NNN CO: Narrowband aspirant in talks with Telstra, Optus PREDICTION Wireless will compete M2 GROUP: Taps Vocus for fibre launch with wired, then converge in long term INTERNET OF THINGS: Warning on risks and pitfalls COMMUNICATIONS DAY 18 November 2015 Daily telecom news & analysis since 1994 ISSUE 5024 Wireless ISPs lash out at successive gov’t telecoms policies Successive federal governments have bungled Australia’s wireless telecommunications policy in giving free kicks to major mobile carriers while passing over other wireless players. That was the picture that emerged when BigAir chief executive Jason Ashton joined fellow wireless networking industry luminaries, Cirrus Networks founder Eric Heyde and Vertel chief execu- tive Andrew Findlay, for a panel session at CommsDay’s Unwired forum in Sydney – a rare opportunity for the three to share a stage. Findlay launched the first volley, taking aim at the federal government’s A$100 million re- gional mobile blackspots program. He argued that that the federal government’s tenders were skewed in favour of Aus- tralia’s incumbent mobile carriers and overly pre- scriptive in terms of “what a mobile service looks and feels like.” Little room was left for innovative alterna- tives, he lamented. “I look at the way these things are written and they just seem prescriptive about an outcome that they want, rather than say- ing ‘here’s the problem we’ve got what are some innovative ways to solve it’,” he said. “If you got that money from the mobile blackspots program and the (Universal Service Obligation), you’ve got the ability to do something really smart in an area where’s there’s a lack of infrastructure-based competition, which is really a problem that the NBN was conceived to solve – so why not extended to oth- er problems you’ve got like the blackspots issue?” Ashton and Heyde also said that they’d seen no opportunity to engage in the blackspot programs despite having extensive experience in regional wireless network rollouts. However, Ashton went further – fixing his aim on the NBN’s fixed wireless broadband net- work. He argued that it was a missed opportunity to introduce mobile infrastructure competition to regional areas while delivering broadband to the bush at the same time. “Put it under the remit of the NBN, cancel the fixed wireless rollout and turn it into a mo- bile rollout, make it a wholesale only network and you’ll probably get a much better out- come,” he said. “I’m not concerned about being crowded out. I just think they could have worked better with industry and perhaps taken a step back and thought about what they were building in those regions in terms of what the constituents are asking for.” Ashton pointed, between them, Cirrus, BigAir and Vertel operated an extensive fixed wireless network consisting of hundreds of sites – including some in highly remote areas. However, he said that NBN had never considered cooperating with them. “I’m sure we could have collaborated with them if there was an opportunity to do so but there hasn’t been any opportunity. We can’t combine our backhaul resources, we can’t combine our operating resources – they’re doing their own thing effectively,” he said. Ashton also argued that NBN could have used the federal government’s 700MHz spectrum – left unsold and in limbo following a controversial auction in 2013 – to establish a region- al mobile network. Heyde suggested that the problem was deep within NBN’s organisational DNA. “There was never any chance that they were going to build a network that was going to be run economically. Could it be done? Absolutely it can be done but I think you need a different culture than the one NBN has got,” Heyde said. Andrew Colley

Wired and wireless: complement to competition to convergence, but maybe not in Australia Fixed and wireless access technologies are on course to compete increasingly with each oth- er in the near future, according to iMediate Consulting principal Robert James, but then to converge in the longer term. However, James warned that structural settings in Australia, particularly around the NBN, might inhibit this otherwise natural progression – and that the increasing capacity of wireless could in turn disrupt the NBN’s own business model. In his address to the CommsDay Unwired event, James noted that wireless and wired offerings had been complementary until recently, but were now intruding on each other’s market space. He noted for exam- ple that Optus was already offering mo- bile broadband packages at A$70 per month for 50GB, at speeds of up to 12Mbps downstream/1Mbps upstream in 2300MHz coverage areas – an offering that would suit the needs of a large chunk of the fixed market at present, based on current usage patterns. And he referenced several US mobile plans aimed at high consumers of streaming video. On the other hand, he observed that there were also avenues for the fixed network (via a wireless last-mile) to encroach on some of the traditional mobile space, as with the Telstra Air Wi-Fi offering. But James also highlighted a third phase, of convergence, which he suggested might start

