Networking

An Optus 5G installation on a power pole in Sydney.
Image: Chris Duckett/ZDNet
Telstra has taken out Opensignal’s first 5G user report in Australia, with the incumbent telco offering better speeds on 5G, although the perennial bridesmaid of Australian telcos was able to top it in coverage numbers.
Download speed purely on the competing 5G networks was blitzed by Telstra, which recorded 232Mbps compared to the 170Mbps on the Optus network.
Telstra’s lead was further backed up in the download experience test, which takes into account an operator’s 3G and LTE networks since 5G coverage is rather lacking at this point in time. In this test, Telstra recorded 52.5Mbps while Optus posted 46.7Mbps.
For the coverage numbers, Optus users had a 5G connection 8.6% of the time, edging out Telstra users on 8.2%. Opensignal said the results were statistically equivalent, but it had plaudits for the Singaporean-owned telco.
“This is an impressive achievement for Optus, given that its commercial 5G launch took place in early November 2019, roughly five and a half months after Telstra’s,” it said.
As Australian telcos continue to deploy 5G networks, Opensignal said it expects download numbers will become dominated by the speeds available on 5G networks, particularly with standalone 5G, which replaces the 4G core used on non-standalone 5G with a 5G core.
Telstra said in May its network was already able to support standalone 5G.
“The 5G experience in Australia is already many times faster than 4G, and we are only at the very beginning of a 5G era that will likely last a decade or more,” Opensignal said.
A global Opensignal report in July last year showed Australia was the only country where 4G speeds were better than the much-hyped speeds of 5G.
According to the report, Australia’s maximum 4G network speed was 950Mbps, while 5G topped out at 792Mbps.
Tests of Telstra’s 5G network conducted in June last year by ZDNet found the network rarely cracked the 300Mbps barrier.
In the period since, repeated 5G tests by ZDNet have failed to impress, but Opensignal said it has seen Telstra’s network improve from 157Mbps in May, to 232Mbps in this report.
“It should be noted that 5G availability is not the same as the percentage of Australia’s population or geography covered by 5G, given that initial 5G deployments tend to be focused in city centres and the COVID-19 pandemic is encouraging users to spend more time in residential areas,” the report said.
On Thursday, the Australian government announced that bidders in the upcoming 26Ghz spectrum auction would be limited to an allocation of 1GHz.
“I have directed the Australian Communications and Media Authority to set allocation limits of 1GHz,” Communications Minister Paul Fletcher said.
“Success in the mobile market ultimately depends on access to spectrum. Applying allocation limits means that the 26GHz spectrum cannot be monopolised by any one operator.”
The 26GHz band, from 25.1GHz to 27.5GHz, is set to be allocated by the ACMA in 29 areas across the country, while the 28GHz band, from 27.5GHz to 30GHz, will be restricted to apparatus licences. The former band will be allocated via an auction and administrative process, while the latter band will only be allocated by an administrative process.
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Image: Chris Duckett/ZDNet
Minister for Communications, Cyber Safety and the Arts Paul Fletcher announced on Thursday he has directed the Australian Communications and Media Authority (ACMA) to set limits on the upcoming millimetre wave auction due in March.
“I have directed the Australian Communications and Media Authority to set allocation limits of 1GHz,” Fletcher said.
“Success in the mobile market ultimately depends on access to spectrum. Applying allocation limits means that the 26GHz spectrum cannot be monopolised by any one operator.”
The 26GHz band, from 25.1GHz to 27.5GHz, is set to be allocated by the ACMA in 29 areas across the country, while the 28GHz band, from 27.5GHz to 30GHz, will be restricted to apparatus licences. The former band will be allocated via an auction and administrative process, while the latter band will only be allocated by an administrative process.
“The 26GHz band is the first high-band spectrum earmarked internationally for 5G deployment to be allocated in Australia,” the ACCC said in February when releasing a consultation paper.
“The propagation characteristics and large bandwidths of high-band spectrum, such as 26GHz and 28GHz, favour densely concentrated, small cell deployment models that support high-capacity broadband services. However, some network operators may adopt less dense deployment models with larger coverage areas per cell, especially for fixed broadband networks.”
