Cd170222-Murata-Arti

Thu March 16 2017 April 10/11 2017 May 2/3 2017 Westin, Sydney Westin, Sydney Four Seasons, Sydney

NNNCO: Teams with Japanese manufacturer on IoT devices KACIFIC Satellite firm scours SECURITY: Inputs sought on critical infrastructure policy Australia for new MEGAPORT: Says APAC, European businesses now in profit teleport locations COMMUNICATIONS DAY

22 February 2017 Telecoms news you can use. Est.1994 ISSUE 5314 David Epstein: why he’s leaving Optus, and his parting words for industry Optus corporate and regulatory affairs VP David Epstein, one of the most prominent figures in the telecoms public policy space, is to depart the firm after five years with his last day in the office this Friday. In parting, he has urged government and both industry regulators to form a “more cohesive view of the competition environment” once the greater part of the NBN rollout has finished. Epstein’s recruitment in early 2012 was something of a coup for Optus; he had previously been chief of staff in Kev- in Rudd’s prime ministerial office, group head of public affairs at BHP Billiton, and group executive for government and corporate affairs at Qantas. In the ensuing half-decade he has become a highly recognisable mainstay of debate in almost every aspect of telecoms policy and regulation. Ep- stein told CommsDay that he’d informed Optus CEO Allen Lew of his decision late last year, but had decided to bring his departure forward. “I’ve been here for five years, I’ve seen a fair bit of change and I think I’ve been able to contribute to some big changes. But I’ve always wanted to do some new things in my career and look for new challenges,” he said. “I’ve closed off some big projects… it’s a good juncture, before something new lands on the plate, to extract myself in the least disruptive way!” “[I’m] very proud of the fact I was able to secure regulatory approval for the original Optus-NBN HFC agreement, and its subsequent restructuring; achieved trouble-free delisting of the Singtel Group in Australia while maintaining Australian interests, that I was able to restructure a lot of our intercarrier arrangements in ways that made them more sustainable financially for the company going forwards… and set up the process for the [remaining] 700MHz spectrum auction,” added Epstein. “I’ve certainly sought

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Category sponsor 12 JUDGES: The Edison judging panel * ACCAN CEO Teresa Corbin * ASTRA CEO Andrew Maiden * CommsDay group editorial director Petroc Wilton * CommsDay senior editor Geoff Long * Coutts Communications principal Professor Reg Coutts * Decisive Publishing director and CommsDay founder Grahame Lynch * Eintellego Networks founder Skeeve Stevens * HKBN CTO and former NBN Co CTO Gary McLaren * IIC president and former ACMA chair Chris Chapman * Market Clarity principal Shara Evans * New Street Research senior telecommunications analyst Ian Martin * Telsyte managing director Foad Fadaghi

The Edison awards inalists * Best telecom marketing initiative: Cisco, Huawei, Telstra * Best telecom law irm: Bird & Bird, Clayton Utz, King & Wood Mallesons, Maddocks * Best mobile device: To be announced on the night * Best cloud provider: BigAir, Cisco, Telstra * Best telecom core network vendor: Ericsson, Nokia * Best telecom software or support system vendor: Cisco, ECConnect * Best data centre operator: Equinix, Metronode, NextDC * Best voice and hosted PBX provider: Aussie Broadband, MNF, Symbio, Vocus * Best ixed wireless operator: BigAir, NBN, Optus, Vertel * Best virtual network operator: Amaysim, Foxtel, NextDC, Southern Phone Company, Symbio * Best streaming video on demand provider: Foxtel, Optus * Best IoT/M2M company: Challenge Networks, Cisco, NNNCo, Huawei, Telstra, Vodafone * Best satellite company: To be announced on the night * Best broadband provider/ISP: Aussie Broadband, Foxtel, Optus, Telstra , iiNet, Internode, TPG * Best mobile operator: Optus, Telstra, Vodafone * CommsDay Hall of Fame: To be announced on the night

