[LINK] NBN and Austar

Tom Koltai tomk at unwired.com.au
Sat Feb 19 10:11:53 AEDT 2011

> -----Original Message-----
> From: link-bounces at mailman.anu.edu.au 
> [mailto:link-bounces at mailman.anu.edu.au] On Behalf Of 
> stephen at melbpc.org.au
> Sent: Friday, 18 February 2011 7:03 PM
> To: link at anu.edu.au
> Subject: [LINK] NBN and Austar
> Austar sells 2.3GHz & 3.4GHz spectrum to NBN Co for $120m 
> By Stuart Corner, 17 Feb 2011 <http://www.itwire.com/it-industry-
> news/deals/45223-austar-sells-23ghz-a-34ghz-spectrum-to-nbn-co
> -for-120m>
> Austar United Communications has sold its 2.3GHz and 3.4GHz 
> spectrum to 
> NBN Co for $120m to enable NBN Co to provide 12Mbps broadband 
> to areas 
> beyond the economic reach of fibre to the home.
> According to its submission to the 2009 Senate NBN enquiry, 
> Austar spent 
> $183 million in 2000 to obtain spectrum licenses .. and has sold some 
> spectrum to Energy Australia for smart grid applications.

So allowing for interest on the 183 million, Austars unused spectrum
cost the Austar shareholders over the last ten years a piddling 
$327,725,128 in opportunity cost. (6% bank interest P.A.)

On that basis the NBN guys negotiated a bargain.
What? Only Five years left on the Spectrum ?


Opportunity cost on the Austar Spectrum for 15 years = $413,745,424
Annual Value of Spectrum (flat today dollars) therefore =  $27,583,028

Value of Spectrum left to run = $110,332,113 

How did someone say it earlier today? Ooops ?  

[An N.B. to the NBN negotiation Team... NBN guys, could you please stop
leaving 10 million dollar chunks on the table...]

> In his presentation to Austar's half year results, Austar CEO John 
> Porter, said: "The [NBN] Implementation Study made clear that 
> the 2.3GHz 
> spectrum was the most logical spectrum choice for the '10 
> percent' areas, 
> particularly given speed to market issues."

Hardly, but it's probably the only spectrum that is available in
non-city areas... That isnt owned by a competitor.

> The implementation study said that, even with the use of fixed, 
> professionally installed antennas, premises would need to be 
> within 7kms 
> of a base station using WiMAX or LTE in the 2.3GHz band. 

Really ? At 2.3GHz, My understanding is that with WiMax, 30 Kms is
easily achieved unless everyone insists on LTE in which case, yep, it's
only 7 kms.

> Using the digital dividend spectrum this distance would 
> increase to 14kms.

Bonding UHF/VHF spectrum to 2.3 GHz... Cough Cough... - Any VK's want to
jump in here?

> Austar also intends to retail NBN wireless services provided on its 
> spectrum. "By retailing NBN Co services, Austar will be able to offer 
> consumers a broader range of products than we would have by 
> building our own network," Porter said.


John's predecessor had a business plan on his desk in 1996 on how to
roll out wireless Broadband to his country areas.
Unfortunately UIH had internal issues and failed to proceed with the
initiative. (Which is why I was surprised when Austar purchased the

Whatever happened to to that David (H...) Chappie... Oh, he's over at
the competition in Perth...
The Guys that have all that 3.x spectrum Australia wide...

I can see another spectrum purchase...

No, wait, it's a whole company with a viable wireless NBN...

Will 43 billion be enough to convince Uncle Kerry to NOT build-out his
vivid home-entertainment-dream ?

> Deanne Weir, Austar's group director corporate development said that 
> Austar would now concentrate on developing its content 
> delivery platform 
> beyond its current satellite delivered customer base of 30 percent of 
> regional homes.
> "Austar will focus not only on launching enhanced content 
> services and 
> transactional video offerings for our satellite customers, 
> but we will 
> also look to create relationships with regional Australian 
> homes that we 
> don't currently service, via high-speed broadband and VoIP 
> offerings," 
> Weir said. 
> --
> Cheers,
> Stephen

This is a Fluff piece. A reasonably innacurate piece of self serving PR
which only manages to push up the price of the competition... 

Meanwhile, in the Blue camp, Malcolm is rubbing his hands with Glee...
"Gee, a new option... A ripe lucsious red strawberry"

(Paraphrasing Last Paragraph of GARP.)

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