NBN Co confirms Optus, IPSTAR satellite contracts

Updated: Wholesaler to offer 6Mbps bandwidth on interim services from November

National Broadband Network (NBN) wholesaler NBN Co has awarded satellite operators Optus and IPSTAR contracts worth a total $300 million for managed satellite services to three per cent of Australian premises, confirming industry speculation surrounding the service.

Australia’s second largest telco was rumoured to have signed an agreement last week to become primary contractor for satellite services under the NBN until 2015.

Computerworld Australia also revealed this week that IPSTAR would provide additional satellite capacity to the services, boosting the capacity required to deliver speeds of up to six megabits per second (Mbps) downlink and 1Mbps uplink under interim arrangements.

After approximately six months of negotiation, Optus was awarded a $200 million contract for the services over five years, while IPSTAR’s services were valued at $100 million over the same period, with an option to extend.

From 1 July this year, the service will replace the $325 million Australian Broadband Guarantee (ABG) established by the Federal Government in 2007 to subsidise installation and operation of sub-standard internet services to regional and rural Australia.

NBN Co noted retail service providers would determine their own end-user pricing under the interim scheme, though a spokesperson for the wholesaler was unable to clarify whether NBN Co would help to continue subsidisation of these services.

The services are only temporary, however, and are expected to be replaced by two of NBN Co’s own Ka-band satellites, a $1 billion project scheduled for launch in 2015.

The final service will be capable of delivering peak speeds of 12Mbps to the three per cent of Australian premises not covered by either fibre-to-the-home or fixed wireless services under the NBN, though the wholesaler is yet to determine what average speeds users will be able to expect under the technology.

The interim service will be trialled with approximately 200 customers ahead of launch in July, and will be transitioned progressively to a further 300 users before October before fully offering the services to new applications. The wholesaler indicated those without alternate access to broadband services would be prioritised.

The inclusion of IPSTAR as a secondary contractor to the interim service was believed to have been made as a result of concerns Optus would be unable to fulfil the wholesaler’s requirements with its own range of satellites.

The latter telco foreshadowed the launch of the interim satellite service with the launch of its own premium 6Mbps offerings last year, though these were primarily targeted at small business and mining enterprises.

NBN Co revealed in a statement that it would look to build and upgrade ground station equipment in order to extend the reach of the 6Mbps services, using Gilat Very Small Aperture Terminal (VSAT) equipment as part of the value of the Optus contract.

Gilat revealed in a statement that it would provide 11 SkyEdge II hubs and 20,000 SkyEdge II VSATs to be deployed over three years. This could be expanded to 48,000 VSATs over the five-year contract with Gilat itself handling construction. Up to $120 million of the $200 million contract value with Optus would go towards expansion of the satellite network.

Follow James Hutchinson on Twitter: @j_hutch

Follow Computerworld Australia on Twitter: @ComputerworldAU

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