructure in North America… Seattle, Los Angeles, the Bay Area, Virginia, New York, Atlanta, Chicago, Dallas…and there’s some other secondary markets that are of interest like Phoenix, Arizona, maybe Houston, Texas and so on,” he added. “Markets that are pretty well established in terms of critical infrastructure and locations, where our service would be most useful. But we’re looking for opportunity markets too, and we’re looking for partners in [those] markets that are really interested in helping with location differentiation and footprint expansion.”

“In Europe [we’re targeting] London, Paris, Frankfurt and Amsterdam… we’re also looking at some other markets like Spain, Italy, Sweden and potentially some other countries that don’t have such highly established infrastructure.”

“The cloud services businesses in both of these markets – the likes of Amazon.. and of Microsoft with its Azure ExpressRoute product, and Google Compute which is coming out in the next couple of weeks – they’ve all got some reach challenges with their connectivity products,” continued Maddux. “We’re working with those connectivity partners to make sure that, from a strategic direction, the places we want to build also align with the things they need to help solve.”

While Megaport has built physical fibre infrastructure in some of its early markets, Slattery told CommsDay that wouldn’t be the case for the accelerated global expansion. “We expect to be partnering and acquiring network infrastructure from existing providers in those markets,” he said, adding that in fact Megaport was in the process of splitting out its existing fibre assets into a completely separate business (see next story).

“We’ve always said that Megaport isn’t about Australia – it’s about taking it to the world. What we’ve focused on is making sure that the product is right… [that] we’ve got an understanding of how we approach the sales side when we go to markets through partnerships. I’m really happy with how we’ve got that; the Australian network, operationally, has already broken even… and we’re not seeing competition  [in terms of] anyone delivering a product of similar scale, technology and capability to what we’ve got. So now is the time to expand!”

Slattery expects to spends somewhere around A$10 million on the expansion between capex and opex over the next twelve months. On the revenue side, Megaport isn’t disclosing targets, but Slattery said that “once we roll out a region or a market, we expect that market to break even within the first twelve months of operation.”

CHANGE AT THE TOP: Maddux’s most recent experience will bear directly on his leadership at Megaport. As network technology and architecture VP of global digital content player Limelight Networks he was responsible for engineering – underpinning global expansion plans – plus network and services supply chains and partnership opportunities.

“I really spent a lot of time trying to take what started as a very small regional content distribution network and deploying that in a global fashion,” he said. “I took the network from two sites to over 150 by the time I left the company!”

More recently, Maddux served as senior director of global network services at Microsoft. “[The company] was really wanting to invest heavily into its network strategy in order to propagate its cloud services platform, Azure, globally; I spent a lot of time inside the company bringing in the appropriate staff… and pushing Microsoft into its first foray into dark fibre acquisitions, both terrestrially and submarine, as well as increasing its participation in the internet ecosystem – not just as a network operator but as a network innovator.”

Maddox has known Slattery for years – indeed, he describes the Megaport founder as a “mentor” while he was helping to roll out Limelight in Australia – and was intrigued by Megaport’s model, leaping at the chance to take on the top spot. His first priority is “finding the right people to help us come and execute on the plans we’re laying out here; I will always be recruiting and hunting for the next great person to join the company.”

“The other is making sure our platform gets propagated… there’s a tremendous interest… and I believe it’s revolutionary, so making sure we actually go and attack that distribution plan… on a global basis, as well as finding the appropriate partnerships that want to help enable that,” he added. “And of course we’re going to keep a really strong eye on emerging technologies, to see what else we can do [with] the platform!”

To support Maddux, Megaport has promoted Belinda Flanders to executive VP for APAC and MEA, and appointed Brynn Maddux – also from Microsoft – as EVP for the Americas and Europe.

