NBN Discussion

[RAM]

Whilst a big fine, think it was known, and the company made almost $200m for the last half

Yes the fine should have been known about or at least that is was coming and had been delayed to just a few days before Xmas to decrease its adverse impact. GE had been advised of it some months earlier apparently. Curiously enough I can not find one french analyst/broking house who has written about it. Funny that!

The Alstom results presentation shows that the South African project 'win' and the Australian Project wins accounted for the bulk of their order book wins.

They also sold of some of their 'crown jewels' as their banks demanded it in order to continue funding. Raised just under EUR 600m with those sales in 2014/15.

Unfortunately there are some intriguing questions being pursued by a couple of South African papers into the awarding of that project. Especially into a close relative of a leading ANC official. Worth having a look at if you are interested.

And for some reason their 2014/15 Annual report and presentation to analysts/fund managers DID NOT MENTION the US fine nor admissions made.

If not for the sale of the bulk of their business (power) to GE then even without the delay for paying the US fine they were in breach of their financial covenants. They actually wiped out nearly EURO 1 billion from shareholders' funds in 2014/15 and increased their net debt despite running down cash significantly. Have a look at the PDF (link below),
Fiscal Year 2014/15 - Annual ...

6 May 2015. Annual Results. Fiscal Year 2014/15 .

Waiver obtained on financial covenants for all facilities until completion of GE transaction.



The last half, well, a bit of smoke and mirrors involved, have a look at this from the analysts presentation. Earnings and underlying financial condition look very different. Net position deteriorated by close to EUR 2,200m in the last 6 months.

The Group’s net financial debt increased to €(4,803) million at 30 September 2015 versus €(3,143) million at 31 March 2015, mainly due to the negative free cash flow over the period.

Equity decreased over the period, standing at €3,744 million at 30 September 2015 from €4,224 million at 31 March 2015.

So Alstom lost around EUR 500m in equity AND piled on another EUR 1,700m in debt.

Not a good profile.

And still not a word on paying the fine nor the admission but a few resignations from the board...

Governance
Based on Mr. Patrick Kron’s announced decision to resign from his duties as Chairman and Chief Executive Officer after the return to shareholders of part of the proceeds of the transaction with General Electric, the Board of Directors indicated his intention to keep the functions of Chairman and Chief Executive Officer as combined into one, and to entrust such duties to Mr. Henri Poupart-Lafarge, currently Director and Executive Vice President of Alstom, who has already declared he would accept such duties.
In addition, Mrs. Lalita Gupte and Katrina Landis have indicated their intention to resign from their duties as Directors on 31 December 2015. The Board of Directors does not plan to immediately co-opt new Directors following these resignations, in an effort to reduce the size of the Board of Directors.

 

[RAM]

Now back OT.

NBN's average revenue per user is currently $43, an 11 percent increase on the same period last year.

At September 30, it had 610,712 activated premises on the network, the majority of which were on fibre-to-the-premise. Most active end users have taken up to 25/5 Mbps speed tier.

NBN starts HFC pilot in Queensland - Telco/ISP - iTnews
​

 

[moa999]

Interesting that the arpu has gone up. Stats also show more people subscribing for 25/5 over 12/1, whereas 100/40 has gone slightly backwards

 

[TheRealTMA]

Still it's gunna cost more than expected; however note the following:So, savings all up of at least $20 billion with the MTM.

In current projected expenditure, maybe. But it's going to cost us much much more in lost function and considerably more in the medium to long term in replacement of an inferior technology. Money spent now is a much better investment for the future, especially with historically low govt interest rates. (Not that governments need bother.)

 

[serfty]

TBH, by the time such would eventuate I would suspect any need for physical connections to premises to be on the way out for the majority of the populace.

... come back in five years.

 

[whatmeworry]

TBH, by the time such would eventuate I would suspect any need for physical connections to premises to be on the way out for the majority of the populace.

... come back in five years.

Sorry last time I checked wireless technology is limited to the limitations of the physical bandwidth of the radio frequency spectrum. It’s finite, and you cannot make more.

 

[ComeFlyWithMe]

TBH, by the time such would eventuate I would suspect any need for physical connections to premises to be on the way out for the majority of the populace.

... come back in five years.

Yep, with LTE technologies currently able to do 300/75 speeds with ultra low latency and very inexpensive to deploy, the NBN and other fixed residential broadband will go the way of the landline - something most Australians are already dispensing of where it isn't required for their ADSL.

Most Aussies currently have better speed and lower latency on their 4G mobile phones than their home broadband. Once the cost hits parity, say bye to fixed services.

 

[amaroo]

Yep, with LTE technologies currently able to do 300/75 speeds with ultra low latency and very inexpensive to deploy, the NBN and other fixed residential broadband will go the way of the landline - something most Australians are already dispensing of where it isn't required for their ADSL.