Fletcher said the government has plans to introduce legislation into Parliament that will “modernise the spectrum management framework” and be more flexible.
In April, NBN said it had tested using millimetre wave spectrum with propagation distances of over 10 kilometres.
“Our studies, and those of our technology partners provide high levels of confidence that the long-range use would allow NBN to have significant flexibility to maximise our deployment and upgrade options,” NBN said.
“This long-range approach is enabled by our unique network topology with 100% external CPEs (consumer premises equipment), and largely line of sight deployment in regional and rural areas”
The current NBN fixed wireless network uses 4G LTE and has a propagation limit of 14 kilometres.
Telstra previously said it should get at least 1GHz of contiguous spectrum, equal to 42% of the spectrum available in the 26GHz band.
“A low (sub 1GHz) allocation limit which restricts operator optionality during the auction could therefore constrain or disincentivise future 5G deployment, investment and development,” Australia’s incumbent telco said. “A higher (at least 1GHz) limit reduces this risk.”
“At the same time, in the longer term, other mmWave bands may become available, expanding the range of potential 5G deployment options open to operators.”
Should the ACCC accept Telstra’s arguments, clearly, one of Australia’s three mobile network operators would be left with the rough end of the spectrum pineapple, potentially holding only 16% of the spectrum on offer.
Conversely, and much more mathematically equal, Optus put forward the idea of setting the allocation limit at 800MHz instead.
“An allocation limit of 800 MHz will allow networks to deliver peak speeds greater than 20Gbps, consistent with ITU 5G specifications; while ensuring the market would see at least three mmWave networks,” the Singaporean-owned telco said.
“Importantly, it would ensure that no single operator can be dominant in the deployment and establishment of 5G services in this band.”
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Since launching its new 100/20, 250/25, and 500-1,000/50Mbps speed tiers in May, in the intervening month, NBN retailers were able to get 45,000 customers onto the new plans, according to figures released by the Australian Competition and Consumer Commission (ACCC) on Thursday.
Over 38,000 premises took on the lowest tier of the new plans — 100/20Mbps, dubbed as Home Fast — which consisted of over 10,000 on HFC, over 9,400 premises having fibre to the premises (FttP), fibre to the curb (FttC) contributed over 8,330 premises, fibre to the node (FttN) accounted for 7,770 premises, and premises with fibre to the basement (FttB) made up just over 2,000.
For the higher pair of plans, only premises with FttP or HFC are eligible to make the switch. Home Superfast, which is 250/25Mbps, has just over 2,000 premises, with HFC making up 1,535 of that number. For the fastest plan, Home Ultrafast, that sees customers officially get a download speed between 500Mbps-1,000Mbps, FttP accounted for 4,427 premises with the added benefit of the technology being capable of 1Gbps. For HFC, where NBN has said the plan is only available on an initial 7% of its footprint, 220 hardy souls took the plunge.
The ACCC Wholesale Market Indicators Report said all but 400 of the Ultrafast customers were with Aussie Broadband, which jumped quickly onto offering the new plans.
“We think that the plan should achieve off-peak speeds of up to 80-90%, depending on the technology type,” Aussie Broadband managing director Phil Britt said in May.
The company also added 50 pure 1000/400Mbps plan customers in the quarter to June 30.
Over the period, the number of activated connections on the NBN increased by 5.4% to 7.4 million, and with purchased capacity lagging behind with a 3.5% increase to 18.4Tbps, the average capacity per user decreased 1.8% to 2.5Mbps.
In the previous quarter, the report CVC usage had jumped by 40% and average CVC per user had increased by 31%.
The CVC spike arrived after NBN offered a free 40% capacity boost for retailers to handle with pandemic-induced traffic increases.
See also: ACCC report and COVID-19 highlight how CVC is an artificial handbrake on the NBN
NBN has extended the CVC holiday until September 19, but it has warned that this will be the final extension.
The government-owned broadband wholesaler has faced criticism for wanting to return to regular pricing once the CVC holiday passed, with Britt saying in July that traffic patterns of Australians have changed.
