NBN CEO explains no need for speed comments

He infuriated Australians saying there was no desire for super-fast broadband now Morrow has explained his comments.

NBN chief executive officer Bill Morrow. Picture: Supplied

There has been a lot of discussion in the media in recent days around the type of broadband speeds Australians need.  

This has largely been driven by the availability of superfast 'gigabit' speeds, which are around 40 times faster than nbn's most popular service.  

I'd like to clarify a few key facts in this very important debate. nbn offers gigabit speeds to its retail customers today. In fact, more than 1.5 million homes and businesses across the country can access it on their nbn service.

However, the retailers are not selling it. We think the reason for this is because there is still minimal consumer demand - especially at the prices they would have to charge to deliver these services to so few. 

Of course, the demand for these services could change which is why we are already building a network which will be capable of delivering these speeds to more than one in three homes by the time we are complete in 2020. The other parts of our network have upgrade paths to offer the same ultra-fast speeds when demand comes around.

But our research tells us this demand is still a long way off. Even in a heavy internet usage household right now you'd struggle to generate the need for anything like gigabit speeds. For example, if you had five 4K televisions streaming ultra high-definition movies simultaneously then that would only use one tenth of what the service could handle. 

In fact, by today's viewing standards, the service would be enough to stream more than 200 movies simultaneously - way, way beyond the requirements of normal households.

Market demands drive our retailers, and they then drive the wholesale options made available by nbn. It would be futile for us to be spending taxpayers' money on delivering services which consumers would not use. 

If you want evidence that we are taking the right approach then you need only look at what is happening in the US where Google Fiber announced last October that it would be putting its much publicised network deployment on hold and would look at new ways to deliver ultra-fast broadband.

Google Fiber found that the demand for gigabit broadband simply wasn't there - once the initial hype of the project had faded and the product hit the streets not enough people wanted to buy the service as they were largely able to do what they needed on their existing connection.

We know Australians want fast internet and they want it as soon as we can give it to them.  But we also know that gigabit services are simply way beyond the needs of even the most data hungry homes right now - let alone what is needed by regular families across Australia. There is literally not a single residential consumer application - or even a combination of applications at this point in time - that requires the capability needed to fulfil the bandwidth which 'gigabit' services would take-up.  

As new throughput-hungry applications, like virtual reality, artificial intelligence, and 8K TV make their way to the masses, we know these higher speeds will be needed.  Until then, however, the government has decided to build for today's needs and ready ourselves to expand as the market demand emerges-which is inherent in the design of our network and something that we are ready and willing to do.

With almost half of the network due to be complete by the middle of this year, we are well on our way to delivering the broadband speeds which Australian homes need. Next year we'll be three quarters built and done shortly thereafter. Even if we left the network architecture as is, we will have nearly half of the nation equipped for gigabit speeds-which is far better than most other countries of our size.

We hope that by making Australia the world's first fully connected continent we can help to create a market for services and applications which will use gigabit services and, when that happens, nbn will be further investing its own profits to further upgrade the network.

Bill Morrow is CEO of nbn.

Originally published as NBN CEO explains no need for speed comments