Interim satellites not NBN-suitable: Optus

Optus' Ku-band satellites can be used to deliver interim broadband services for NBN Co, according to Paul O'Sullivan, but would not be able to deliver the same speeds as NBN Co's Ka-Band satellites.

Last year, Optus was selected to deliver satellite broadband to regional and remote areas of Australia for NBN Co as a stop-gap measure until the full NBN satellite service is operational in 2015. The interim satellite service can handle a maximum of 48,000 premises, and offers download speeds of a maximum of 6 megabits per second (Mbps).

Shadow Communications Minister Malcolm Turnbull last week suggested that the interim service "could become upgraded and become a permanent service", in lieu of the Federal Government forking out $620 million for the design of two new Ka-band satellites by US company Loral.

Yet Optus CEO Paul O'Sullivan said today that although Optus' Ku-band satellites could handle 200,000 users, it could not deliver the 12Mbps NBN Co is promising, because it is not purpose-built for broadband.

"The difference is really the way in which the spot beams are tailored and focused in order to carry traffic. As we mainly carry broadcast content — video, television programming, etc — on our satellite, that's quite different to the Ka-band, which is what is used for the broadband satellite," he told journalists in a conference call this afternoon.

"The NBN satellites are purpose-built to carry broadband traffic. Ours carry broadband traffic but have not been designed specifically for that purpose," he said. "We could carry this traffic but we wouldn't be able to do it with the speed, economics and capacity of a Ka-band satellite."

In the last quarter, Optus added 182,000 new mobile customers. In order to cope with the demands on its network and improve in-building coverage, the company is rolling out 3G upgrades, shifting services onto its 900MHz spectrum. The first half of this year will see the 900MHz network switch on in Sydney, Melbourne and Perth, with the telco set to move to other capital cities "after that".

Sydney, Melbourne and Perth will also be the first capital cities to get long-term evolution (LTE) "4G" services from Optus later this year, after a planned launch in Newcastle in April. O'Sullivan said that Newcastle will be a good test market for LTE.

"We have put a lot of investment into the Newcastle area over the past few years with modern equipment and network. It's a very good place for us to test market and to get used to how the technology operates and then take it into the capital cities."

As with Telstra's LTE devices, Optus devices will shift to 3G when outside of LTE areas.

Telstra CEO David Thodey last week said that LTE broadband dongles had been "selling like hotcakes" since the launch of the service in September last year, with over 100,000 devices sold so far. Despite Telstra getting the early foothold in the LTE market, O'Sullivan said that the increasing number of products and Optus' existing strong 3G customer base will put it in a good position by April.

"Given we have already built a strong 3G base, we think there will be strong take-up of the product," he said. "The range of the products in the market will increase significantly on what is available today."

Optus has yet to decide how it will pay for the spectrum the company is looking to secure in the digital dividend to use for its 4G, and today the company indicated it would either fund it through debt, or through existing free cash flow.

TV Now

Just as Apple's prolific patent lawsuits against Samsung increased the notoriety of its Galaxy Tab 10.1 product, O'Sullivan said that customer interest in its TV Now TV-recording app had increased since the news of Optus' victory over the football codes in the Federal Court earlier this month. O'Sullivan said that it was important to ensure regulation didn't get in the way of what products customers wanted.

"I'd like to reinforce our view that Australians have a lot at stake in the new digital era, so therefore it is essential we get the regulatory settings right. We cannot allow the digital future to be dictated to by any one interest group," he said.

"It's unfair and unrealistic to deprive Australians of the right to use technology that is right at the forefront of how individuals are using the internet globally."

He said the content should be freely available and all carriers should have a right to access it.

"Otherwise there is a risk that those with the deepest pockets, and starting from a position of incumbency can afford to pay for most of the rights and use them as a barrier to competition."