“NBN’s extra 40% CVC bandwidth to cope with peak demand during COVID certainly cushioned the impact, but once it’s gone, we don’t believe traffic levels will return to original forecasts,” Britt said at the time. “Given that telcos pay overage for CVC usage above the amount bundled into their NBN wholesale products, this puts them in a difficult situation.
“They will either need to raise retail prices to keep the service levels the same in peak time speeds, or lower peak time speeds to maintain at least some level of margin — which is almost non-existent as is.”
Speaking on Thursday while handing down Telstra’s full-year results, CEO Andy Penn said the profitability of reselling NBN products was barely there.
“NBN wholesale pricing remains the largest negative impact on our fixed business,” Penn said.
“Without some sort of long-term change leading to improvement in RSP economics, the risk of retail price increases, reduced customer experience or customers moving onto other networks such as 5G will increase.
“In Telstra’s case, the profitability of reselling the NBN is negligible at best — that is not sustainable.”
Across the NBN for the quarter to June 30, an extra 80,000 25/5Mbps connections were activated, an extra 2,000 premises opted for 25/10Mbps, over 255,000 jumped onto a 50/20Mbps plan, and 43,500 opted for a 100/40Mbps plan.
79 premises dropped off 250/100Mbps plans, while 64 customers went for 500/200Mbps connections.
NBN reported its full-year earnings on Tuesday, with revenue growing by 36% to AU$3.8 billion and earnings before interest, tax, depreciation, and amortisation halving last year’s loss to be AU$648 million in the hole for the year to the end of June.
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Telstra CEO Andy Penn with a mmWave hotspot
Image: Telstra
It is unsurprising that Telstra has labelled 2020 a challenging year, in fact, to say 2020 is challenging might be one of history’s great understatements.
For Australia’s largest telco, 2020 saw reductions in revenue, earnings, and profit as well as a reduction in expenses to offset the declines somewhat. For the 2020 full year, Telstra reported a 6% drop in total revenue to AU$26 billion, operating expenses fell 14.5% to AU$17 billion to give earnings before interest, tax, depreciation and amortisation (EBITDA) of $8.9 billion, which represented an increase of 11.5% and a rare bright spot on Thursday’s earnings.
With increased depreciation and amortisation, the company went on to record a 14% drop in net profit to AU$1.8 billion.
The company also revealed in its results that its Belong brand has been driving many of its customer gains over the past year, which is likely to continue into the future with Telstra increasing the prices on its flagship plans at the end of June.
Across the year, Telstra added 240,000 postpaid mobile services, of which, 154,000 were on Belong, as well as 171,000 prepaid mobile services, 347,000 wholesale services, and 652,000 Internet of Things services.
“In FY20, we added 80,000 broadband subscribers, with Belong accounting for all the growth,” CFO Vicky Brady said.
Belong now has 400,000 mobile services and 330,000 fixed services around Australia. For its flagship brand, Telstra said it had decreased its number of consumer and small business plans from 1,800 to 20.
For its mobile segment, the company reported a 4.4% revenue decrease to AU$10 billion, with EBTIDA down 6.7% to AU$3.5 billion, and average revenue per user falling 8.2% to AU$50.29 each month. The company also experienced a AU$75 million drop in international roaming due to coronavirus travel restrictions.
It was a similar case of decreases in the fixed segment, with revenue dropping by 12% to AU$4.6 million and bundle and standalone data average revenue per user dropping 4.4% to AU$71.75 each month.
Data and IP recorded a 13% plunge in revenue to AU$2 billion, with EBITDA crashing 17.5% to AU$1.3 billion, while its network applications and services segment recorded an EBITDA increase of almost 65% to AU$593 million from revenue of AU$3.4 billion.
After it became a standalone business unit in the fiscal year, InfraCo saw 10.6% drop in revenue to AU$4.4 billion and an 11.7% drop in EBITDA to AU$2.8 billion.
Telstra also announced it was extending its job cuts pause until February next year for permanent staff.
“As we approach the end of that pause, it is clear that the impacts of COVID-19 will be with us for some time,” CEO Andy Penn said.
“We know many are doing it tough at the moment and we hope this decision will give some certainty to our people in what is a very challenging time for Australia — and many of the countries in which we operate.