BOOK A SEAT AND TABLE: https://edisons2017.eventbrite.com to make Optus a more constructive and independent participant in public affairs and regulatory debates, which I thought was a shift that had to be made, reflecting its status as one of the two fully integrated full-service carriers in the country. I’ve always taken the view that Optus’ great success is that it’s become a major carrier quite rapidly in in- ternational terms, and therefore felt its public voice should reflect that.” Epstein said his next move would “more than likely” be outside telco. “I’ve worked in telco twice in my career and I’ve enjoyed it both times, but I’ve also worked in a lot of other places,” he added. “And I believe I can contribute with commercial and government expertise – and increasingly, I feel I’m at the stage of my life where I can af- ford to contribute back to the wider community.” He will, however, retain links to the sector through his seat on the Telecommunica- tions Industry Ombudsman board – as an industry representative, not tied to telecoms or a particular company – and his chairmanship of the new Smart City Taskforce for the Committee for Sydney. “That’s a real opportunity bring together the industry, the transport sector, health and education to ensure the sorts of services they offer are better integrated into the fabric of Sydney,” he said. In parting, Epstein highlighted some future challenges for the industry, and for Op- tus itself. “I don’t think there’ll be any argument that the ongoing rollout of the NBN, and the continual challenge of ensuring that the NBN is both financially viable in its own right and capable of providing a community service at a cost the market can bear, are the biggest things on the horizon for the telco sector,” he said. “Optus has em- barked on a major mobile network investment, while – along with other carriers – grap- pling with the challenges of an NBN environment. And it challenge will be to build on that in a continually competitive environment.” “There’s also some unfinished business as far as the policy and regulatory environment goes – the government has before it an ACMA review and the need to make some appointments, and going forwards both the government and both the major regulators are going to have to put together a more cohesive view of the competition environment once the bulk of the NBN rollout has been completed.” In an internal email to Optus staff sighted by CommsDay, Lew thanked Epstein and hailed his “significant contribution” over the last five years. Andrew Sheridan will act as corporate and regulatory affairs VP and join the Optus executive team while the company finalises recruitment for a permanent replacement. Petroc Wilton

Kacific Satellite scouting for teleport locations in Australia Broadband satellite operator Kacific is looking at locations in Australia to locate ground infrastructure for its proposed high-throughput satellite platform following an order for its first satellite with manufacturer Boeing. Kacific already utilises teleport fa- cilities in Queensland for its current interim service and CEO Christian Patouraux told CommsDay that Australia was also a likely location for a teleport for its new ser-

COMMUNICATIONS DAY 22 FEBRUARY 2017 Page 2 vice, which is due to launch in 2019. Patouraux said the order for the Kacific-1 satellite, based on Boeing's 702 satellite platform, was a “fantastic milestone” that had been three-and-a-half years in the making. The satellite will be shared with Japan's JSAT under a so-called “condominium satellite” model, where the manufacturer sells portions of the satellite to different operators. Patouraux described it as a “sophisticated deal” that will lead to a more cost- effective satellite with less financial exposure for the company. The deal follows a financing round to raise US$147 million late last year. The financing was a mix of equity, debt and customer prepayments that covers the purchase of the satellite, launch service, ground systems and all other project costs. Patouraux said that to secure the funding, Kacific had signed 15 managed bandwidth wholesale agreements in 14 different countries for a total value of US$434 million. Kacific-1 is designed to deliver uncontended broadband throughput via 57 Ka-band narrow beams, each having a capacity up to 1.25Gbps. The beams can be selectively tailored to cover precise pockets of demand in a geographically dispersed footprint of 20 Pa- cific and Southeast Asian nations. The CEO said that strategic positioning of the beams had ena- bled Kacific to sell capacity in 51 out of 57 beams so far, through take-or-pay contracts, with most beams exceeding 70% firm capacity bookings and several being almost saturated. Kacific is aiming to be a pure-play broadband provider, selling capacity directly to service provider customers for direct-to-premise access. It expects to offer price points that can boost internet usage in under-served areas. “With the launch of Kacific-1, in 2019, people in areas currently lacking affordable high speed internet will be able to access online education, healthcare and public services, and grow their local economies. Delivering internet speeds over 100 Mbps on low cost, small form factor terminals will help connect the dots of Southeast Asia and the Pacific to the digital world,” he said. Ahead of the launch of its own satellite, the Singapore-headquartered Kacific has rolled out an interim service based on capacity derived from a patchwork of different satellite operators. It is currently providing access to a number of Pacific Island nations, most recently to East Timor. Eventually with the launch of Kacific-1 the company is targeting every country in the Pacific region, including New Zealand, as well as some Southeast Asian nations such as the Philippines. Patouraux also told CommsDay that he was confident of financing a second or even third satellite, with business development work already starting with key potential customers. Any future satellite will target adjacent markets to those served by Kacific-1, he said. Geoff Long

