SYDNEY: NBN Co is going to sign a $400 million deal with US tech company Arris Group to turn Telstra and Singtel-Optus’ cable TV network into one of Australia’s fastest sources of high-speed internet.
Telstra and Optus run hybrid fibre coaxial (HFC) networks that provide millions of Australians with Foxtel Pay TV and broadband services. These will be upgraded by Arris throughout the country, and is likely to take three years to complete.
The HFC networks can potentially reach 3.4 million premises and were signed over to NBN Co as part of deals with both telcos that are expected to be approved by regulators later this year.
Supporters of Labor’s national broadband network claimed it was a waste of money that would deliver slow internet speeds once more users were added to the service. Some existing HFC services are capable of download speeds of only 8 megabits a second, similar to what broadband services using copper phone-lines can deliver.
The latest deal to upgrade the cable networks aims to counter those concerns by supplying potential download speeds of up to 100 megabits per second and upload speeds of 40Mbps, which is also what Labor was planning to offer under its NBN.
Sources with an intimate understanding of the deal said the present HFC network was not capable of delivering high upload and download speeds due to much of its equipment being made to a Data Over Cable Service Interface Specification (Docsis) 1.0 standard.
Arris will be brought in to upgrade the entire network to a Docsis 3.0 standard, which overseas providers have used to deliver download speeds of up to 500Mbps. It will also be more easily upgradeable to a Docsis 3.1 standard, which some vendors claim can deliver up to 1 gigabit per second.
This will require about 230 telephone exchanges to be upgraded by skilled engineers who may need to be brought into Australia from overseas. It is understood the migration of customers away from Telstra and Optus onto NBN Co systems is a risky venture that could result in substantial service cuts if improperly handled.
Arris beat fellow US tech supplier Cisco Systems to win the deal, which involves sending field teams out to exchanges to install new cable modem termination systems (CMTS) and to replace retransmission gear.
NBN Co is expected to run commercial pilot trials involving HFC customers by the end of 2015, with full-scale rollouts from March 2016 onwards. A more detailed rollout plan is expected to be released in the next two months.
Using HFC customers will give NBN Co a vital boost in fee-paying subscribers that will eventually help the company become a saleable asset for the federal government. It is expected to eventually be sold for a profit as a stand-alone division.