“There will be some roles that finish in the interim where projects have come to an end or work is no longer required, volumes have declined, or fixed-term contracts end particularly related to our involvement in the construction of the NBN. However, for the majority of our teams this will continue to give them some certainty at least until the new year.”
Penn added the company would need to return to the cuts and make tough decisions next year to hit its T22 goals.
Telstra’s workforce is 5,700 employees smaller than it was two years ago, the company said, and its indirect workforce had 12,000 fewer jobs.
In March, the company needed to recruit 1,000 temporary call centre workers in Australia, after its overseas call centres were shut down due to coronavirus. This shifted the company’s thinking, Penn said, and the company will be pushing digital channels of interaction even more as it aims to reduce inbound call centre volumes by two-thirds as part of its T22 plans.
“This means that over time we will need a smaller call centre workforce for our consumer and small business customers and our aspiration is that by the end of our T22 program all inbound calls from these customers will be answered in Australia,” Penn said.
“Today we are already at more than 60%.”
The company has also set aside AU$50 million for penalties related to selling practices that took advantage of vulnerable people, especially Indigenous Australians, as well as cut the pay of some executives, including the CEO.
“We are also cooperating with an ACCC investigation into our sales, complaint handling, and debt collection practices to resolve their concerns about potential misleading or deceptive conduct, unconscionable conduct, or false or misleading representations at a small number of our partner stores — stores that are operated by licensees,” Penn said on the matter.
“The board has also reduced the variable remuneration outcome for certain executives by 10%, not because they did anything wrong, but because they were accountable for the areas of the business where these failures happened. This includes me because ultimately as the CEO there is not a part of the business for which I am not accountable.
Elsewhere in its results, Telstra said it was 75% through its NBN headwinds, with an AU$830 million hit to its earnings that are pinned on the existence of the government-owned broadband wholesaler for this year. That total is said to be AU$2.6 billion since the 2016 fiscal year.
“NBN wholesale pricing remains the largest negative impact on our fixed business,” Penn said.
“Without some sort of long-term change leading to improvement in RSP economics, the risk of retail price increases, reduced customer experience or customers moving onto other networks such as 5G will increase. In Telstra’s case, the profitability of reselling the NBN is negligible at best — that is not sustainable.”
Telstra also took a AU$308 million impairment on its Foxtel stake and said it had 10,000 people working in agile teams.
For the year ahead, Telstra is expecting total income to be between AU$23 billion to AU$25 billion, with underlying EBITDA to be between AU$6.5 billion to AU$7 billion. The company also expects to spend AU$200 million either side of AU$3 billion in capital expenditure, with NBN headwinds to account for a AU$700 million hit to earnings, and coronavirus impacts hitting it for another AU$400 million.
The telco wants to cut another AU$400 million in costs during fiscal year 2021.
Too much Telstra is never enough More

Cisco on Wednesday published its financial results for the fourth quarter and full fiscal year. By the end of fiscal 2020, Cisco said it achieved its goal of acquiring more than half of its revenue from software and services. Still, revenue was down year-over-over with the COVID-19 pandemic having its largest impact on Cisco’s enterprise and commercial orders.
“We are seeing customers continue to delay their purchasing decisions in certain areas while increasing spend in others until they have greater visibility and clarity on the timing and shape of the global economic recovery,” Chairman and CEO Chuck Robbins said on a Wednesday conference call. 
At the same time, he said, “the pandemic has also triggered a massive and rapid shift to remote operations and automation to maximize personal safety. With this, many customers are increasingly reliant on our broad portfolio of technologies, resulting in another quarter of strong demand for our Catalyst 9000, Security, WebEx and other SaaS-based solutions.”
Cisco’s fourth quarter non-GAAP net income came $3.4 billion, or 80 cents per share. Total revenue was $12.15 billion, a decrease of 9 percent year-over-year. 
Analysts were expecting earnings of 74 cents per share on revenue of $12.08 billion.
For the full 2020 fiscal year, Cisco’s non-GAAP EPS came to $3.21 on revenue of $49.3 billion, a decrease of 5 percent year-over-year.