COMMUNICATIONS DAY 22 FEBRUARY 2017 Page 3 NNNCo teams with Murata to deploy production-ready IoT devices Low power wide area network operator National Narrowband Network Co has announced the deployment of Internet of Things devices for commercial production, with NNNCo’s software stack integrated into low-cost compact modules from electron- ic component manufacturer Murata. Headquartered in Kyoto, Murata launched its LPWAN wireless module last Septem- ber; NNNCo said it had actually been working closely with the Japanese firm since that time to integrate the module design with its own Smart Device Software stack. The combination was first deployed as part of a trial program with Ergon Energy in Queens- land, but NNNCo and Murata kept their collaboration relatively quiet at the time; now, they’re going into full production mode. The SDS stack includes NNNCo’s own granular multicast technology – which allows for the sending of packets to groups of sensors at a time without compromising security, key for scaling up large networks – combined with what the firm describes as an effi- cient but powerful protocol. It has been designed to be applicable to a range of vertical markets and countries via the use of published application programming interfaces. The LPWAN operator has developed three separate devices incorporating the stack and module combo: the demand response enabling deice used in the Ergon Energy tri- Monday, April 10 and Tuesday, April 11, 2017 Westin Hotel, Sydney Delegate registration inclusive of two buffet lunches

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al, a smart streetlight controller, and a multi-purpose device which accepts multiple types of sensor inputs and sends data using LoRaWAN technology. But that’s just the beginning. “The starting point was first making sure we had something that worked and was a product… [and] implementing it in devices we’d designed and made,” Zagarella told CommsDay. “Now we’re at the start of the next step, which has really been driven by Murata [which has said] ‘we’ve got a lot of other customers and markets that are going to need software to run in these modules in a robust way’. So we’re now exploring how we access those markets with Murata.” Indeed, Zagarella said the partnership would open up a range of new potential markets both in Australia and overseas, given Murata’s mature global distribution channels – and would play a part in growing the IoT itself worldwide. “In each vertical market there are specific… types of sensors that are very integral to that market. We can now source the companies that import, manufacture or design those types of sensors, and we can integrate LoRa communications tech into these sensors in a very robust, cheap way, through the module and the software we’ve developed,” he said. “Two of the key barriers [to IoT adoption] are low-cost endpoint devices and communications, and the low-cost management and operation of those devices. And this is how we’re starting to break down those barriers –with these types of partnerships.” Petroc Wilton

Federal gov’t seeks industry input on critical infrastructure risks The federal government has released a discussion paper in its latest move to strengthen critical infrastructure. The paper is calling for industry views on managing security risks for high-risk sectors, including telecommunications. The main focus of the paper is the new Critical Infrastructure Centre, which is located in the Attorney General's Department and was launched last month. The centre brings together expertise and capability from across government into a single location to better manage security risks to critical infrastructure. According to the paper, recent analysis indicates risks are highest in the telecommunications, electricity, and water sectors as well as the ports sub-sector. It also noted that the Telecommunications Sector Security Reforms had been introduced into Parliament last year to manage risks, while the Centre would be the main agency to support these reforms. As well as supporting TSSR adoption, the Critical Infrastructure Centre will develop national security risk assessments and advice, coordinated across government, to better support decision-making on investment transactions. It will also provide greater certain- ty and clarity to investors and industry on the types of assets that will attract national security scrutiny. Submissions on the discussion paper, which is available on the Attorney General's Department web site, close on 21 March 2017. Geoff Long