COMMUNICATIONS DAY 18 November 2015 Page 2 around 2030; well after the expected introduction of 5G and even the completion of the NBN rollout. “What I’m suggesting here is that instead of having two different fibre infra- structures – one for the fixed network and one for the mobile network – if you’re getting to a density of cells of maybe 15 small cells per macro cell. you actually need fibre down the same streets you’d need if you were doing fibre to the kerb or any kind of HFC deployment. My suggestion is that for companies like Verizon or BT, you’re likely to see them roll one fibre down the street, connect the premises that want a fixed connection, and put wireless on a pole for those people that don’t want a fixed connection – and those people that want a mo- bile service. And I’d characterise this as being converged.” However, James said that while this might be a natural evolution in somewhere like the US, the same might not apply in Australia “because NBN is defined around the idea that fixed networks are different to mobile, and that structural separation would be a great idea. So the sort of things that vertically integrated players around the world will do will be much harder.” James added that NBN could well find the ongoing growth in wireless capacity disruptive; though he acknowledged that a good number of premises would likely retain a fixed line, “the idea that 80% of premises will always take the NBN is definitely under threat, [as is] the idea that ARPUs will grow over time rather than decline.” “My suspicion is that the high adoption of NBN in the latest corporate plan may be chal- lenging... [and] that price competition will be higher,” he added. “Together, that would mean a significant shortfall of revenue... [while] structural separation could disrupt the natural evo- lution of the industry [to wireless and wired convergence].” “If I was the government... in the urban areas I’d try and remove all the roadblocks to spec- trum, poles, power and backhaul, and generally facilitate the move to small cell models,” he suggested. “In rural and remote areas, Australia is in a very unique situation; it costs an awful lot of money to build networks [there] and the government has frequently indicated a posi- tion of having to subsidise it. The obvious answer is to have one network and do it well; my suggestion is a shared LTE rural network that would cover the universal service obligation, public safety, fixed broadband and mobile wholesale.... arguably, many people might think that was what the NBN should have been in the first place!” Petroc Wilton

New dedicated IoT network aspirant already in talks with Telstra, Optus NNN Co, the Australian startup looking to facilitate a dedicated, collaborative narrowband network platform specifically for machine-to-machine communications, is already in talks with the country’s mobile operators – with a view to mutually beneficially co-operation. As first revealed by CommsDay the idea behind NNN Co is that existing 4G networks, while having a key role to play supporting some machine-to-machine applications, are less well -suited to efficiently serve very large numbers of low-throughput, low-power connections. And 5G might address such needs but is still years away. Instead, NNN Co has been investigating low-powered, wide-area networks using industrial, scientific and medical-band spectrum (a number of allocations, typically unlicensed, ranging from 6.76MHz up to 246GHz) which could be made available immediately and could use much cheaper cell-site tech than consum- er mobile networks. NNN Co isn’t looking to run the whole show as a single entity, but rather to enable a col-

COMMUNICATIONS DAY 18 November 2015 Page 3 laborative approach; indeed, Zagarella believes that no one person or organisation can or should own the IoT in Australia. “We partner with those who need and want to build out an IoT access network... for specific needs,” he said. “We provide access to a nationwide network of servers to ensure the high reliability, redundancy and security capabilities as required; and then we work with partners with different skills and capabilities to collect that data from a wide range of devices.” “We oriented towards... LoWAN because of its strengths in meeting the power requirements, throughput, link budget and of course the cost requirements... but also, and probably most im- portantly, how it lends itself to the collaborative business model that we’re adopting. And we also see the need for other connectivi- ty solutions in parallel with that... NNN Co and its partners offer access to other service providers with revenue sharing between the service provider, the network builder and NNN Co. That’s essen- tially the business model.” All of which begs the question of how NNN Co will interact with Australia’s major mobile network players – particularly with all of them looking seriously at the IoT as a growth area for their own businesses, and a use case for their existing network assets. “We’ve had discussions, particularly, with Optus and Telstra... it’s a matter of the willingness for those partners to bbe open, and collaborate,” Zagarella told CommsDay. “The coverage of those networks could be used together for the best benefit of the endusers, the applications and the endpoints themselves. We’d absolutely want them in there.” Petroc Wilton

