NBN retailer questions need for Enterprise Ethernet in fibre areas

Monday, 25 January 2021 09:10

NBN retailer questions need for Enterprise Ethernet in fibre areas Featured

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An NBN retail service provider has questioned the need for a service like the NBN Co' Enterprise Ethernet in places where fibre connections are already available at a much lower cost.

Damian Ivereigh, the chief executive of Launceston-based Launtel, said in a blog post that while the product was good for companies that needed it, the problem he found that Enterprise Ethernet was being oversold to firms that had no need for it.

"The original NBN was to be almost all fibre – FttP. Had that FttP rollout continued I don’t believe that Enterprise Ethernet would be a product today," he said.

"Unfortunately Enterprise Ethernet’s main purpose is to make up for the deficiencies in the network that occurred due to NBN Co’s switch to the MTM (aka using all the existing copper, HFC etc that was already in the ground)."

Ivereigh pointed out that one of the first things done by the team created to push the Enterprise Ethernet product was to designate areas with the existing NBN network as a "residential grade network".

"There was some truth to this, based on the technologies that had widely been deployed," he admitted, but added: "However somehow FttP, which is most definitely a business grade product once extra service level agreements are added, was tarred with the same brush.

"Launtel had for years been selling business products over NBN Co’s FttP technology, including [being] the first in the country to offer 1000/400Mbps back in May 2017. At one point, we were heavily criticised by a member of the business team for doing this, I’m guessing because they saw it as a threat to their model."

Launtel has been one of the few RSPs able to offer gigabit connections because Tasmania was one of the first places to have the NBN rolled out and at that stage fibre was the technology used.

Ivereigh said the main difference between FttP and Enterprise Ethernet was the massive cost difference. "A typical Enterprise Ethernet product will be 5 to 10 times the price of the equivalent regular FTTP product (aka NEBS) and you will be required to sign a multi-year contract to get it."

For those who had no fibre to their area, an upgrade was possible in many areas and one only had to pay a single price for it upfront.

"Enterprise Ethernet, on the other hand, is significantly higher prices not only for the entire contract, but also once the contract is renewed," he said.

"You are also stuck with that retailer for the duration of the contract, regardless of the level of service they provide. We are currently investigating whether we can finance the technology upgrades so that it is not such a hit to a business' cash flow.

"What I find particularly frustrating is that the NBN Co has created a completely new product, with completely different service qualification systems, provisioning systems, and different billing," he said. "They need not have done this, they could have easily created the product out of the existing NEBS FttP product. However yet again, NBN Co has created yet more complexity."

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