COMMUNICATIONS DAY 22 FEBRUARY 2017 Page 5 Megaport losses deepen, but says APAC, Europe profitable after direct network costs Elastic interconnection pioneer Megaport has declared more than a fourfold year-on- year increase in revenue in its fiscal first half results, but its net loss position has deep- ened thanks to growing network, employee and other costs related to its rapid global expansion. However. the firm says that its APAC and European businesses are now generating a profit after direct network costs and has also noted strong growth in total services, monthly recurring revenue, and average revenue per port. Revenue was up some 345%, from A$1 million for the half ended December 2015 to A$4.46 million for the December 2016 half. However, direct network costs – data- centre power and space, physical cross connect, bandwidth and dark fibre and the like – also surged from A$1.15 million to A$5.29 million. With employee costs, deprecia- tion and amortisation, and professional fees also increasing, net loss went from A$9.94 million to A$13.77 million. Much of that cost, though, stemmed from the firm’s rapid expansion in the APAC, US and European markets. On the other side of the ledger, APAC contributed 42% of all revenue for the half while Europe contributed 53%, and the company said that both businesses were actually positive in terms of revenue less direct network costs. Megaport made clear that its second-half focus would be on “significant revenue growth with pru- dent cost management” to slow down its cash burn. “Our valued partners, and the channels they enable, bring to bear significant sales and marketing resources focused on selling Megaport’s services around the globe. This increases our addressable market vastly more than if we were to tackle this through direct sales alone,” commented COO Vincent English, who will replace Denver Maddux as CEO shortly. “The investments we’ve made in our brand, our service, and demand generation programs have created great momentum for our continued expansion and have accelerated customer adoption of Megaport services. Our current cash position, increased customer traction, and operational foundation put Megaport in an excellent position to execute on our strategy.” As at 31 December 2016, Megaport claimed 1,479 ports in operation up from 504 a year previously; 2,768 total services, up from 940; and average revenue per port of A$615, up A$197 or 47%. Petroc Wilton

Service SA rolls out hosted telephony for government agencies Service SA, the organisation that provides services for South Australian government agencies, has begun rolling out a new hosted telephony and workforce management system. Service SA will work with technology partners Optus and UK-based contact centre provider QPC on the rollout.

COMMUNICATIONS DAY 22 FEBRUARY 2017 Page 6 The new Genesys-based platform will serve the agency's 20 customer service shop- fronts as well as its central contact centre. It will offer functionality for IP PBX, automatic call distribution, interactive voice response, unified messaging, desktop faxing, softphone, supervisory monitoring, presence management, multi-channel recording, blended dialling, integrated call recording and quality management. Service SA manager of customer service delivery Kevin Kelly said the organisation's IT team had spent more than a year reviewing technology options before deciding to deploy the hosted PureConnect platform. “We have a distributed working model in place where we have contact centre agents located in a number of customer service centres across the state,” Kelly said. “We therefore needed a hosted infrastructure that could support our telephony needs as well as provide an automated rostering capability that could improve staff efficiency.” Kelly said the next phase of the project involves the deployment of the workforce management and automatic rostering capabilities within the PureConnect platform. This is expected to be operational by May 2017. Geoff Long

More than 200k VR units sold in Australia in 2016, 70% mobile: Telsyte Market researcher Telsyte has put the number of virtual reality units sold in Australia at more than 200,000 for 2016, signifying a strong start to the burgeoning segment. Ac- cording to a Telsyte survey of Australians consumers aged 16 and over, 216,000 VR units were sold across the country last year – with mobile VR accounting for about 70% of the sales. Sony’s PlayStation VR was a key driver for the segment, generating nearly half of all device revenue – though console-based VR will likely have less impact on bandwidth requirements than mobile. That said, Telsyte noted that many users actually said they enjoyed playing online games with friends, which means they will be streaming never- theless. Nearly half of all Australian households currently have a game console, making it fertile ground for early adopters, the research firm added. Overall, the survey found that nearly half of Australian users interested in VR want it for games, movies or entertainment. By 2021, that interest is expected to drive VR penetration in Australia to 25.5% of households, with VR devices expected to connect to a range of hosts, including smartphones, game consoles and personal computers, Telsyte continued. Tony Chan