M2 taps Vocus for business fibre launch M2 Group has used the fibre network of future merger partner Vocus to launch business in- ternet services in over 1100 buildings and office towers on the east coast of Australia. It joins the likes of TPG and First Path in offering superfast broadband to select CBD buildings. M2 COO Scott Carter said the service is available immediately to qualified customers who are located within on-net Vocus fibre buildings. It is M2's first service to utilise the Vocus net- work. In September M2 and Vocus announced that they had entered into a merger implementa- tion agreement under which the two companies propose to merge. The deal has already been approved by the Australian Competition and Consumer Commission – which viewed the deal as primarily a merger between two complementary businesses – and is expected to be completed by early 2016. Using M2's Commander brand, the service offers unlimited data on a 400 Mbps connec- tion and is priced at A$398 + $39.80 GST per month. Carter said the service will be support- ed by a national targeted sales and marketing campaign and sold via Commander’s existing national sales channel. “Commander is delighted to have access to such a high quality, high speed fibre network to offer services on,” he said. M2 acquired Commander in 2009. Its business offerings in- clude IP and PSTN business phone, mobile, internet, and electricity services. Geoff Long

COMMUNICATIONS DAY 18 November 2015 Page 4 5G will transform network architectures: Nokia The move to 5G will herald a new architecture for mobile networks based around virtualisa- tion, according to Nokia Networks MD for Australia and New Zealand, Ray Owen. Speaking at the CommsDay Unwired conference in Sydney, Owen said that the network of tomorrow will be programmable, with all of the network elements including base-stations, switches and transport virtualised in software. “Virtualisation is not just about virtualising the core networks or even software definable networks, it actually goes all the way down to the base station and virtualising what we have to day. So effectively most network vendors in the future will become software providers not nec- essarily hardware providers,” he explained. In the same way, he said future operators would become telco data centre providers, effec- tively transforming their networks to provide services on top of the IT infrastructure. In doing this, they will have three key areas to monetise: Connectivity; data and analytics information; and dedicated virtual subnetworks, or networks as a service. “One of the most interesting assets any operator has is actually real estate,” Owen said. “These real estate assets, we believe, will become a distributed cloud infrastructure running distributed IT platforms.” “They will be able to analyse and process data in real time across this distributed architec- ture,” he said, noting that Nokia has already started such projects with telcos, particularly in Korea and Japan. “Whilst this move is not dependent on 5G, the 'cloudification' of our networks today, we believe, enables a much smoother ride towards the 5G vision,” he told the Unwired audience. Geoff Long

Warning sounded over lack of IoT safeguards Futurist and Internet of Things-seer Skeeve Stevens has warned that laws need to be updated to keep up with the growing number of connected devices on the Internet. He told the CommsDay Unwired conference in Sydney that vendors were also rushing out devices before industry standards have been established, putting users, companies and net- works at risk in the process. “There are no standards and there is a rush to market and a rush to make money. There are no global standards for any of this,” he said, noting that everyone is writing their own soft- ware for IoT, often with no authentication or security. He cited examples such as taking con- trol of devices in hospitals or vital utilities. Or on a personal level, it could be used to take control over someone's car or devices in the home. Wireless networks could also be at risk, with hackers having the ability to launch denial of service attacks on mobile networks through the up to 10 billion devices that will be available online. “Your cell tower will be overwhelmed and it will take out your voice service with it and everything else that might be there,” said Stevens, who is the principal of consultancy Fu- tureSumo. “People like Amazon and Azure have already got IoT management platforms, but we know what happens when people get hacked and all of this information gets out. What about when we have the Azure or AWS hack and they take control of 10 billion devices? It's going to hap- pen, it's not an if,” Stevens warned. He said while the growth of IoT is accelerating, no-one is prepared for the consequences

COMMUNICATIONS DAY 18 November 2015 Page 5 while most equipment lacks basic safeguards. “It's all about getting these cool little devices out to market and not about protecting it from what it could do,” he said. “There's a lot of talk but we need laws, we need vendors to be responsible and we need it now because the land rush is coming. Look at the amount of watches and devices and every- thing that is coming. It's an issue for everyone, not just the politicians,” he suggested. Geoff Long

