Is the Aussie ISP a threatened species under NBN regime?

Andrew Khoo, Solutions Architect at AmaySIM spoke at AusNOG in Melbourne last week and explained that Australian ISPs are experiencing high levels of churn and reduced margins as the NBN is rolled out across Australia. Especially for ISPs outside of the “big 4” who don’t have the capacity to connect directly to all 121 NBN inter-connect points and are forced to buy the NBN service through an intermediary.

This is very similar to the NZ situation as the local government rolls out the UFB (Ultrafast Broadband Network) to around 87% of NZ premises. While the NZ UFB has a much lower barrier to entry for smaller ISPs, there is still enormous pressure on the small and mid-tier NZ ISPs from the large ISPs who offer multifaceted services.

Those multifaceted services include mobile and power being offered by a traditional telco (Slingshot), a Vocus brand and internet service being offered by electricity generators (Trustpower). These are all situations where cross-subsidization could occur between different services giving the large ISP an advantage over the smaller operator.

In both NZ & Australia, the fibre rollout has led to a land grab by ISPs as they take advantage of customer churn, driven by the awareness of new services available over the fibre networks not available on the copper networks such as high-resolution video streaming and multi-subscriber video streaming.

The NZ ISP market leads Australia by several years, so it is simple for Australian ISPs to see their future by looking across the Tasman to their NZ peers. There is still room for ISPs in Australia to bring other services into the mix (such as energy retailing) which will hit ISPs hard who are already struggling due to low margins and no significant point of difference from their competition.

ISPs selling over NBN need to evolve too rapidly to avoid extinction.  The quote that comes to mind is from Korean business theorist, W. Chan Kim who said in his Blue Ocean Strategy book, “The only way to beat the competition is to stop trying to beat the competition.” This is usually interpreted as instead of trying to beat the competition, do something different; precisely what the NZ ISPs who are crossing over into electricity resale are doing.

New Zealand ISPs are differentiating by adding related services to their internet service. Stuff Fibre (a one-year-old fibre ISP) has found good traction offering a parental controls service to their customers. This has immediate appeal to families with school-age children and provides a tangible point of difference from their competitors who talk about benefits such as internet speed and price.

Instead of competing based on price, speed and data they provide the end user with a point of difference that addresses a key concern in every family home with school-age children, how do we manage screen time?  

Talk to any parent in Australia, and you’ll know their kids see their device as an extension of themselves, as digital natives, and use the demands of homework to justify being online 24/7. They’ll tell you their teens stay up too late chatting with their friends, and this causes health concerns and issues with being tired at school.

We accept the Internet has more pro’s than con’s but have you ever thought about how helping your end users deal with a major breakdown will enhance your offer and improve your financial results?

Read More – Value Added Services Enhance ISP Growth

Is your network NFV ready?

Network functions virtualization (NFV) is an initiative to virtualize the network services that are now being carried out by proprietary, dedicated hardware. NFV is designed to decrease the amount of proprietary hardware that’s needed to launch and operate network services.

This fundamental shift from physical to virtualized network functions with NFV is the next step forward for communications service providers. The ability to move traditional core network services such as routers and firewalls onto virtual machines will allow organisations to quickly respond to the demands put on their network in a cost-efficient and flexible manner.

 

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Source: Spirent

Operators who are poised to begin adopting these new technologies and can deliver new products to their customers much faster using over fully virtualized networks. This is because value added services like Buddy Guard sit inside a resource catalogue, inside be the central location for building and defining these new products, exposing them to your sales channels and delivering them with zero-touch automation. This enables customers to turn on new services in minutes, using a self-service portal. With NPV the time-to-market is greatly reduced, and service automation and virtualization drive down deployment and operational costs.

NFV enables telecommunication providers the capability to offer new services to our customers in a very agile and flexible way, and the capability to bring up new functionalities on our network very quickly, coming from multiple partners.

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Source: Juniper

This new model means that security performance in NFV will be key. With the bulk of the applications is moving to a cloud infrastructure, that means the security must be inside the virtualized cloud. This requires a focus on the so-called east-west traffic that is changing hands in the data centre at the virtualization layer. Buddy Guard uses a stateful security model – in which all applications are monitored in real-time — to provide enhanced security for east-west traffic within the app and the data centre, implemented closest to VMs and containers.

Speak with us about out NPV Ready Network Level Parental Controls Platform and NPV Router Strategy today.

Having a ‘National’ impact – BNSL’s commercial director comment’s on the recent views from the Minister of Telecommunications about Global Mode.

The New Zealand Minister for Telecommunications Amy Adams has had Global Mode on her radar the last few weeks. As reported by 3News she made the point at the Nethui South conference in Christchurch commenting that the sector needs to evolve.

Synergies between communications and broadcasting make it a good move to have one minister responsible for both. As she looks towards 2020, the Minister has called for a review of the Telecommunications Act.  BNSL was invited to be part of the first workshops jointly run by Internet NZ and NZ’s Ministry of Business, Innovation and Employment (MBIE). The workshops included corporate representatives from the incumbent telecommunications and broadcasters, companies from the start-up ecosystem and industry respected legal representatives. We valued the opportunity to be involved in this multi-stakeholder cooperative approach to the policy development processes.

For a telecommunication review what was interesting was infrastructure was NOT a large topic of debate. NZ has learnt the lessons from the Australian NBN and has a good plan in place to get national fibre coverage in place.

The topic of conversation surrounded the digital economy, the promise of high-speed internet isn’t faster downloads, it’s better access to education, online healthcare and e-commerce opportunities.

Confirming the views shared by the industry just a few weeks after her comments at NetHui the honourable Minister Amy Adams was speaking with TechDay about her plans for this term, UFB and why she lobbied for the broadcasting portfolio.

Having the two portfolios allows the Minister to drive the changes she believes will be necessary as the two platforms continue to converge – something she says is a key priority for her going forward.

Adams says while government shouldn’t dictate how business models develop; it needs to ensure there is flexibility in those models and customer protection, and not ‘ridiculous levels of bureaucracy’.

“We’re moving into a world where geo-location seems a bit fictional, and people don’t understand why they can’t access what they want to” – says Adams.

When we started Global Mode®, our aim was to provide consumers with a reason to upgrade to high-speed Internet. As UFB is passing 10% uptake and on target, we’re shifting our focus slightly.

Our goals for 2015 will be to promote and enable the cross-border delivery of services, protect the global free flow of information and enable an open, & distributed and interconnected nature of the Internet.

In our view, to enable the digital economy, legislation must provide a platform for a flexible commercial environment which empowers companies to adapt rapidly to constant change, with policies guided by global economic growth.

The global Internet is a threat to traditional business models, but it also provides an amazing opportunity  if we can create a society that leverages the best New Zealand has offer, delivered online and exported.

In less than a year through unmet consumer demand & increased market awareness, BNSL has become the largest wholesale provider of performance geo-unblocking DNS services anywhere in the world. By creating a political environment which fosters transparency, fair processes, and accountability and effective and proactive approach to privacy protection at a global level the future can only be bright. New Zealand will be a world leader in the digital economy; we’ve already proven it.