COMMUNICATIONS DAY 22 FEBRUARY 2017 Page 7 NTT DOCOMO and NEC massive MIMO system delivers 8x capacity gain NTT DOCOMO and NEC have published the results of massive multiple input multiple output antenna system trials, showing spectral efficiency gains was “reliably main- tained” at a level roughly 8x higher than existing LTE systems running 2 spatial multi- plexing. The trials were conducted in central Tokyo and Kanagawa Prefecture and deployed NEC’s massive MIMO and massive element active antenna system operating on the ‘low-SHF band’, or the frequencies between 3GHz to 6GHz. “NEC research into core technologies for 5G, including the massive-element AAS and antenna beam control, will contribute to the successful roll-out of 5G in the near future. Among the high frequency bands, we are working especially hard to put the low- SHF band into practical use, since it is expected to enter into commercial use around 2020,” said NEC GM, mobile radio access network division, Nozomu Watanabe. “We will capitalise on the results of these trials as we continue to work together with NTT DOCOMO and other communication carriers, aiming at the practical application of 5G.” According to the firms, NEC’s AAS system, which adopted full-digitised antenna beam control technology, was able to improve the precision of beam forming. In addi- tion to directing beams to each users, the system also forms beams that counteract in- terfering signals using multiple paths, as well as combining multiple beams to boost performance. “Thanks to NEC’s contribution on the massive-element AAS supporting the low- SHF band, we were able to achieve highly successful outcomes from the trials,” said NTT DOCOMO 5G Laboratory MD Takehiro Nakamura. “We expect NEC to continue pursuing high-speed, large-capacity communication using the low-SFH band and contributing to our commercialisation of 5G.” Tony Chan

Ericsson wins app-specific optimisation deal in China Ericsson has entered a three-way partnership aimed at optimising customer experience for a single application on an operator’s network. According to Ericsson, the partnership with Chinese online and video streaming app iQIYI and China Unicom will optimise the performance of the app on Unicom’s network. The project will be delivered by the Ericsson App Experience Optimisation solution, which has also worked previously with Facebook and WeChat, Ericsson said. As part of the latest project, Ericsson and iQIYI will provide “a testing and optimisation methodology aimed at continually boosting network performance” for iQIYI’s esti- mated 470 million accounts.

COMMUNICATIONS DAY 22 FEBRUARY 2017 Page 8 “Ericsson and iQIYI are testing user interactions triggered from iQIYI accounts, which are then measured on different mobile devices in central Beijing,” Ericsson said. “The results will provide insight on how to optimise China Unicom's network and serv- ers, as well as in the iQIYI app. Soon, iQIYI users on China Unicom networks will have connectivity optimised for their needs, which will result in increased on-app time and user engagement.” Tony Chan

BT LINKS UP WORLD’S FIVE BIGGEST FOREX MARKETS BT said it has linked up the world’s five biggest main foreign exchange markets with its BT Redianz FX express platform. The new infrastructure now offers dedicated high- speed links between the UK, US, Singapore, Japan and Hong Kong, which combined host almost 77% of the world’s FX trading.

EUROPE ENTERS 'FIBRE AGE,' DRIVEN BY COMPETITIVE CARRIERS AND MSOS: IDATE At least four European markets have now achieved fibre-to-the-home/building coverage of over 90%, signifying that Europe has entered the “fibre age,” according to new data from market researchers iDate. At the end of September, there were 44.3 million FTTH/B subscribers and more than 148 million homes passed with the technology across the region, representing a 23% and 17% growth rate since the beginning of the year, said iDate head of practice Roland Montagne.

CLARIFICATION RE VETRTIV In our story about Vertiv yesterday, we cited the firm’s ANZ service and product management director by his last name only. His full name is Ross Hammond.

ON THIS DAY 10 YEARS AGO: FROM THE COMMSDAY 2007 ARCHIVES A group of agitated service providers including Internode and Clear Networks failed in a bid to influence the fast-tracked Broadband Guarantee subsidy program, and began trying to enlist both government and opposition help to highlight the deficiencies of the scheme… Perth based carrier Westnet severed its ADSL2+ wholesale relationship with PowerTel in favour of an exclusive arrangement with Optus… the Australian Com- puter Society publicly urged the federal government to implement world-class broadband infrastructure for all Australians as an immediate national priority.

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