Cisco’s focus on software and services “continues to resonate with customers as they digitize their organizations,” Robbins said in a statement. “Throughout fiscal 2020, Cisco has demonstrated operational resilience based on our strong customer relationships, solid financial foundation, and differentiated innovation. As we focus on the future, we are rebalancing our R&D investments to focus on new areas so we can continue to offer customers the best, most relevant technology in simpler, more easily consumable ways.”

Product revenue in Q4 was down 13 percent to $8.83 billion. Within this category, sales from infrastructure platforms was down 16 percent to $6.6 billion. Infrastructure platforms took the biggest hit from the pandemic, Cisco said, with declines across switching, routing, data center and wireless. There were pockets of strength with the continued growth of Cat 9K, which was up double digits. 
“Within our infrastructure platforms business, we continue to see a strong ramp of our Catalyst 9K portfolio as many customers take advantage of their employees working from home to refresh their aging infrastructure,” Robbins said. 
Application revenue was down 9 percent to $1.36 billion. On the positive side, Cisco saw a strong double-digit growth in WebEx, as well as solid growth in AppDynamics and IoT software. This was offset by declines in Unified Communication and TD endpoints. 
Sales of security products grew 10 percent to $814 million. “Other Products,” which brought in $35 million, declined by 17 percent. 
Service revenue was flat year-over-year at $3.32 billion. Cisco saw growth in its maintenance business, as well as software and support services. This was offset by the advisory services business, which was impacted by the COVID environment. 
As of Q4, software subscriptions make up 78 percent of Cisco’s software revenue, CFO Kelly Kramer noted. “Remaining performance obligations continued to grow strongly in the quarter, reflecting the strength of our portfolio of software and services,” Kramer said in a statement.
Revenue was down across all customer segments, as well as geographic segments. In terms of customer segments, Cisco saw enterprise revenue decline by 7 percent and public sector revenue decline by 1 percent. Commercial revenue fell 23 percent, while service provider sales were down 5 percent.

By region: In the Americas, sales declined by 12 percent, in EMEA by 6 percent, and in APJC revenue was down 7 percent. 
On Wednesday’s call, Robbins said Cisco will rebalance its R&D investments to focus on key areas, including: cloud security and cloud collaboration; key enhancements for education, health care and other industries; increased automation in the enterprise; the future of work; and application insights and analytics. 
At the same time, he said, Cisco will continue its focus in the following areas, many of which have been accelerated by the pandemic: multi-cloud investment, 5G and WiFi 6, 400-gig, optical networking, next-generation silicon and AI. 
“These investments will help define the next phase of our transformation and allow us to bring the best, most relevant innovation to our customers in simpler, more easily consumable ways,” Robbins said. 
For the first quarter, Cisco expects a non-GAAP EPS between 69 cents and 71 cents. It expects revenue to decline between 9 percent and 11 percent year-over-year.
Robbins also announced that Kramer will be stepping down from her role as CFO but will stay on until her successor is on board. 

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The former chief customer officer for business at NBN, Paul Tyler, will become CEO of Superloop from October 1.
Tyler was previously the group managing director of Telstra Business and was APAC president at Nokia before that. 
Current Superloop chief Drew Kelton will do a month of handover with Tyler in September, before becoming an executive director until March 2021 to focus on Superloop’s international business, and thereafter be a non-executive director.
Superloop founder and chair Beven Slattery said he was delighted to have Tyler take up the role.
“He is uniquely positioned to understand the challenges and opportunities that the National Broadband Network offers enterprises and service providers looking to leverage this once in a lifetime opportunity to transition away from traditional networks,” Slattery said.
In an update to the ASX last month, Superloop said it had full year revenue of AU$107 million, a decrease on last year’s AU$117 million, while recording earnings before interest, tax, depreciation, and amortisation of AU$13.5 million.
The company said it had seen fibre connectivity sales increase by 46% over the full year to June 30, from AU$11.2 million to AU$16.4 million.
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The coronavirus pandemic has changed everything. In business that has meant millions of us are now working from home. That, in turn, means we’re now using the internet more than ever. How much more? According to the Internet Society, starting in late February, in the United States we saw a “30% in upstream traffic, with downstream traffic increasing on the order of 20%.”