Slattery, meanwhile, will remain involved at a strategic level as executive chairman. “It’s more like a partnership, I suppose, than anything else. But Denver’s going to lead it; he’s the CEO,” he said.  “We’ve developed the technology, we’ve proven the model… I’ve probably got, at times, pretty good vision and I commit to things, but [there’s a] level of energy and excitement in Denver… [and a] tremendous amount of global credibility.”

“He understands – he’s rolled out a global network… he’s connected it to all these different markets around the world, to Asia and to Europe, the Middle East, Africa, the United States… I really wanted him to be involved, and I really wanted him to lead it!”

Petroc Wilton


COMMENT: NBN scrutiny held captive by one man’s obsessions

It was 1.30pm on Friday, October 3 when four experts involved in reviewing the National Broadband Network were called to address a Senate Select Committee hearing in Canberra. What ensued next got little attention in the media: it was a Friday afternoon before a NSW long weekend which was featuring none other than an NRL Grand Final promising a history-making clash between the Bulldogs and the Rabbitohs. Only a handful of people were in the room to see it.

The questioner was Stephen Conroy, former communications minister and now shadow defence minister but now seemingly resolved to concentrate his public life pursuing what he sees as enemies of his legacy NBN vision.

The four experts? Professor Henry Ergas, member, NBN Cost-Benefit Analysis and Review of Regulation, Panel of Experts; David Pearce, Executive Director, Centre for International Economics; Tony Shaw, member, NBN Cost-Benefit Analysis and Review of Regulation of NBN; and Damien White, Assistant Secretary (Former), Cost Benefit Analysis and Regulation Review, Department of Communication.

What happened over the next 90 minutes served as a disturbing marker of how scrutiny of the NBN by the parliament—an entirely appropriate and necessary calling—has been hijacked by the obsessions of one individual.

Over that 90 minutes, the questioning focused 80% on one man, Conroy’s bête noire Ergas. And Conroy wasted no time unloading on his target. After allowing the other three witnesses to make a perfunctory introduction, he zeroed in on Ergas, first of all bringing up some distantly historical court case where a Justice Goldberg had made critical comments regarding Ergas’ independence when appearing as a expert witness. Ergas batted this away, pointing out he had been involved in 51 other cases where the judge had made no such comments.

Conroy then continued with the assault, lampooning Ergas for having provided, in the past, tax policy advice to Malcolm Turnbull which was apparently never released. Ergas pointed out that it was Turnbull’s decision as to whether he should release or not release advice he had solicited, but this was not enough for Conroy– Turnbull had apparently “dumped” the paper.

Which brought us to the Vertigan panel. Conroy opined “You must be getting used to having Mr Turnbull dump your reviews before they have even been published, given that he said no to almost everything that has been recommended before he actually even released this review.” Indeed, the federal government has yet to formally respond to the recommendations but has suggested a few of them are probably best placed in the too-hard basket for now. There is little doubt that Turnbull is well disposed to the direction of many of the recommendations.

Alas, the targeting of Ergas was not over.

After some period of actually discussing the NBN, Conroy returned to his favourite theme: Ergas, this time “accusing” him of handing out how-to-vote cards for the Liberal Party. Ergas replied: “Like you, Senator Conroy, I participate in the democratic process and having done so I look at evidence with a clear mind and I try to assess it rigorously.”

Conroy replied “It is just a bit of an analysis on the cost of your credibility as an independent witness, if you hand out for the Liberal Party.”

To which Ergas replied, with rapier insight: “So, what is the credibility of members of this review that you are undertaking if you have handed out how-to-vote cards opposing the revised approach to the NBN?”

But the killer exchange came right at the end:

Senator CONROY: You got the committee to hire every single member of your former staff to do your analysis
Prof. Ergas: Oh, Senator!

Senator CONROY: It is actually a coincidence. They were just experts in the field.

Prof. Ergas: My advice on that would be that that is not a particularly fertile ground for this sort of discussion.

