Cable Modems Almost Here
The Age
Tuesday January 23, 1996
Cable will solve the bandwidth problem for online communications and sooner than we think. Lisa Mitchell reports on the coming revolution.
A STOUNDING predictions on the growth of online services in Australia are contained in a report by the Melbourne-based research firm Cutler and Company. They forecast acceptance far beyond the expectations of local carriers and ``even the most savvy commentators".
Roger Buckeridge and Terry Cutler, authors of the report, The Online Economy, say that by 1997 two million Australians could be online from their home PCs. Many will use cable modems for lightning-fast delivery of information services via the new broadband (hybrid fibre/coaxial) cable networks now being laid by Optus and Telstra.
By 1999, they say, two million cable modems will be operating and a total of four million Australian households could be online.
The report coincides with an announcement by Australian modem manufacturer, Netcomm, that, teamed with ADC Telecommunications, they will have cable modems on the market, priced between $399 and $599, by June of this year.
Chris Howells, Netcomm's chief executive officer, said the first offerings will run at 64Kbps, 128Kbps or 512Kbps. An 8Mbps version is due after September, followed by high speed 27Mbps and 45Mbps cable modems by year's end.
The report's estimate of cable modem useage here puts Australia well ahead of expectations for the United States where, according to the reputable US company, Forrester Research, about two million modems will be in operation by 1998.
Cable modems will deliver interactive multimedia services over the new networks about 1000 times faster than today's 28.8 Kilobit per second modems on the telephone lines. The top transfer speed of the cable networks today is estimated at 27Mbits per second compared to 2Mbits per second for a premium ISDN connection.
``We think that both OptusVision and Telstra Multimedia have underestimated the revenue opportunity that is available to them from computer/cable modem access and the investments that they will be able to make in services and content designed for this broadband online access environment," the Cutler authors say.
Contrary to carrier expectations, pay TV or basic information retrieval by Internet users will not be the main force driving adoption of cable services, the authors say. The demand for e-mail with multimedia attachments and capacity for the SOHO market to transfer voice and image files over cable could contribute as great a profit as pay TV by 1998.
Telstra and Optus, the report says, should plan for about 40 per cent of homes to take advantage of cable network access rather than just five per cent if they ``overbuild" their infrastructures to offer equal cable services in most demographic areas. This level of competition would ensure tempting tariffs for cable connectivity through integrated service bundles (Pay TV, telephoney and PC cable modem access) and switchover packages.
According to Roger Buckeridge, those who think the dual cable rollout is ``wasteful" are ``completely missing the point."
``You have to encourage overbuild between the two networks . . . The second carrier must have its own local loop, there is no way they can resell Telstra's infrastructure and continue to innovate."
Delivery of online services today is based on narrowband technologies such as the Telstra's telephone network, the Austpac packet data network and the cellular mobile telephone networks of Telstra, Optus and Vodafone. None of these has the capacity to support the kind of traffic that Internet power users might demand over the coming year, the report says.
ISDN, touted as the best existing technology for fast Internet information transfer, is still overpriced for the average consumer. Cutler predicts that once cable modems arrive which local modem manufacturer Netcomm says will be from June 1996 Telstra will have to drop ISDN rates or lose marketshare.
Unlike the US market, where (coaxial) cable companies must compete against the telecommunciations companies' ISDN offerings, Australia's two carriers will be able to offer a single package of cable and telephony services. In Australia, Buckeridge says, ISDN offerings will only be viable as a ``filler" service where cable is not available.
Telstra believes that while cable transmission will be far cheaper than ISDN, some users will opt to pay the premium for dedicated ISDN bandwidth in lieu of shared cable services.
By November last year, Telstra had passed more than 800, 000 homes with hybrid coaxial/fibre cable, Of these more than 250,000 were in Victoria. Telstra plans to complete its roll out by mid 1999, having spent about $4 billion and passed four million homes.
Neither Optus nor Telstra will say when they will open services.
Optus has promised local telephone capability by mid 1996 in parts of Melbourne, Sydney and Brisbane. It will offer Internet services, requiring cable modems, by July 1997.
© 1996 The Age
Share This