Most Aussies currently have better speed and lower latency on their 4G mobile phones than their home broadband. Once the cost hits parity, say bye to fixed services.

Indeed. The types that argue about the NBN have the opposite view on electrical wire/poles - go figure.

 

[drsmithy]

Sorry last time I checked wireless technology is limited to the limitations of the physical bandwidth of the radio frequency spectrum. It’s finite, and you cannot make more.

Not to mention the reliability. My 4G is awesome when it's on-song at 80Mb down and 50Mb up, but it could just as easily be running at 5Mb down and 0.5Mb up.

 

[drsmithy]

Indeed. The types that argue about the NBN have the opposite view on electrical wire/poles - go figure.

Say what now ?

Both are key infrastructure with generational lifetimes, and natural monopolies, that should be publicly owned.

 

[ComeFlyWithMe]

Not to mention the reliability. My 4G is awesome when it's on-song at 80Mb down and 50Mb up, but it could just as easily be running at 5Mb down and 0.5Mb up.

That's called contention. If investment was directed into these technologies rather than cabled solutions, those issues would not exist. In addition, if a dedicated frequency bandwidth was reserved for data use, there would be far fewer issues than the current 4G which shares the frequency with 4G mobile phones, which are inherently bursty in their data requirements.

Oh, and with performance like that, you mustn't be with Telstra.

 

[drsmithy]

That's called contention. If investment was directed into these technologies rather than cabled solutions, those issues would not exist.

I'm well aware of what it is, it's not just congestion, and yes they will.

Wireless is an inherently less reliable and less performant technology.

Oh, and with performance like that, you mustn't be with Telstra.

Yes, I am. Even have the advantage of an effectively "unlimited" plan through my employer.

I just did a speed test for ****s and giggles. 75Mb down, 38Mb up, on my phone. I imagine if I fired up my 4GX dongle it would be even higher.

 

[ComeFlyWithMe]

I'm well aware of what it is, it's not just congestion, and yes they will.

Wireless is an inherently less reliable and less performant technology.

Right. If we were in 1990 perhaps.

Yes, I am. Even have the advantage of an effectively "unlimited" plan through my employer.

I just did a speed test for ****s and giggles. 75Mb down, 38Mb up, on my phone. I imagine if I fired up my 4GX dongle it would be even higher.

Good for you, but what exactly is your point? With those speeds on your phone you have outclassed about 80% of the Australian population on fixed broadband, and trebled the most common plan on NBN.

I'll also bet your latency is below 15ms. That's if you know what that means and why it's important.

Regardless of all that, home broadband will be a thing of the past. People want mobile, portable solutions for connectivity to suit their lifestyles. Have you seen PSTN revenue lately? It's going the way of the dodo.

 

[drsmithy]

Right. If we were in 1990 perhaps.

I don't think physics has changed since the '90s.

Good for you, but what exactly is your point? With those speeds on your phone you have outclassed about 80% of the Australian population on fixed broadband, and trebled the most common plan on NBN.

"Not to mention the reliability. My 4G is awesome when it's on-song at 80Mb down and 50Mb up, but it could just as easily be running at 5Mb down and 0.5Mb up."

There's also the cost involved. You can't get mobile data plans with multi-hundreds of GB data allowances, nor are you likely to any time soon. Heck, telcos still charge extra just to pool a mobile data allowance between multiple devices.

I'll also bet your latency is below 15ms. That's if you know what that means and why it's important.

Yeah, now that you mention it I have heard the word "latency" bandied around a few times in my twenty-odd years of working in IT and datacenter infrastructure.

Regardless of all that, home broadband will be a thing of the past. People want mobile, portable solutions for connectivity to suit their lifestyles. Have you seen PSTN revenue lately? It's going the way of the dodo.

Predicting lifestyles of people fifty years into the future ? Bold.

PSTN is a bad comparison. Mobile phone calls and PSTN phone calls are interchangeable. Cellular internet and fixed line internet are not.

 

[ComeFlyWithMe]

I don't think physics has changed since the '90s.

No, but the technology has.

"Not to mention the reliability. My 4G is awesome when it's on-song at 80Mb down and 50Mb up, but it could just as easily be running at 5Mb down and 0.5Mb up."

There's also the cost involved. You can't get mobile data plans with multi-hundreds of GB data allowances, nor are you likely to any time soon. Heck, telcos still charge extra just to pool a mobile data allowance between multiple devices.

That is the whole point. If these technologies are invested in and embraced ubiquitously, the cost goes down per user. Basic economics.

Yeah, now that you mention it I have heard the word "latency" bandied around a few times in my twenty-odd years of working in IT and datacenter infrastructure.

I'm glad. Surely you would know that connectivity for data centres is an entirely different matter to residential broadband, yet you still think every home needs fibre on the taxpayer's dime.

I certainly agree that fibre is an essential component of DC and business/corporate connectivity.