Senator CONROY: It is a fact. It is not a question of fertile ground. I can only confirm that Justice Goldberg was right. I do want to thank a few people who have been listening, participating and helping along the way: the great Jarl Aarq-vark; Glen Hope; Mr Mac; Sir Tailgator; Annie Pink; Helpman; Sir Xenocaust; CW; Dazed & Confused; UTC; djos; and the Earl or Conrovia. I have probably missed quite a few of you, but thank you for your help during the course of the day. That is the Whirlpool crowd who have more facts than all five of us combined.

Prof. Ergas: And a clear willingness to let people know who they are.

Senator CONROY: The facts—

Prof. Ergas: They have not provided their own names.

Senator CONROY: The facts that they provide are sourced documents.

CHAIR: I am going to draw these proceedings to a close.

Senator CONROY: Are you trying to hide the fact that you hired every failed member of your failed company to do the work in this review?

Prof. Ergas: Oh, Senator, come on!

Senator CONROY: That is just the truth.

Prof. Ergas: Come on!

CHAIR: I would like to thank our witnesses for appearing today.

Henry Ergas was but one of four panellists on one of what were several reviews of the NBN. The three other witnesses in attendance were effectively ignored. To those who welcome the complete politicisation of network investment decision-making in this country, I can only say you have got what you wished for. The NBN is a $30 billion plus infrastructure that demands proper parliamentary scrutiny on behalf of taxpayers. Clearly the select committee is failing in that task.

Grahame Lynch


Telstra ‘best in test’ for new mobile benchmark

Telstra has been named ‘best in test’ in the inaugural edition of CommsDay’s new annual mobile network benchmark. The 2014 P3 CommsDay Mobile Benchmark also highlights some significant strong points for both Optus and Vodafone and shows that all three of Australia’s mobile networks are well on par with their international counterparts.

Launched today by CommsDay in partnership with international consulting, engineering and testing services company P3 communications, the benchmark is unprecedented in its scope and level of detail. It draws on over 200,000 voice and data test samples taken across metropolitan areas, smaller towns and cities, and connecting roads and highways, accounting for a significant and representative share of the overall Australian population. Test metrics include voice call quality, success rates, file upload and download speeds, website access, SD and HD mobile video performance and more.

Telstra came away with the highest overall score and also took the top spot in each of the three main categories: smartphone voice performance, 3G data and 4G data. It did consistently well throughout metro areas, smaller cities and towns, and the connecting routes.

Optus came in a strong second overall with a solid, sustained performance across voice and data categories. The detailed scoring showed reliability as a particular advantage for Optus, with some very high success ratios in both data and voice. Vodafone’s key strength, meanwhile, was in data speeds particularly for 4G and, despite the carrier’s focus on metro areas, it actually came a close second to Telstra for 3G and 4G performance in smaller cities and on the highways.

“CommsDay congratulates Telstra on taking the top spot in this first year of the Benchmark,” said CommsDay group editorial director Petroc Wilton. “However, results clearly show that Vodafone and Optus have some important advantages of their own as well as highlighting some areas for improvement for all three carriers. Considering the investment they’re all making in their networks right now, and some of the initiatives they’ve already got underway to boost network coverage and performance, I’m looking forward to seeing how the scores improve next year!”

Because P3 communications has been running similar mobile benchmarks in Austria, Germany and Switzerland for several years, it’s also possible to compare the results for Australia’s mobile operators with some of their international counterparts. Vodafone, Optus and Telstra’s scores put them firmly on par with the operators overseas.


New impartial benchmark to compare Australia’s mobile networks

Australia’s daily telecommunications journal CommsDay and international consulting, engineering and testing services company P3 communications announce the launch of a new annual comparative benchmark for Australia’s three mobile networks. The report will objectively evaluate and compare the performance of the Optus, Telstra and Vodafone networks from the user’s perspective, based on an extensive and comprehensive series of tests conducted each year.