Australian telcos fear disruptors, misread customers: Pegasystems Australia’s leading telcos are “worried” about newcomers disrupting their market, but contin- ue to be ignorant of their customers’ needs – even though they think otherwise, according to new research by Pegasystems. The survey of 1,000 consumers and business decision makers found that 82% of telcos are “worried” about “upstarts entering their market,” including 8% of the respondents who were “extremely worried.” Somewhat confirming those fears is the finding that as much as a third of the respondents was planning to switch to “new innovative providers in the future.” Further exacerbating the problem was the fact that telcos often overrated themselves when it came to their quality of customer care. According to the survey, 94% of the broadband pro- viders rated their own customer as “good” or “very good,” compared to only 65% of the actu- al customers that opined along the same lines. Likewise, while only 6% of telcos categorised their customer service as “average” – none for poor, 21% of the customers though the cus- tomer service of their telcos were “average”, while another 14% rated it “poor” or “very poor.” “This disconnect is a concern for the industry, as more than two-thirds of consumers said customer service was an important or top factor when considering to switch providers,” Pega- systems said. At the same time, Australian telcos were largely ignorant of what their customers want. While 82% of respondents in the industry said they “know and understand their customers’ individual needs extremely well,” only 18% of consumers agreed to the statement. According to the survey, 42% of consumers said their provider knows and understands them only to some extent, and 22% said they expect their provider to know them better. More worrying, 18% also said their supplier does not understand them, as an individual, at all, Pegasystems said. “This research shows that much work still needs to be done in the Australian telecommu- nications sector to improve the overall customer experience,” said Pegasystems MD for Aus- tralia and New Zealand Scott Leader. “It’s crucial that providers in the broadband space, espe- cially those that are more established, realise that consumers are no longer brand loyal. They are now loyal to convenient, customised service – and are willing to go with whoever can give this to them. Tony Chan

Cisco: connectivity revenue of IoT to vanish Cisco ANZ CTO Kevin Bloch has told the inaugural CommsDay Unwired conference in Syd- ney that revenues for service providers arising from the connectivity piece of the emerging In- ternet of Things will dwindle going forward, and eventually disappear altogether. Bloch said that the key opportunities for service providers around the Internet of Every-

COMMUNICATIONS DAY 18 November 2015 Page 6 thing – Cisco’s term for the IoT – would force a brand new paradigm to be adopted. While the revenue stream for service providers associated with the connectivity piece alone would radically diminish in the near term, he noted some key new opportunities – but argued that these would necessitate a transformative change in the way engineers designed the requi- site services. He cited a recent Verizon report that predicted that connectivity in the near term would yield just 5% in IoT-related revenue. “Within a decade it is quite possible that revenue from connectivity to IoT will be zero,” added Bloch. He warned that over the next two or three decades, the traditional carriage ser- vices “especially for ‘things’ that may cost less than a cent will be difficult to charge for.” However, Bloch noted that there was a huge opportunity that the industry was not even touching the surface of to some degree – requiring a shift of focus from infrastructure to data and information, to enable a new level of machine analytics in an environment of tens of bil- lions of connected things.. “As we start to instrument the world, it’s about the data,” he add- ed. “We’re looking at the instrumentation of everything; as long as we can get a little bit of power, we can connect it [and] start measuring stuff.” “The value is in the data, it’s in the applications… it’s what you do with it,” said Bloch. To make possible the analysis of expanding reams of data driven by the IoT, Cisco is look- ing a paradigm dubbed ‘fog computing’. The idea is to take advantage of plummeting costs in network tech, CPU and storage technology to do more of the analytics work at the edge closer to the data and then simply move the results where needed, rather than moving all of the raw data back into the cloud for analysis and then back again. He predicted a transformation of the architecture of IT, driven by plummeting costs in net- working technologies, in CPU technologies and in storage technologies “in a way that really has now made this concept called fog computing possible.” “You don’t need to disturb the cloud and waste bandwidth,” added Bloch, noting that there were also a lot of scenarios “where you simply do not need to and won’t be able to take the data to the cloud.” “We’re inserting a new layer called fog into the network architecture. “This is really where we are taking the query to the data.” Richard van der Draay

Virtual reality revolution is here, will smash networks: VR The World VR The World director Shanti Korporaal has outlined a massive hit to networks as a result from a predicted dramatic uptake of virtual reality services. “The revolution is here,” Korporaal told CommsDay’s Unwired conference in Sydney. She noted that the trend would impact net- works significantly. She added that mobile networks in particular would be enormously impacted by the associated rising demand for data. “The data [needs are] going to be massive,” said Korporaal. “We’ve already had a Netflix effect, now we’ll have the VR effect.” “We are talking about large files of data, gigs of data straight to your phone via a wireless connection,” added Korporaal. “We’re going to see some massive contention... we’ve got struggling speeds