Predicting lifestyles of people fifty years into the future ? Bold.

PSTN is a bad comparison. Mobile phone calls and PSTN phone calls are interchangeable. Cellular internet and fixed line internet are not.

No prediction required, only observation.

How are consumers consuming the majority of data? Via mobile devices. This isn't just a fad, it's a trend. Consumers aren't going to suddenly say one day, "oh I better go home and connect to my fixed broadband as my mobile service doesn't cut it!".

 

[drsmithy]

No, but the technology has.

Doesn't change that wireless is inherently less performant and less reliable than wired.

That is the whole point. If these technologies are invested in and embraced ubiquitously, the cost goes down per user. Basic economics.

Here's some slightly less basic economics for you: what the end user pays is independent of what the provider pays.

It's competition that drives down costs. What do you think the chances of strong competition in contemporary Australia, the land of duopolies, extensive white corruption and comically ineffectual regulation ?

I'm glad. Surely you would know that connectivity for data centres is an entirely different matter to residential broadband, [...]

Indeed.

But I thought we were talking about your childishly smarmy question about knowing what latency is.

[...] yet you still think every home needs fibre on the taxpayer's dime.

I think that if you are putting in new telecoms infrastructure today, with lifetime measured in decades, doing it with technology you know has scalability limits that will be reached within a relatively short timeline is moronic.

No prediction required, only observation.

Ah. You mean like that observation of exponentially growing bandwidth usage you're trying to argue will suddenly stop ?

How are consumers consuming the majority of data? Via mobile devices.

On their piddly few GB/mo phone plans ? Don't make me laugh.

If what you assert were true they would't be getting home internet plans with tens to hundreds of GB, if not "unlimited" downloads, and they wouldn't care about whether they were getting ADSL1, ADSL2, Cable or fibre.

Yet strangely, they do.

This isn't just a fad, it's a trend. Consumers aren't going to suddenly say one day, "oh I better go home and connect to my fixed broadband as my mobile service doesn't cut it!".

Plenty of people postpone large downloads (OS updates, games, etc) until they are on wired connections.

 

[moa999]

what the end user pays is independent of what the provider pays.

wouldn't care about whether they were getting ADSL1, ADSL2, Cable or fibre.

Yet strangely, they do.
.

Ignoring the fact that most will want to make a profit, so ultimately the costs that NBN and overseas cable providers charge will impact your charge.

While some will care. To many Internet is Internet...

There certainly is an argument that in the future a 5G WiFi on every power pole might suffice but for now it certainly doesn't (even Telstra Air efforts are poor)

I've got no issues with MTM FTTB or HFC (I'm on FTTB) - it is undoubtedly cheaper and quicker. I do think those who will be 400+m from a Node under FTTN are the ones who will suffer.

 

[drsmithy]

Ignoring the fact that most will want to make a profit, so ultimately the costs that NBN and overseas cable providers charge will impact your charge.

Certainly. But without competition (or regulation) prices do not drop (or product do not improve).

While some will care. To many Internet is Internet...

I think you will find, going forward, that people care about whether their internet lets them download 3-10GB/mo, vs tens or hundreds, more and more.

There certainly is an argument that in the future a 5G WiFi on every power pole might suffice but for now it certainly doesn't (even Telstra Air efforts are poor)

I've got no issues with MTM FTTB or HFC (I'm on FTTB) - it is undoubtedly cheaper and quicker. I do think those who will be 400+m from a Node under FTTN are the ones who will suffer.

One point here is it's not all that much cheaper or quicker (I'm assuming you mean quicker to build), especially in the context of an asset whose life is likely to be many decades.

You are correct that those who are hundreds of metres from nodes will suffer, and will suffer proportionally more, as while every drop of blood will be squeezed out of copper technologies, the distances they are able to deliver will get shorter and shorter.

Cellular will play its part - a major one - in a widespread net of connectivity. As will high-speed localised wifi hotspots piggybacking off the excess bandwidth of wired broadband connections.

 

[ComeFlyWithMe]

All this talk about "competition" yet the government is building a wholesale monopoly. Go figure.

 

[badseed]

'Competition' can only exist where there is a (somewhat) level playing field. Building in separate POI and backhaul infrastructure is such a high barrier to entry that it renders competition all but moot. It's a textbook example of where the State should step in and build the infrastructure then allow the true competition to happen in the actual provision of service. ADSL was similar where 85% of all connections were on Telstra copper for the last mile. The difference being that each ISP (at first before the ACCC forced Telstra to wholesale) had to install their own DSLAM in each exchange. A massive waste of resources, and of course Telstra used their monopoly over exchanges to restrict and / or prevent access.

This is why Telstra should have been structurally separated before being sold off in the first place. Howard and Costello instead went for the high sticker price, not for what would have provided the best long-term outcome for the taxpayers.