The 2014 mobile benchmark will focus on the performance capability of the 3G and 4G networks for voice and data, measured via both drive tests and stationary tests through August and September. The final report will be published in a special edition of CommsDay Magazine, to be released at the CommsDay Melbourne Congress on October 7 & 8 2014.

Test metrics will include voice call quality, success rates, file upload and download speeds, website access, SD and HD mobile video performance and more. Testing locations and routes have been carefully selected in order to cover a significant and representative share of the overall Australian population. Tens of thousands of measurements will be conducted across major metropolitan areas, smaller towns and cities, and connecting roads and highways.

The report will be written and published by CommsDay, while the testing will be conducted by P3 communications. Both partners bring extensive telecoms knowledge and know-how to the project.

P3 communications has a wealth of highly developed expertise in the area of mobile and fixed networks testing. It has been conducting similar mobile benchmarks since 2002 in Germany and in Austria and Switzerland since 2009, the well-known ‘Connect Test’ (see connect network test 2013) and is also launching an annual benchmark in the UK later this year. In 2013 alone, P3 communications compiled about 40,000 measurement hours in 42 countries across five continents, with its test vehicles covering more than 500,000 miles.

Meanwhile, CommsDay has built a reputation for objective and insightful reporting and analysis across every area of the telco market in Australia and beyond over the last two decades. Both partners have collaborated closely through the project, with P3 consulting CommsDay around the details of the Australian mobile telco landscape, and sharing its own experience of scoring and reporting from other European benchmarks.

“For CommsDay, the benchmark provides an opportunity to supply a wealth of detail around mobile network performance that will be of keen interest to many of its readers, as well as to a broader audience,” said CommsDay group editorial director Petroc Wilton. “It also reinforces the publication’s standing as the authoritative source of objective information on telecommunications in Australia.”

“The launch of the benchmark in Australia gives P3 the opportunity to extend its proven leadership in the field into this advanced market and to boost its presence in the wider region,” said P3 communications managing director Marcus Brunner.


The full programme for CommsDay Melbourne Congress 2014

CommsDay Melbourne Congress returns with a two-day event over Tuesday 7 and Wednesday 8 October at the Langham Hotel.

The congress, in its seventh year, features a superior line-up of industry leaders and experts including:

* Ziggy Switkowski, NBN Co chairman
* Telstra GMD, networks Mike Wright
* iiNet CEO, David Buckingham
* Vodafone Australia CTO Benoit Hanssen
* Optus vice president, corporate and regulatory affairs David Epstein
* Equinix country manager Jeremy Deutsch
* eintellego networks MD Skeeve Stevens

As well as views from Australia’s leading telco operators, the Congress will also drill deep into specialised topics:

*The release of EXCLUSIVE research benchmarking the performance of Australia’s mobile networks as well as the findings of a study into Australian consumer attitudes towards mobile apps
* An exclusive case study on what is believed to be the world’s first mobile mesh network, a forerunner of 5G
* The father of DSL and vectoring, Dr John Cioffi, direct by video link from the US
* Expert presentations on software defined networks and network function virtualisation, including a keynote speech from Alcatel-Lucent Nuage Networks principal solutions architect (global) Scott Snedden
* A detailed look at the opportunities for data centres and telcos from 3D printing
* An update from Arris on the latest developments in HFC

Plus the Summit will feature a broad range of perspectives on policy and regulatory issues

* Parliamentary secretary to the communications minister Paul Fletcher
* Shadow communications minister Jason Clare
* Greens senator Scott Ludlam on data retention
* ACMA deputy chair Richard Bean
* Former ACA chair Bob Horton on spectrum policy
* NBN expert panelist Dr Reg Coutts on whether the USO should be revamped
* Former comms minister adviser David Havyatt on how to depoliticise the NBN
* Gilbert+Tobin partner Simon Muys on where telco regulation will be in 2020
* Perspectives from Comms Alliance and AMTA

Join nearly 300 industry colleagues at what will be our best Melbourne event yet!

REGISTER HERE


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