COMMUNICATIONS DAY 18 November 2015 Page 7 already and with mobile and Wi-Fi networks the way they are we’re going to see some large contention for these kinds of services.” Korporaal noted that 2016 would likely see the first major VR movie, and added that next year would also see an increased number of live streamed events, such as the US federal elec- tion and assorted music concerts, news and sports events. Other uses of VR predicted included medical and gaming. “Education will be massive,” said Korporaal, adding that experiences would be the big thing for most people. Korporaal noted that there existed a large volume of VR content already but warned that usage of the technology would very soon include a whole new range of applications. These included VR surgery, gaming and an entertainment. In addition, Korporaal said that tourism industry would be able to sell a high end product “very quickly simply by putting on a head- set.” Richard van der Draay

Vodafone Aus: Voice over Wi-Fi launch in 2016 Commercial voice over Wi-Fi is gathering momentum with Vodafone Australia revealing it expects to launch its own offering next year. CTO Benoit Hanssen had previously indicated the carrier would be working on the tech- nology after Christmas and Vodafone Australia technology GM Easwaren Siva speaking at CommsDay’s Unwired conference, has now said the launch will be sometime in 2016. The move could make the carrier the second major Australian mobile operator to offer the service. Optus launched its Wi-Fi calling app called ‘Wi-Fi Talk’ last August. Telstra has also indi- cated that it has a voice over Wi-Fi offering in the pipeline but has yet to provide a firm time frame for its availability. Siva said Vodafone’s offering would be “very similar” to Optus’. “It’s personalised coverage on a private Wi-Fi network so it just opens and enhances one’s experience for voice service,” he said. The Wi-Fi Talk app allows Optus mobile subscribers to use Wi-Fi networks to make calls and send text messages when in areas with poor mobile reception or blackspots. Unlike the plethora of other smartphone messaging apps that can be used for free app-to- app voice calls and messages such as Facebook, Viber and WhatsApp, Wi-Fi Talk interoper- ates with numbers on public switched telephone and mobile networks. However, Wi-Fi Talk texts and calls also attract a fee, which has led to perceptions that the carrier is trying to get a free ride on its customer’s private Wi-Fi networks. Optus network strategy director Stuart MacIntyre, who was sharing a mobile panel session with Siva, said that the carrier was happy with Wi-Fi Talk’s progress. “We see voice over Wi-Fi as complimentary to our services. We’re pleased with the engage- ment with it as customers begin to learn how it can help. We’re looking at bringing forward the embedded version over time,” MacIntyre said. The Android version of Optus’ Wi-Fi talk application has been downloaded by around 10,000 of its 9.3 million mobile subscribers since its launch in August. Apple’s iTunes store does not indicate how many times Optus iPhone owners have downloaded the app. Andrew Colley

COMMUNICATIONS DAY 18 November 2015 Page 8 Infinera and Corsa demo on-demand 100G capability Infinera and Corsa Technolgoy have demonstrated a proof-of-concept solution that applies software-defined networking capabilities onto 100G packet services. The demonstration at the Supercomputing ’15 event shows the feasibility of delivering high-bandwidth 100G services to support high performance computing and advanced re- search & education applications. The demonstration showcased “dynamic multilayer provi- sioning, precision switching and terabit traffic management over a converged packet-optical transport network,” the companies said. The demonstration was conducted using Corsa’s 100G DP6400 switching platform and Infinera’s Cloud Xpress metro optical transport platform with SDN controls. The solution was able to show 100G line-rate traffic management with quality of service support; support for MEF standard E-LINE services such as Ethernet Private Line and Ethernet Virtual Private Line; 100GE optical transport; and dynamic multilayer provisioning on both packet and opti- cal transport layers using an OpenDaylight framework. “The combination of Corsa’s OpenFlow-controlled precision switching and Infinera’s Cloud Xpress and SDN control illustrates what HPC users and R&E network operators want: massively scalable, on-demand layer two services with traffic management and service guaran- tees,” said Infinera SVP, cloud network strategy and technology Stu Elby. Tony Chan

