The ongoing dilemma: build or buy?
While the data sector is poised for continued growth, how that growth will affect the carve-up of the telecommunications market between the various players is yet to be determined.
Traffic volumes, market share and revenue derived from infrastructure built by many telecommunications companies seem likely to fall well short of early estimates.
An oversupply of optic fibre cabling between major cities and within central business districts is prompting at least one industry analyst to predict significant price falls for fibre connectivity.
Telesyte industry analyst Shara Evans says "On some of the major routes, there are fibre-based available from several of the key players. "This competition should lead to price falls."
Evans believes current levels of long-haul infrastructure will see more telecommunications service providers opt to buy rather than build new infrastructure.
"It's about being pragmatic in the market," Evans says. "If it is cheaper to buy it, they will, use someone else's infrastructure until you can justify the costs."
However, Evans pointed out that opportunities still existed, especially in the provision of last-mile connectivity to the home or business.
"Infrastructure providers have to pick an area where someone else isn't already entrenched," Evans says.
One such service beating the odds, is ACT-based TransACT, which provides fibre-based connectivity over the last mile into 100 000 homes and 14 000 businesses across Canberra. By combining voice, Internet and television services into one offering, Transact has attracted a substantial user base. While users have to option to remain with their current Internet provider, TransACT also extends the offer to include broadband Internet services.
"In some suburbs we are nearing the point where we are the dominant provider of telephone services," says TransACT chief architect Robin Eckermann. "At the moment we have a request for tender on the streets looking for someone to provide the technology for the 25 000 homes where we don't have the option of putting in new cables because they rely on underground power."
The TransACT approach is made more interesting by the fact that Optus chief executive Chris Anderson recently argued that unless the telco was allowed to go ahead with its content share deal with Foxtel, the market would be subjected to Telstra/Foxtel monopoly.
"For Optus it [a content sharing partnership] means a viable future for all the services that we provide over our hybrid-fibre coaxial cable - which connects nearly 600,000 customers in Sydney, Melbourne and Brisbane," Anderson said during a recent address to the Austraila-Israel chamber of commerce. "Most customers take a "bundle" of services, which - in addition to pay-tv - includes local telephony and broadband internet."
While Anderson's argument pursues the notion that only Optus working in conjunction with Foxtel would be able to make viable such a bundle, TransACT is proving it is possible to provide such access on a much smaller - and more competitive - scale.
Also working in the metropolitan space is high-speed data services provider Uecomm.
According to Brendan Park, Uecomm director of products and marketing, the company's focus providing fibre to metropolitan - outside CBD - markets is starting to pay off.
"There is lots of fibre in the CBD, and a lot of people complaining about how dead the market is, however, if anyone wants fibre in the metropolitan areas of the cities the choice is either us or Telstra," Park says. "And there is not a glut of fibre in any of these areas."
Having invested heavily in fibre rollouts since the company was initially spun off energy company United Energy in 1997, Park says the last 12 months has seen the company stabilise costs, and focus marketing resources on specific segments.
"Initially we tried to spread our selves too thin, whereas now we have a focus on the Enterprise, and have had some major wins in the government and education sectors," Park says.
On the long haul
With a plethora of service providers offering alternative fibre infrastructure up and down the east coast, service providers and resellers are left with a wide range of options when it comes to bandwidth wholesalers.
So much so that New Zealand-based infrastructure provider Nava Networks has reigned in its original plans to roll out a network connecting Australia with Asia, opting to buy infrastructure to complete its offering.
"At the end of the day we are trying address a market rather than a construction opportunity," explains Nava Networks director of sales and marketing Brett O'Riley. "We looked at the capacity between Sydney to Melbourne, and at the upgrades companies like Telstra, Optus, Nextgen and IP1 have undertaken on the Melbourne-Perth route we realised we can get a competitive cost structure by buying rather than building."
However, Park also points out that in the current "capital constrained" climate it was likely that several companies opted to buy rather than invest in further infrastructure expansion.
AAPT's Bedford echoes industry-wide sentiment when he explains AAPT's approach to infrastructure, focus on making money on what is already in place.
"We've had a change of focus with our infrastructure strategy," Bedford said. He said the company had achieved its market penetration targets and "today our key focus is on delivering a return on our infrastructure investment."
All we want are cheaper prices for a much better service.
I'm sick of these high prices on phones and internet because the bastards know we need to use them. So what do they do, take advantage of us becuase of the need for phones, suck us into a contract and then punish us for wanting to exit the contract because they changed or screwed the policy on the contract to rip more money from us.
I say, blow the pricks sky high and start all over again.