Ouch! That’s a lot more bytes. 
But, Thousand Eyes, a network monitoring company, found that despite this flood of traffic, Internet Service Providers (ISP)s, Content Delivery Networks (CDN)s, and public clouds have kept the bits moving smoothly on the internet superhighway.
Using its measurements of network performance metrics such as packet loss, latency, and jitter, ThousandEyes found that, despite a 63% rise in global internet disruptions from January to March 2020 with still 44% more failures in June compared to January, the internet is doing well. That’s because many of these disruptions in North America happened after traditional business hours so they didn’t meaningfully impact most working internet users. It was a different story in Europe where ISP failures often occurred during business hours. 
ThousandEyes stated:

Overall, the Internet held up. Despite unprecedented conditions and an increase in network disruptions, Internet-related infrastructures have held up well, suggesting overall healthy capacity, scalability, and operator agility needed to adjust to unforeseen demands. Negative performance indicators, such as traffic delay, loss, and jitter generally remained within tolerable ranges, showing no evidence of systemic network duress  . 

Most of the service troubles were caused not because of an overloaded internet, but because ISP operators were adjusting their networks to accommodate changes in traffic patterns and load. 
“Initially, we saw both businesses and service providers scramble to adjust, overnight, to work-from-home environments. However now, we see a definite shift towards accommodating a more permanent scenario of serving a remote workforce,” said Paul Bevan, Bloor Research’s research director of IT Infrastructure. “This is creating a realignment of network infrastructure that will look very different from pre-March network platforms.” 
Of course, it is. As Angelique Medina, ThousandEyes’ director of product marketing, observed, “With the overnight transition to a remote workforce, remote schooling, and remote entertainment that many countries experienced in March, we saw outages spike to unprecedented levels — especially among ISPs who seem to have been more vulnerable to disruptions than cloud providers.”

The company’s research found cloud provider networks were more stable than ISPs. That’s the good news. The bad news is that when the public cloud companies had outages they were more likely to impact users.
The key internet services companies, which are critical to internet performance — CDN and Domain Name System (DNS)  providers — held up well despite the increased and changing traffic conditions. Still, there have been real disruptions. In mid-July, Cloudflare, the major CDN and DNS service, had a major DNS failure. This led to tens of millions of users briefly finding their internet services failing.
So, for now, the internet is holding up under the load. As we close in on six months of working from home — with no end in sight — it’s good to know at least we can count on the internet. 
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Image: Equinix
Equinix announced on Tuesday morning it has paid $161 million to acquire GPX India and its two Tier 4 data centres in Mumbai.
The deal will see Equinix gain over 1,350 cabinets and 90,000 square feet of colocation space when fully built. GPX Mumbai 1 is a 30,000 square foot facility, while recently opened Mumbai 2 is expected to contribute the remaining 60,000 square feet.
GPX said its data centres host 12 telcos, over 130 ISPs, three internet exchanges, eight cloud service providers, as well as a number of content delivery networks and over-the-top content providers.
Equinix said the acquisition would close in the first quarter of 2021, while GPX said it expects the deal to close in the final quarter of 2020. Once Mumbai 2 is fully built out and utilised, Equinix expects the acquisition number to be 15 times the expected EBITDA of the facilities.
“After seven years of building our business in India, I could not think of any company better suited than Equinix to expand the platform GPX has created in India and help our customers continue to grow,” President and CEO of GPX Global Systems Nick Tanzi said.
“GPX Global Systems will now turn its attention to growing our business throughout Africa using our Egyptian business as the anchor for our expansion. We believe Africa represents a very similar opportunity which drove our investments in India.”
Last month, Equinix announced it completed the third expansion of its Hong Kong HK4 facility and had committed a further $51 million to spend on the facility.
With an additional 1,000 cabinets added, HK4 now has total capacity of 1,500 cabinets and will further add 3,000 cabinets in future phases. Equinix said it now provides total colocation space of about 34,500 square metres in Hong Kong.
In addition to five facilities in Hong Kong, Equinix has four data centres in Singapore, one in Seoul, 11 in Tokyo and another one in Osaka, as well as JK1 in Jakarta, and six in Shanghai.
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