Brocade builds 100G trans-Pac network for Pacific Wave Brocade has been selected by the Corporation for Education Network Initiatives in California to deliver “the world’s first 100Gbps research and education network linking Asia and the US. The network will form part of a Pacific Wave, a joint project between CENIC and Pacific Northwest Gigapop – an international internet exchange facility for R&E networks, including universities in California and some 200 research institutes across the US. Brocade’s MLXe core router will be deployed in core points of presence for Pacific Wave, including Sunnyvale, Seattle, Los Angeles, Chicago, and Tokyo, Japan. All the PoPs will run 100Gbps connectiosn. “In turn, these points of presence will provide connections between the Pacific Wave net- work and entities such Internet2, the United States Department of Energy’s ESNet, the Unit- ed States National Oceanic and Atmospheric Administration’s N-wave, and commercial cloud providers regularly used by national and international R&E communities,” Brocade said. The network will support R&D efforts in the areas of big data, 8K and 4K video, 3D video distribution, real-time interactive instrument control, virtual reality, and telepresence applica- tions, Brocade added. Tony Chan

Nokia dives into datacentres with OCP membership Nokia Networks has joined the Open Compute Project as a Gold member to promote its Air- Frame Datacentre Solution. As part of its membership, Nokia is committing to developing an OCP variant of the AirFrame platform, the company said. AirFrame, launched in June 2015, offers operators a virtualised compute infrastructure that is both distributed and centralised within a telco’s operator environment.

COMMUNICATIONS DAY 18 November 2015 Page 9 By leveraging a new compute architectures that feature “intelligent network interface cards, acceleration cards and system-on-a-chip” designs, AirFrame allows telcos to offload the main processor, as well as telco-specific technology such as radio baseband acceleration into a cloud infrastructure spread across their network. On one level, AirFrame allows operators to host core services such as evolved packet core and voice-over-LTE services in centralised cloud loca- tions. On a more distributed level, AirFrame allows operators to distribute compute capabili- ties to the edge of their network for network functions virtualisation deployments. Tony Chan

ERICSSON PROMOTES SOFTWARE IN 5-YEAR OOREDOO DEAL The Ooredoo Group and Ericsson have signed a 5-year framework agreement for the delivery of radio, core and transmission solutions across 2G, 3G and 4G technologies as well as relat- ed implementation and integration services. The deal will also focus on Ericsson’s so-called “Software model,” which consists of “predefined software” packages that speed up service cre- ation and roll out.

MACQUARIE TELECOM BOOSTS CLOUD OFFERING WITH VMWARE TECH Macquarie Telecom is promising its Australian clients more flexible and easily deployable cer- tified secure cloud services, under the terms of a new collaboration with VMWare. The telco will combine VMWare’s virtual machine usability with its own investment in accredited, se- cure infrastructure. In particular, Macquarie noted that government agencies using VMWare virtualisation tools would be able to “seamlessly move data between the private cloud and Macquarie’s certified secure public cloud.”

SPARK AIMING TO RAISE NZ$100M IN BOND MARKET Spark Finance, the borrowing arm of carrier Spark New Zealand, is considering making an offer of up to NZ$100 million in unsecured, unsubordinated fixed rate bonds to institutional and New Zealand retail investors, with the ability to accept up to NZ$50 million oversubscrip- tions. The bonds are expected to have a term of approximately seven years and to mature in March 2023. Full details of the offer will be released in the week beginning 30 November 2015, when the offer is expected to open. The company has appointed ANZ Bank New Zea- land and Commonwealth Bank of Australia as joint lead managers and Deutsche Craigs as co ‐manager.

ON THIS DAY 10 YEARS AGO: FROM THE COMMSDAY 2005 ARCHIVES Telstra’s executive management unveiled a sweeping five year plan that aims to freeze the company’s costs and employ new management and marketing techniques to leverage the breadth of its scale and customer base… Telstra was aiming to become a “single integrated fac- tory” after COO Greg Winn admitted that the firm’s infrastructure was lagging its strengths in people, capability and reach, saying said Telstra would spend A$10b on its fixed and wire- less next-generation network over 5 years and another A$1b on IT systems.

COMMUNICATIONS DAY 18 November 2015 Page 10