NBN Co confirms two deals for rural satellite broadband services

6 May 2011

The National Broadband Network Company (NBN Co), the private-public partnership set up to oversee the construction and management of Australia’s National Broadband Network (NBN), has announced that Optus and IPSTAR have been selected to provide interim satellite broadband services in rural and remote areas of the country. According to ZDNet, the two deals are worth a combined total of AUD300 million (USD320.5 million).

The Interim Satellite Service is designed to replace the Australian Broadband Guarantee (ABG) programme, and it aims to smooth the transition to higher speed services of the roughly 3% of Australians living in rural and regional areas outside the fibre and wireless coverage areas of the in-deployment NBN. The AUD237.7 million ABG scheme, which currently subsidises the cost of delivering broadband in remote areas of the country, is due to end by 30 June 2011. NBN Co is expected to trial the Interim Satellite Service with two as-yet unnamed retail service providers that already offer services under the ABG programme, and the service will be made available commercially from July 2011. NBN Co is understood to be aiming to roll out services to around 300 customers per month from July to October, with that figure rising to around 1,000 customers per month after that. Looking further forward, customers will be transitioned to a 12Mbps satellite service once NBN Co launches its own satellites in 2015.

Commenting on the development communications minister Stephen Conroy noted: ‘The ABG has provided an effective safety net for Australians unable to get an adequate broadband service … However, the ABG was not designed to deliver the step change in performance required to bring forward enhanced services to rural, remote and regional Australia. The NBN Co Interim Satellite Service is the first step in bringing about this change ahead of the long-term satellite launch in 2015.’

For its part Optus has been handed AUD200 million to provide managed satellite services and satellite capacity, and it has been confirmed that Israel-based satellite broadband technology vendor Gilat has been selected by the telco to provide a SkyEdge II Very Small Aperture Terminal (VSAT) network, installation, operation and maintenance. The agreement between Gilat and Optus provides for an initial network of eleven SkyEdge II hubs and 20,000 SkyEdge II VSATs expected to be deployed within three years, while the deal also allows for a possible expansion of the infrastructure to include hubs and up to 48,000 VSATs. Gilat’s new Australian subsidiary, Gilat Satellite Networks Australia Pty Ltd., will undertake responsibility for end-to-end VSAT installation, as well as hub maintenance and operation in three geographical locations, for a period of five years. IPSTAR meanwhile has been given AUD100 million to provide some additional satellite capacity for internet services in rural and remote regions.

Australia, Gilat Telecom, NBN Co, Optus